Is President Trump on Track to End the EPA?
EPA and the chemical industry
In the US, the EPA (U.S. Environmental Protection Agency) monitors issues related to the environment by making laws and imposing fines, sanctions, and other measures. During his election campaign, President Trump expressed that he would abolish the EPA. He thinks that the EPA hampers business by regularly issuing new laws. It’s also thought that President Trump wants to abolish the EPA in order to revive the coal industry.
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Generally, most chemical companies like Dow Chemical (DOW), DuPont (DD), and LyondellBasell (LYB) set aside a certain amount of money as a reserve for future contingency that could arise from environmental issues. Abolishing the EPA could mean that chemical companies aren’t monitored, which could be a disaster for the environment.
Latest stand on the EPA
The appointment of Scott Pruitt as the head of the EPA is one step that many people think President Trump has taken to abolish or weaken the EPA. Pruitt is the former attorney general of Oklahoma. He sued the EPA 13 times during his tenure. The Trump Administration plans to reduce the EPA’s budget allocation 31% and eliminate one-quarter of the EPA’s 15,000 jobs. However, even Republicans don’t support his view.
Investors can get exposure to chemical companies indirectly by investing in the iShares U.S. Basic Materials ETF (IYM). The fund’s top holdings include Monsanto (MON) and Praxair (PX) with weights of 8.6% and 6.30%, respectively, as of May 17, 2017.