[Business & Issues] Billionaires Riding the 'Trump Rally' Wave

Tesla, Nvidia, Oracle CEOs' Wealth Surges
Benefiting from Corporate Tax Cuts, China Tariffs, and Regulatory Easing

On the 5th of last month, at a presidential campaign rally held in Butler, Pennsylvania, USA, President-elect Donald Trump (right) is encouraging Elon Musk, CEO of Tesla, who appeared as a fellow speaker. Photo by AP Yonhap News

The heads of major U.S. big tech companies have seen their assets rapidly increase as their stock prices surged due to the so-called 'Trump rally' around the presidential election. This is attributed to growing expectations of policy benefits for big tech firms such as Tesla, led by Elon Musk who is slated to join Donald Trump's second-term administration, as well as Nvidia, Oracle, Meta, and Amazon. If Trump's promised deregulation, tax cuts, and extended tariffs on China are implemented, U.S. big tech companies are expected to have more capacity to increase research and development (R&D) spending and fend off competition from Chinese firms.

Musk, Jensen Huang, Ellison, and Other U.S. Big Tech Billionaires See Rapid Wealth Growth

On the 21st (local time), Bloomberg reported the ranking of global billionaires by asset growth since the beginning of the year, with Elon Musk, CEO of Tesla, taking first place. Musk's assets increased by $102 billion (approximately 142.88 trillion KRW) since the start of the year. Second place went to Jensen Huang, CEO of Nvidia ($84.3 billion), third to Larry Ellison, Chairman of Oracle ($79.8 billion), fourth to Mark Zuckerberg, CEO of Meta ($70.7 billion), and fifth to Jeff Bezos, Chairman of Amazon ($48.7 billion).

Bernard Arnault, Chairman of LVMH Group, who was ranked first in total billionaire assets earlier this year, saw his assets decrease by $42.9 billion, making him the billionaire with the largest asset decline this year. His total assets fell to $165 billion, dropping to fifth place globally behind Musk ($331 billion), Bezos ($226 billion), Ellison ($203 billion), and Zuckerberg ($199 billion).

The rapid increase in assets of U.S. big tech leaders is due to expectations of policy benefits focused on big tech following the presidential election. The Trump administration, which has emphasized traditional America-first and isolationist policies, is expected to introduce many business-friendly policies centered on big tech companies.

Three Major Policy Benefits of Trump's Second Term: Deregulation, Tax Cuts, and Tariffs on China

Reuters Yonhap News

▲ Deregulation, ▲ tax cuts, and ▲ tariffs on China are considered the three main policy benefits that U.S. big tech companies can expect under the second Trump administration. In particular, expectations for deregulation have grown significantly as CEO Musk has been appointed co-head of the Office of Management and Budget in the second Trump administration.

In an op-ed published in the Wall Street Journal (WSJ) with Vivek Ramaswamy, who was also appointed co-head of the Office of Management and Budget, Musk stated, "We will undertake three major reforms: deregulation, downsizing the administration, and cutting wasteful spending," adding, "We will form a rapid improvement team to identify necessary government efficiency measures and nullify regulations created by various departments through executive orders, guidelines, and legal interpretations." He further emphasized, "We will reduce the number of government employees according to the regulations to be abolished by each agency, ban remote work, and cut the $2 trillion (approximately 2800 trillion KRW) in wasteful spending."

If Trump's promised tax cuts are realized, it is expected to help strengthen the competitiveness of U.S. companies. Trump pledged during the last election to reduce the corporate tax rate for domestic manufacturers from the current 21% to 15%. Previously, during his first term in 2017, he lowered the corporate tax rate from 35% to the current 21%. This is a significant boon for big tech companies, which spend massive amounts on AI development and other R&D. Goldman Sachs recently reported that "further corporate tax cuts could increase the earnings per share (EPS) growth forecast for S&P 500 companies by more than 4 percentage points."

The tariff policy on China could also benefit U.S. electric vehicle manufacturers and e-commerce platforms struggling against low-priced Chinese brands. Trump has pledged to impose tariffs of 60% or more on all Chinese products and to revoke most-favored-nation status. Additionally, high tariffs will be imposed on Chinese products entering through neighboring Latin American countries like Mexico, and the exemption limits for small-value imports from Chinese low-cost e-commerce companies such as Temu, Shein, and Alibaba will be abolished to prevent indiscriminate inflow of Chinese goods.

Risks of Trump's Policies Persist: Immigration Deportations and Fed Interest Rate Policy Frictions

Reuters Yonhap News

However, concerns remain that the policy risks of the second Trump administration may be as significant as the benefits. If issues such as rising labor costs and inflation due to immigration deportation policies and friction with the Federal Reserve (Fed) over interest rate policies intensify, it could deal a considerable blow to the U.S. economy.

Trump made it clear shortly after taking office that he would carry out large-scale deportations of illegal immigrants. Recently, he appointed Tom Homan, who served as acting director of Immigration and Customs Enforcement (ICE) during the first administration, as the head of immigration policy, signaling preparations for deportation policies. It is feared that over one million immigrants could be deported annually during the second term.

If immigrants are deported en masse, economies in places like California and Texas, where immigrants make up more than 10% of the local workforce, will suffer significant damage. According to MarketWatch, the Penn Wharton Budget Model (PWBM), a bipartisan research group at the University of Pennsylvania's Wharton School, estimates that if mass deportation policies are implemented, labor shortages and a decrease in taxpayers over the next 10 years could result in losses and costs exceeding $1 trillion.

Friction between Trump and the Fed also poses a risk of significantly disrupting U.S. economic policy. During his campaign, Trump repeatedly made controversial remarks infringing on the Fed's independence. In August, he stated, "The president should have a say in the Fed," and "In many cases, I believe I have better instincts than the Fed chair," expressing his intention to intervene in interest rate policy.

Paul Krugman, Professor Emeritus at Princeton University, warned in a column published in the New York Times (NYT), "The reason central banks must be independent is that people do not want a Venezuela scenario," adding, "Venezuela relied on printing money to pay debts due to irresponsible government policies, which led to hyperinflation."