PEABODY — Associated Industries of Massachusetts President and CEO Richard Lord talked transportation, trade and other issues with North Shore business leaders Wednesday, giving them a sense of how the Trump administration might impact the roaring Bay State economy.

“It seems clear to me the next four years will bring inevitable change to a thriving Massachusetts economy that sometimes seems worlds away from the middle-class disaffection that led to his election,” Lord said.

Lord spoke about the state of Massachusetts businesses at a North Shore Chamber of Commerce breakfast before 180 people at the Boston Marriott Peabody. His talk came the morning after Trump’s first address before a joint session of Congress.

“True to his campaign promises, the iconoclastic President Trump lost no time in shaking official Washington to its core,” said Lord, who has led overseen the statewide employer advocacy group since 1999.

While businesses are dealing with a persistent shortage of skilled labor and affordable housing, the state is the envy of others. Lord noted that on Tuesday, U.S. News and World Report ranked the Bay State No. 1 in the nation, ranking the state No. 1 in education and No. 2 in health care.

“One of the questions we face this morning is whether the tidal wave of change promised by the Trump administration will help or harm employers here in Massachusetts,” Lord said.

Many unknowns

There are a lot of unknowns due to the unconventional nature of the Trump administration, Lord said. But Democrats and Republicans could join forces on infrastructure.

“Federal support would be a big plus for (the) Massachusetts transportation system where 5 million vehicles travel 150 million miles each day, and commuters take more than 1.3 million daily trips on an aging state public transit system,” he said.

The future of trade was also uncertain. Trump had campaigned on an anti-trade platform that targeted China and Mexico, the North American Free Trade Agreement, and the Trans-Pacific Partnership, the latter of which Trump withdrew the United States from in one of his first executive orders, Lord said. Washington is buzzing about 35-percent import tariffs and “so-called border adjustments,” Lord said.

“I would say to you, trade is like oxygen to the Massachusetts economy. Bay State companies export more than $25 billion worth of goods, and probably at least that much in services each year,” Lord said. About 9,700 small- and medium-sized Bay State companies support 112,000 jobs with export sales, he said, and 7 percent of Massachusetts residents work for a foreign-owned employer.

“As one expert recently noted, President Trump is perhaps less anti-trade, and more ‘pro-good trade deals.’ We certainly hope so,” Lord said, “because trade wars would cause broad collateral damage here in Massachusetts.”

Trump is also proposing to lower the corporate income tax rate from 35 percent to 15 percent, while eliminating deductions and simplifying the tax code. Lord said this would benefit businesses here, but it could also increase federal deficits.

Challenges within Massachusetts

In Massachusetts, the economy is thriving. The unemployment rate stood at 2.8 percent in December; the last time it was that low was December 2000, according to the state Executive Office of Labor and Workforce Development. The state’s economic output grew 27 percent faster than that of the nation as a whole.

However, Lord cautioned the perils Massachusetts employers face may not come from the Trump administration.

“It may come from within Massachusetts itself as well-meaning advocates take conservative federal government as their cue, to make the commonwealth an example of big government and higher taxes, inefficient regulation and fiscal instability,” he said.

The state has already gone its own way on mandatory paid sick leave, greenhouse gas regulations, and minimum wage rates. Lord said he expects advocacy during this legislative session on a $15 an hour minimum wage, paid family and medical leave, and a proposed ballot question for a surtax on incomes above $1 million “that would gut small business here in the commonwealth.”

He suggested employers project a positive agenda, based on improving the state’s education system, modernizing transportation infrastructure, reforming the regulatory system, and curbing health and energy costs. 

Bill Tinti, a Salem attorney and the past chairman of the North Shore Chamber, warned about the “fair share assessment,” a Baker administration proposal which he said could hit employers with more than 10 workers with a $2,000-per-employee tax for those that cannot fit a narrow definition of health care benefits they provide.

The proposal comes amid expected deep cuts to Medicaid funding with the pending repeal of Obamacare. Tinti urged business leaders to call the governor’s office.

“AIM opposes it also,” said Lord of the fair share assessment. He said his group has had two meetings with the Baker administration to find a solution to health care funding that would not penalize employers.

Staff writer Ethan Forman can be reached at 978-338-2673, by email at eforman@salemnews.com or on Twitter at @DanverSalemNews.