New Administration Could Rewrite How America Does Business

"President-elect Donald Trump's victory in Tuesday's election has business leaders contemplating how the new administration could reshape policies ranging from the environment to technology and corporate taxes.

Trump's stated goals have been to freeze new climate regulations, introduce protectionist measures for American-made products -- particularly in high-tech industries -- and streamline the bureaucracy and cost of the federal government, among others.

Republican control of the Senate should boost Trump's efforts, including by easing the way for swift approval of his agency nominees and leadership of oversight committees.

Here are some areas where the new administration could shift or even reverse the Biden administration's strategies.

Technology

-- AI deregulation. Trump will likely take a business-friendly approach to federal oversight of artificial intelligence. Big Tech and startups alike have pushed for a light touch on AI safety and transparency rules, which they say would keep innovation flowing. The Biden administration last year issued an executive order on AI, which Trump has said he would dismantle. The order covered things like monitoring the training and outputs of AI models.

Doing away with the order could cut red tape and speed up product launches, said Daniel Castro, vice president of the Big Tech-funded think tank Information Technology and Innovation Foundation. On the other hand, it could make things harder for enterprises, which would have to take on the onus of investigating AI model safety.

-- On-shoring of chip manufacturing. The bipartisan Chips and Science Act, signed into law by President Biden in 2022, has recently come under attack by Republicans, including Trump, who have criticized the federal government's role. The bill is designed to funnel some $53 billion in subsidies and tax credits toward domestic semiconductor manufacturing facilities.

Financial regulation

-- Biden rules review. Wall Street lobbyists on Wednesday said they were hopeful the incoming administration would take a hard look at some of the Biden administration's more controversial proposals, including capital requirements for big banks and consumer-finance protections.

History suggests undoing many Biden rules might not be easy. If Republicans succeed in winning the House as well as the Senate, they may invoke the Congressional Review Act, which allows lawmakers to vote to overturn regulations finalized within a 60-day legislative window. In 2016, a Republican-controlled Congress used the act to roll back 16 regulations issued in the final months of the Obama administration.

This time around, Biden's regulators made a push to finalize key regulations early, putting them outside the window for congressional review. That means that for many Biden regulations, an incoming Trump administration would be forced to go through a lengthy repeal-and-replace process.

-- Private equity's retail push. Trump's victory will likely aid private equity's efforts to raise money from individual investors, an industry priority. During the first Trump administration, SEC leadership expanded the pool of so-called retail investors allowed to back private-equity funds, and the Labor Department sought to allow private equity into workers' retirement plans.

-- Carried-interest tax. In Congress, Republican victories lower private equity's anxiety about the tax negotiations expected to take place next year. Now, the carried-interest tax treatment -- an industry priority often criticized by Democrats -- is unlikely to be seriously threatened, while key provisions from the 2017 Tax Cuts and Jobs Act benefiting the industry will more likely be extended, lobbyists say.

Climate

-- The Inflation Reduction Act's future. On the campaign trail, Trump promised to claw back all or part of the Inflation Reduction Act, the Biden administration's signature climate policy. It is unclear if Republicans would pursue a full repeal of the law, said Julien Dumoulin-Smith, an analyst at Jefferies. The law, which has routed funding to many red states, has won support from some lawmakers whose districts have benefited from new investments.

-- EPA emissions rules. Environmental Protection Agency emissions rules for cars, buses and heavy-duty trucks that were issued this year are likely to come under scrutiny by the Trump administration. The agency's stricter rules for tailpipe emissions stretch out over several years, with targets from 2027 to 2032. The trucking industry also is supposed to reduce emissions over a similar timeline. Trucking groups are suing over the mandate, which the American Trucking Associations says is unachievable with the current state of zero-emissions technology." [1]

1. Election 2024: New Administration Could Rewrite How America Does Business. Wsj.  Wall Street Journal, Eastern edition; New York, N.Y.. 08 Nov 2024: A.3.