With a new administration in office, businesses across industries are bracing for shifts in economic policy, regulation, and enforcement. While it’s still early, a number of executive orders and policy proposals are already shaping expectations – and impacting how the stock market is performing. Here’s what companies should keep in mind as the policy landscape evolves.
Executive Orders: Volume, Scope, and Impacts
Historically, executive orders (EOs) have played a powerful role in shaping federal policy, and the current administration is no exception. Within the first 10 days in office, President Donald Trump signed more EOs than any recent president has in their first 100 days. These orders span a wide range of topics—from energy development to diversity initiatives—and signal a rapid pace of change.
For context, the use of executive orders has evolved significantly since the federal government began formally numbering them in 1907. EOs have shaped everything from wartime policy to civil rights to the operations of federal agencies. Franklin D. Roosevelt issued over 3,700 during his presidency, using EOs to implement sweeping programs like the New Deal. In 1948, President Truman used an executive order to desegregate the U.S. military (EO 9981). More recently, President Obama used them to raise the minimum wage for federal contractors (EO 13658), while President Trump issued over 200 executive orders, many of which directly impacted immigration, environmental regulation, and federal procurement processes. Today, they’re a key lever that presidents use to set administrative priorities quickly and bypass legislative gridlock. For business owners, understanding the implications of these orders is essential—especially when they intersect with compliance requirements, labor policies, environmental standards, or how government contracts are awarded and executed.
Trade and Tariffs: A Reversion to Protectionism
It can be overwhelming to keep up with the back-and-forth with U.S. trade policy. The decision to reinstate tariffs of 25% on steel and 10% on aluminum from key trade partners such as Mexico and Canada, in addition to escalating tariffs on Chinese goods, was initially motivated by the objective of bolstering domestic manufacturing and protecting American jobs. The underlying belief being that by making foreign imports more expensive, domestic producers would be shielded from unfair competition and incentivized to expand production, leading to increased employment and economic growth.
However, protectionist policies have historically borne unintended consequences and associated costs. While some domestic industries may have benefited from the reduced competition, the tariffs have also triggered retaliatory measures from affected trade partners, leading to a tit-for-tat escalation of trade barriers. This has resulted in decreased exports for American businesses, particularly those in the agriculture and manufacturing sectors, who rely on foreign markets for their products. Moreover, the increased cost of imported steel and aluminum has negatively impacted downstream industries, such as construction and automobile manufacturing, who rely on these materials as inputs. This has led to higher prices for consumers and reduced competitiveness for American businesses in the global marketplace.
Historically, tariffs have disrupted established supply chains and created uncertainty for businesses, who are now forced to navigate a more complex and unpredictable trade environment. This has led to delays, disruptions, and increased costs for businesses, who are now struggling to source the materials and components they need at competitive prices. The tariffs have also strained diplomatic relations with key trade partners, undermining trust and cooperation in other areas of mutual interest.
What this means for businesses:
- Increased Costs: Tariffs function as taxes on imported goods, which U.S. companies ultimately pay. Many businesses pass these costs to consumers, which may lead to price increases.
- Supply Chain Disruptions: Tariffs can destabilize longstanding supply relationships, leading to inventory shortages, delays, or the need to find new suppliers.
- Profitability Pressure: Small businesses often feel the squeeze the most, as they have less pricing power and fewer resources to absorb increased costs.
Mitigation strategies include transparent communication with customers, reevaluating suppliers (especially domestic ones), and streamlining operations to cut costs elsewhere.
Workforce and WARN Act Considerations
The economic ripple effects of tariffs and regulation changes may push some companies to restructure or downsize. In these cases, employers should be aware of the federal WARN Act, which requires businesses with 100 or more full-time workers to provide advance notice of large-scale layoffs.
Companies should also be prepared to:
- Ensure employee handbooks and non-disclosure policies are up to date
- Identify whether workers are employed at-will
- Consult legal counsel before any reduction in force.
Energy and Environment: Accelerated Fossil Fuel Projects, Stalled Renewables
The administration has prioritized energy development, particularly fossil fuels. Executive orders aim to streamline permitting for oil and gas infrastructure while pausing wind energy projects on federal lands. These changes may benefit construction and traditional energy companies through faster approvals, but may also increase litigation risk from environmental groups.
The administration has also withdrawn the U.S. from the Paris Climate Agreement, signaling a shift away from global environmental commitments.
Businesses with international ties may face hurdles if foreign partners adhere to stricter environmental standards. Companies involved in renewable energy may face uncertainty, while those in traditional energy may see near-term benefits—with potential long-term backlash.The current administration has clearly prioritized the development of energy resources, with a particular emphasis on fossil fuels. The EOs that have been issued aim to streamline the permitting process for oil and gas infrastructure while simultaneously pausing wind energy projects on federal lands. These policy changes are likely to have a significant impact on the energy industry, with both benefits and risks for businesses.
Construction and traditional energy companies may see significant benefits from these changes. The faster approval processes for fossil fuel infrastructure could lead to increased investment and growth in these sectors. This could result in job creation and economic benefits for communities that are involved in the fossil fuel industry.
However, the administration’s focus on fossil fuels could also increase the risk of litigation from environmental groups. These groups may challenge the legality of the administration’s policies in court, which could lead to delays and uncertainty for businesses. Additionally, the environmental impacts of increased fossil fuel development could lead to public backlash and reputational damage for companies that are involved in these projects.
The administration’s decision to withdraw the United States from the Paris Climate Agreement is another significant policy shift that could have far-reaching implications for businesses. This decision signals a move away from global environmental commitments and could create challenges for businesses with international ties.
If foreign partners adhere to stricter environmental standards than the United States, businesses may face hurdles in maintaining those relationships. They may need to adapt their operations to comply with different regulations or risk losing business opportunities.
Companies involved in renewable energy may face particular uncertainty in the current policy environment. The administration’s focus on fossil fuels and the withdrawal from the Paris Climate Agreement could create a less favorable environment for investment and growth in renewable energy. This could lead to job losses and economic challenges in communities that are involved in the renewable energy sector.
The Trump Administration’s energy policies have created a complex and dynamic landscape for businesses. While there are potential benefits for some sectors, there are also significant risks and uncertainties. Companies will need to carefully navigate this environment and adapt their strategies to succeed in the long term.
Social Policies and DEI
One executive order titled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” has directed agencies to dismantle federal DEI programs and scrutinize private-sector DEI practices.This could potentially lead to significant changes in how companies approach diversity and inclusion efforts, and may spark debate about the role of government in regulating such initiatives.
Companies contracting with the government may be required to certify that their internal policies do not offer preferential treatment based on race or gender.
What this means for business leaders with federal contracts:
- Review all DEI-related initiatives, especially those involving hiring goals or contract set-asides
- Evaluate whether internal targets could be interpreted as “preferential treatment”
- Anticipate potential legal scrutiny or legal action if programs are not adjusted
Tax and Financial Policy: Uncertainty with Room to Plan
While no major tax legislation has been enacted yet, proposals are on the horizon. A key focus will be on provisions from the 2017 Tax Cuts and Jobs Act (TCJA), many of which are set to expire. There’s currently a lot of discussion around the funding for potential tax cuts, with tariffs being suggested as a possible revenue stream.
While the future is uncertain, analysts predict the following:
- A budget resolution should be expected by mid-year, with tax legislation likely to follow soon after.
- Extending the provisions of the Tax Cuts and Jobs Act (TCJA) could potentially add a substantial amount, around $4 trillion, to the deficit over a 10-year period.
- The U.S. response to global tax agreements, such as the OECD’s Pillar Two, is still unclear.
At the same time, there are potential changes in financial regulation that could lead to a reduction in bureaucracy for both banks and fintech firms. New leadership at federal agencies may reverse some recent rulemakings and relax restrictions on products like digital assets, while still maintaining essential safeguards for the system.
Healthcare: Shifting Priorities and Regulatory Changes
The Trump administration has outlined a healthcare agenda that prioritizes reducing prescription drug prices, emphasizing preventive care measures, and rolling back expansions to the Affordable Care Act (ACA) implemented during the Biden era. These policy shifts have significant implications for healthcare providers, insurers, and patients, and will likely lead to changes in healthcare costs, access, and delivery.
In addition to the direct healthcare policy changes, the Trump administration’s broader agenda also has the potential to impact the healthcare sector. Issues such as immigration reform, workforce policy, and tariffs can influence healthcare operations in unexpected ways. For example, changes to immigration policy could affect the availability of healthcare workers, while changes to workforce policy could impact the cost of labor for healthcare providers. Tariffs on imported medical equipment or pharmaceuticals may also lead to increased healthcare costs.
The uncertainty surrounding America’s role in the world and Trump’s priorities have led to caution in hiring and capital investment. While some sectors remain optimistic, others are adopting a wait-and-see approach, leading to potential stagnation and economic slowdown in certain areas.
To navigate this uncertain landscape, businesses should stay informed about policy developments and their potential industry-specific impacts. Consulting with legal and tax professionals is crucial when considering structural changes or expansion. This is a smart time to reassess long-term strategies and ensure they align with the evolving regulatory and market dynamics. By staying informed, seeking expert advice, and remaining agile, businesses can position themselves to weather the uncertainty and thrive in the changing healthcare landscape.