As a new House of Representatives, Senate, and White House begin their work in January of 2025 – all controlled by Republicans – corporate America will be watching how the new policy ecosystem will prioritize issues, introduce new policy risk, advance business priorities, and unwind existing policies. It will most likely be mixed results for businesses, but the first 100 days will provide an important look into how the policy landscape is likely to change in both the near-term and long-term. Here are some key issues businesses will be watching:
Uncertainty: Businesses rely on certainty and as a dynamically different Washington, DC emerges in 2025, uncertainty is likely (at least in the near-term). Business leaders will be looking for more certainty and a clear path forward; something that may or may not happen. As disruption and change are likely to be core themes of the new Administration, certainty may be hard to find for a while.
Tax Policy: President-elect Trump and the Republican Congress will prioritize extending expiring provisions from the 2017 Tax Cuts and Jobs Act (TCJA). Since they have the ability to leverage budget reconciliation and avoid needing to compromise with Democrats, it is very possible that they decide to expand beyond TCJA and approach tax policy more broadly. President-elect Trump has highlighted trillions of dollars of new proposals he would like to advance; while policymakers have highlighted their own priorities. Of course, with tax policy comes the need for offsets, which often means putting other existing tax policies at-risk.
Tariffs: Potentially one of the largest areas of concern among businesses is around tariffs and the potential for additional tariffs (as high as 60%) on imports. There is already significant fatigue in DC around Section 301 tariffs implemented (and still in place) during the first Trump Administration. Additional tariffs will be a risk to businesses reliant on foreign manufacturing or supply chains overseas. Since the White House does not need Congress to advance tariffs, businesses will have less influence over the tariff process than they would other matters, especially legislation.
Broader Trade Policy: There has not been a lot of trade policy beyond the tariffs on imports from China and export controls implemented over the last few years. Businesses are looking for potential relief through restarting the Generalized System of Preferences (which expired at the end of 2020) and reforming the De Minimis threshold (currently set at $800). These policies would dramatically help businesses that have faced unexpected tariffs since GSP’s expiration and being undermined by direct-to-consumer duty-free imports largely from China.
De-Regulation: President-elect Trump has highlighted his interest in reducing regulations, especially those he is still able to reach that have been proposed or advanced by the Biden Administration. High profile regulations, like the SEC climate disclosure regulations, will be towards the top of the list for stopping, where possible. Congress will be helpful in finding ways to leverage the Congressional Review Act for those regulations that were implemented late enough in the Biden Administration to be reversed by Congress. During his first term, the President-elect issued an Executive Order calling for agencies to identify two regulations for elimination when proposing a new regulation. Additionally, businesses will watch how new agency leadership prioritizes or deprioritizes regulatory enforcement.
Organized Labor: President-elect Trump and Vice President-elect Vance prioritized outreach to unions, even providing the president of the Teamsters with a primetime speaking position at the convention. It will be interesting to see how much the new Administration focuses on policies around labor or if they will reach out to that constituency by promoting tariffs and domestic manufacturing.
Healthcare: While not a significant issue on the campaign trail, President-elect Trump did mention he was in the early stages of a plan to adjust the existing healthcare laws. Adjusting healthcare is no small task and most businesses made large investments to adjust to the Affordable Care Act, which was signed into law under former President Obama. A whole new healthcare law could be really disruptive to businesses – even those who were not excited about the ACA when it was passed, but are now operating under it.
There will be a lot to watch in the coming two years and the businesses will have a front row view into where the more traditionally Republican pro-business policies emerge and where the new Republican populist agenda may take shape.
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