The opening days of Donald Trump’s second administration have sent businesses rushing to understand obscure provisions in historic laws, shore up their legal defences and find ways to shape the radically changing policy landscape.
Trump’s early moves have shown he plans to use a broader than expected toolkit to implement his agenda, even as he keeps trading partners guessing about how and when he will enact his threat of punitive tariffs.
At the end of a dizzying week that began with more than 100 executive orders and actions after Trump’s inauguration, corporate America’s advisers say a window is open to influence policy — but only for those able to keep up.
“The range of policy outcomes is probably as high as it has ever been,” said Chris Krueger, strategist at TD Cowen’s Washington research group. “The right and left tails are massive, and all roads lead to Trump.”
From promoting fossil fuels and expanding tariffs to deporting undocumented immigrants and challenging “woke” diversity initiatives, Trump’s agenda had been well telegraphed, but some details still caught companies off guard.
A promise to unpick a global minimum tax deal brokered through the OECD, for example, came with a threat to double US taxes on expats and companies from countries that continue to pursue it, under a never-before-used section of the tax code written before the second world war.
“On the one hand, the fact that there was a muscular response was received with broad acclaim” from US multinationals, who have long complained about the deal, said Pat Brown, partner in PwC’s tax practice. “But one of the questions we got immediately was: ‘My CEO is a citizen of a foreign country who happens to live and work here. Do I need to go tell my CEO his tax rate may double?’”
Trump advisers had promised to “flood the zone” with executive actions, partly to keep opponents on the back foot. Consultancies, law firms and investment banks built elaborate plans to monitor the orders and isolate salient points for clients.
“Where there’s a wealth of information, there’s often a poverty of attention,” said Kevin Madden, a Republican strategist at consultancy Penta Group, which set up a “war room” to follow the pronouncements. “The challenge for corporate leaders is prioritising all this information and activity.”
Nowhere was that more evident than in the energy sector, after Trump invoked emergency powers to clear regulatory obstacles to fossil fuel projects and rescinded many of his predecessor’s executive actions.
He also shocked the clean energy industry with a demonstration of how the executive branch could undermine funding apparently mandated by Congress. One order halted loans offered to developers and manufacturers under the Inflation Reduction Act and bipartisan infrastructure law. The means to unlock that money are now unclear and may get tangled up in broader congressional negotiations to revise the IRA.
William Oplinger, chief executive of US aluminium producer Alcoa, said his company’s two domestic smelters could be at risk if tax credits were cut.
The support “has allowed those facilities to continue operating in the current environment”, he said, adding that the company would determine their long-term viability when it was clear what any IRA changes would mean and if there were additional impacts from tariffs.
Wind power took a particularly heavy blow as a result of orders that froze leasing approvals and triggered immediate review of permitting practices, which cover existing projects.
Some companies are racing to appoint Republican-linked lobbying firms they hope have the ear of the administration. Federal disclosures show renewable energy developers EnergyRe and NextEra hired Polaris Government Relations last month.
Trump’s energy orders bore resemblance to a five-point road map proposed last summer by the American Petroleum Institute, the fossil fuel producers’ lobby group. Mike Sommers, API chief executive, said the institute was now moving to influence the implementation of policy.
“A lot of these executive orders are directing agencies to do things, but many of these agencies don’t even have secretaries now,” he said. “What we are trying to do is fill in the blanks for the new department heads, so they know precisely how to implement the president’s vision.”
While Trump did not fulfil a promise to impose new tariffs on US trading partners on “day one”, an executive memo ordered departmental reviews of existing trade practices, with a deadline of April 1. He also indicated at a press conference that he could hit Mexico, Canada and China with tariffs on February 1.
Evan Giesemann, an adviser on tax and trade at EY, told clients in a Wednesday webinar: “While nothing with President Trump is final until it is implemented . . . I can’t underscore enough how wide a net this memo casts, showing how serious he is about making structural changes to our trade policies and fairly quickly.”
In some quarters, the executive actions crystallised concern that new tariffs, along with the potential deportation of a portion of the US labour force, could stoke inflation and limit the Federal Reserve’s room to cut interest rates.
Carole Streicher, deal advisory leader for KPMG in the US, suspected that concern was behind the spike this week in incoming calls from private equity-owned companies about starting a sale process.
“Many are sitting on the starting line ready to have the gun go off,” she said. “The discussion now is whether there is a short window for the next three to six months where interest rates are going to be at their current level and we need to transact before that window closes.”
The executive actions also appear likely to accelerate companies’ recasting of diversity, equity and inclusion programmes. Trump ordered government agencies to draw up lists of “the most egregious and discriminatory DEI practitioners in each sector of concern” and propose “up to nine potential civil compliance investigations” of public companies and other organisations.
“They’re bullying American employers into backing away from what are otherwise fully lawful efforts,” said Jenny Yang, former commissioner at the Equal Employment Opportunity Commission, now partner at the consultancy Working Ideal.
Yang said many companies had examined their DEI policies to check they were watertight, but law firms were sending urgent bulletins to clients offering legal audits. The retailer Target on Friday became the latest company to row back previous DEI commitments.
TD Cowen’s Krueger said this week’s executive actions had come “at record speed and with record breadth”, with much still to digest and many questions unanswered. “But at least now pre-season is over,” he said. “Now you can start putting pen to paper on policy.”
