The open house days of Donald Trump’s second administration sent companies scrambling to understand the arcane provisions of historic laws, ramp up their legal defenses 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 continues to trade partners on speculation about how and when to carry out his threat of punitive tariffs.
At the end of a whirlwind week that began with more than 100 executive orders and actions since Trump’s inauguration, corporate America’s advisers say the window is open to influence policy — but only for those who can keep up.
“The range of policy outcomes is probably as high as it’s 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 was well-telegraphed, but some details still caught companies on edge.
Promise to tear off a Global Minimum Tax Treaty For example, pushed through the OECD, it came with a threat to double US taxes on expats and companies from countries that still follow suit, under a never-before-used part of the tax code written before World War II.
“On the one hand, the fact that there has been a muscular response has been widely acknowledged” by US multinationals, which have long complained about the deal, said Pat Brown, a partner in PwC’s tax practice. “But one of the questions we got was, ‘My CEO is a citizen of a foreign country who lives and works here.’ Should I go tell my CEO that his tax rate can double? “
Trump Advisers have vowed to “flood the zone” with executive actions, in part to keep opponents on the back foot. Consultancies, law firms and investment banks have built complex plans to monitor orders and isolate visible points for clients.
“Where there’s a wealth of information, there’s often a poverty of attention,” said Kevin Madden, a Republican strategist at the Penta Group consultancy, which has set up a “war room” to track the excuses. “The challenge for corporate leaders is prioritizing all that information and activity.”
Nowhere was that more evident than in the energy sector, after Trump called for emergency powers to clear regulatory hurdles to fossil fuel projects and roll back many of his predecessor’s executive actions.
He also shocked the clean energy industry by demonstrating how the executive branch could undermine funding apparently mandated by Congress. One order suspended loans offered to developers and manufacturers According to the Inflation Reduction Act and the Bipartisan Infrastructure Act. The means to unlock that money is now unclear and may be conjectured in broader congressional negotiations to overhaul the IRA.
William Oplinger, chief executive of US aluminum producer Alcoa, said his company’s two domestic smelters could be at risk if the tax breaks were cut.
The support “allowed those facilities to continue operating in the current environment,” he said, adding that the company would determine their long-term viability once it was clear what any changes to the IRA would mean and whether there were additional tariff impacts.
The wind farm took a particularly hard hit as a result of orders that froze permit hiring and launched an immediate review of permit practices, which cover existing projects.
Some firms are racing to name a Republican-aligned lobbying firm that they hope will have the administration’s ear. Federal disclosures show that renewable energy developers Energyra and Nextera engaged government relations with Polaris last month.
Trump’s energy orders bear a resemblance to the five-point road map proposed last summer by the American Petroleum Institute, a lobbying group of fossil fuel producers. Mike Sommers, executive director of the API, said the institute is now moving to influence policy implementation.
“A lot of these executive orders direct agencies to do things, but a lot of those agencies don’t even have secretaries now,” he said. “What we’re trying to do is fill in the blanks for the new department heads, so they know exactly how to implement the president’s vision.”
Although Trump did not follow through on his promise to impose new tariffs on America’s trading partners on “Day One,” the executive memorandum ordered the department to review existing trade practices, with an April 1 deadline. He also indicated at a press conference that he could hit Mexico, Canada and China with tariffs on February 1.
Evan Giesemann, a tax and trade advisor at EY, told clients on Wednesday’s Webinar: “While nothing with President Trump is final until it’s implemented … I can’t stress enough how broad this memo is, showing how serious it is in creating structural changes in our trade policies and quite quickly.”
In some quarters, the executive actions crystallized concerns that the new tariffs, along with the potential deportation of some of the American workforce, could slow inflation and limit the Federal Reserve’s room to cut interest rates.
Carole Streicher, advisory leader for KPMG in the US, suspected that concerns were behind this week’s spike in incoming calls from private equity firms to initiate sales.
“Many are sitting at the starting line ready for the gun to go off,” she said. “The debate now is whether there is a short window over the next three to six months where interest rates will be at their current level and we need to transport before that window closes.”
The executive actions also appear to accelerate an overhaul of the company’s diversity, equity and inclusion programs. Trump ordered government agencies to compile 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 organizations.
“They are bullying American employers into moving away from what are otherwise perfectly legitimate efforts,” said Jenny Yang, a former commissioner at the Equal Employment Opportunity Commission, now a consulting partner.
Yang said many firms have examined their DEI policies to make sure they are watertight, but law firms send emergency bulletins to clients offering legal reviews. The seller’s target on Friday became the latest company Row Back Previous DEI Obligations.
Krueger TD Cowen said this week’s executive actions came at “record speed and breadth,” with many unanswered questions still being digested. “But at least the preseason is over now,” he said. “Now you can start putting pen to paper on policy.”
