In a shock to investors and political analysts around the world, Donald J. Trump won the 2016 Presidential election, putting the Republican Party in charge of the White House and Congress for the first time in a decade. Even though the voting has ended, the rancor in Washington and across the country over specific issues will only grow, including disputes within the Republican Party itself, as well as between the so-called “establishment” and those who want to pursue radical change, whether on the Left or Right. President-elect Trump ran as an anti-establishment candidate supported by a large portion of Americans, many of whom traditionally did not vote Republican, and who are angry at a political system they see as no longer serving their needs. President-elect Trump promised bold, often controversial, reforms. The details of these reforms and whether they will be supported in Congress are still developing.
Below is Pillsbury’s assessment of some of the top issues that will be faced by the new President and Congress and the potential impact on business interests, including:
- Foreign Policy, International Trade and Sanctions
- Financial Services, Tax Reform and International Enforcement
- Infrastructure and Public-Private Partnerships
- Energy and Environmental
- Health Care
- Antitrust Policy
- Communications Policy and Regulations
- Government Contracts
- Ethics and Campaign Reform
- State and Local Government Activism
Beyond these highlighted issues, we also expect to see:
- Intense debates over cutting government spending, especially on entitlement programs, yet increasing defense and major project budgets
- Increased deregulation around food, pharmaceuticals and other consumer products.
- Multi-faceted immigration reform, including greater border enforcement and, potentially, H-1B visas for high-skilled workers
A Trump presidency creates significant opportunities for major policy change. We expect congressional lawmaking and Executive Branch rulemaking to play a more central role in creation of new policies and regulation than ever before.
Savvy businesses and other stakeholders will actively engage in the legislative and regulatory process as the pre-eminent way to influence outcomes during this period of uncertainty.
Foreign Policy, International Trade and Sanctions: A New Era
President-elect Trump comes to office with little foreign policy experience and has promised radical changes from the approach taken by President Obama on trade and America’s relationships around the world.
The most fundamental initial change will likely be the United States’ relationship with Russia. President-elect Trump promised to seek a new engagement with Russian President Putin in an effort to find common ground and build a new working relationship. How this will be achieved remains an open question, as well as whether President Trump would be constrained by the diplomatic and security realities he will confront upon taking office. However, this rapprochement could have a profound impact on U.S. policy towards Ukraine, U.S. support for the European Union and NATO, the application of sanctions against Russia, and U.S. activities in Syria; all of which could shake longstanding U.S. alliance and relationships in Europe, the Middle East and Asia.
International trade will also experience a sea change under President Trump. The Trans-Pacific Partnership (TPP) and EU-US Free Trade Agreement will likely be scrapped or fundamentally altered, likely to a point unacceptable to the other parties. President Trump will seek to reopen and renegotiate existing trade deals, especially NAFTA. He will also pursue protectionist or punitive measures to keep industry in the United States or retaliate against other nations, such as pursuing domestic and international trade cases against China, which he believes are unfairly hurting U.S. industry.
All of this will create huge amounts of unpredictability in international trade, disrupting markets and traditional trading patterns. Conversely, it also will create significant opportunities for those businesses that would like to change certain trade rules, create or protect markets, or obtain more robust U.S. support for addressing their particular trade issues.