As the Trump administration prepares to take office, businesses must brace for significant changes across various sectors. The new administration’s policies are expected to impact multiple areas including trade, tax, dealmaking, healthcare, and technology, necessitating strategic adjustments to navigate the evolving landscape. This article delves into some of the key areas of concern and provides insights for general counsels to prepare their organizations for the upcoming changes.
Trade & Tariffs
The Trump administration’s “America first” approach to international trade is expected to continue, marked by unilateral actions, aggressive negotiation tactics, and a focus on reducing the trade deficit and protecting US industries. Trump has proposed tariffs of between 10% and 20% on all US imports, with a 60% tariff on imports from China. Businesses will need to reexamine their internationally supply chains and prepare for potential disruptions due to geopolitical conflicts and trade restrictions
Tax Policy
A cornerstone of Trump’s second term will be to make permanent many of the provisions of the 2017 Tax Cuts and Jobs Act that expire at the end of 2025. Trump has campaigned on further reducing the base corporate rate to 20% and an additional cut to 15% for companies that produce goods in the US. However, these proposals could lead to increased protectionist measures and potential tax and trade conflicts with other countries
Dealmaking & Antitrust
The Trump administration is expected to create a more merger-friendly regulatory environment, potentially leading to a surge in M&A activity. New leaders for the Department of Justice’s Antitrust Division and the Federal Trade Commission are expected to pursue a more “business-friendly” approach. However, antitrust scrutiny, particularly for Big Tech and large deals, will likely continue, albeit less aggressively than under the Biden administration
Healthcare & Life Sciences
Trump’s victory means that tech companies can anticipate fewer rules and regulations, with a focus on deregulation and promoting innovation. The administration is expected to implement favorable tax rates for corporations, including those in the life sciences sector, to encourage investment and growth. However, the nomination of Robert F. Kennedy Jr. as Secretary of Health and Human Services could lead to significant reforms in federal health agencies and regulatory changes that companies will need to navigate
Technology
The technology sector is not insulated from the inflationary effects of Trump’s proposals on tariffs, deportation, and tax cuts. Antitrust lawsuits targeting Big Tech companies are expected to continue, but with changes in leadership at key agencies, the overall scrutiny may be less aggressive. Trump’s support for the cryptocurrency industry and his pro-innovation stance could lead to reduced regulatory scrutiny and increased investment in the sector
Conclusion
The new Trump administration’s policies will have far-reaching implications for businesses across various sectors. It is essential for organizations to be proactive in preparing for the anticipated changes. By understanding the key areas of impact and developing strategic responses, businesses can navigate the evolving regulatory landscape and seize opportunities for growth and innovation.
In our recent Ahead of Tax and Legal event, that took place on 7 November, Michiel Vos, a renowned journalist and political commentator, reflected together with Baker & McKenzie and our clients on the impact of the Trump administration for businesses. For those interested in delving deeper into this topic, Baker is hosting an exclusive round table on Wednesday, 15 January, featuring Rod Hunter from the US, a former senior official at the National Security Council and an expert in international trade and investment policy, as a guest speaker. There is a limited number of spots available for this event, and those interested in joining can reach out to sanne.klabou@bakermckenzie.com.
