01 JAN 2025 / ECONOMY

How Trumponomics 2.0 Will Shift Taxes, Trade, and Technology in 2025

Donald Trump is back in the driver’s seat, and his 2025 presidency is already revving up some big shifts for the economy, taxes, and trade. From a booming AI market to potential tariff troubles, Trumponomics 2.0 is setting the stage for what could be a high-stakes showdown, for accounting and tax professionals to roll up their sleeves and prepare for some serious action.

AI is Crushing It, but Tariffs Might Throw Shade

If there’s one thing Wall Street is hyped about, it’s the AI rally. Tech is on fire, and Goldman Sachs says 2025 is just the beginning of this market boom. Employment is holding steady, inflation’s cooling off, and consumers are spending like it’s their job. Life’s looking sweet, right?

Not so fast. Trump’s got tariffs on the brain—big ones. He’s talking about 10% to 20% charges on imports from friends like Canada and Europe and a hefty 100% tariff on BRIC countries (Brazil, Russia, India, and China) if they ditch the dollar for trade. Goldman Sachs’ Ronnie Walker notes that 70% of these price hikes will be passed on to consumers, with inflation potentially hitting 2.7% by late 2025. Walker warns that universal tariffs could delay the Fed’s return to its 2% inflation target, pushing inflation as high as 3%.

A Mixed Bag for Professionals

Remember Trump’s 2017 tax cuts? They’re set to expire in 2025, and his administration is already talking about a sequel. Proposed measures include slashing corporate tax rates to boost domestic growth. However, Jamie Dimon of JPMorgan points out that while these policies might stabilize government revenues, they could add layers of complexity for professionals and businesses alike. The American Institute of CPAs (AICPA) has expressed concerns about PCAOB’s New Audit Metrics, stating, “Simplification is welcome, but compliance will burden smaller firms.”

For Tax Professionals, Here’s the Deal:

More Audits, More Paperwork: Expect clients to seek help navigating the renewed focus on compliance.
Tech Is Your Best Friend: If the IRS is going high-tech, you’ll need automation and analytics tools to keep up.
Get Ready for Busy Season: With expiring tax cuts and new reforms, 2025 is shaping up to be a marathon year.

Bitcoin, Crypto, and the Wild West of Regulation

Crypto fans, hold onto your hats. Trump’s administration is hinting at tighter regulation for digital currencies, citing concerns about tax evasion and financial stability. Bitcoin’s volatility might get tamed, but it’s causing waves in the accounting world. Goldman Sachs highlights crypto compliance as a top concern, with new IRS rules requiring detailed disclosures for cryptocurrency transactions. “Regulations are overdue, but compliance challenges are immense for businesses,” the firm noted.

What This Means for You:

Brush Up on Blockchain: Clients dealing in crypto will need clear guidance on tax reporting and valuation methods.
Stay Ahead of the Curve: With evolving regulations, knowledge is power. Keep tabs on IRS updates and industry trends.

It’s About to Get Real

You know that saying, “Don’t poke the bear”? Well, Trump’s tariffs on BRIC countries could be like poking a whole pack of grizzlies. If these nations move away from the U.S. dollar, it could shake up the global economy big time. Goldman Sachs believes these tariffs will disrupt global trade but stops short of assuming a full 100% implementation, calling it a “serious risk but not the baseline.” Meanwhile, Jamie Dimon warns that such measures could “turn clear skies foggy” by reigniting inflationary pressures and slowing global trade.

For Accountants and Advisors:

Currency Chaos: Fluctuating exchange rates will complicate financial reporting and tax planning.
Trade Troubles: Clients with international operations will rely on you to rethink supply chains and pricing strategies.

This isn’t just a trade spat; it’s a potential shift in how the world does business. And guess who’s in the hot seat to guide companies through it? Yep, you.

Stay Sharp, Stay Ready

Trumponomics 2.0 is like a double shot of espresso—exciting, but it might leave you a little jittery. Between AI innovation, tariff shake-ups, IRS reforms, and crypto regulations, accounting and tax professionals have their work cut out for them. As they say, “When the going gets tough, the tough get going.” So, dust off your calculator, fire up your analytics software, and prepare to make 2025 your best year. Subscribe to MYCPE ONE Insights for the latest in finance, accounting, and corporate news delivered straight to your inbox.