President-elect Trump’s proposed agenda combines deregulation, relaxed tax rates, deep cuts to federal spending, and new broad-ranging tariffs. Stakeholder coordination and engagement will be critical to preserve federal programs and incentives. That will mean positioning issues in the prisms of the incoming administration’s “America First” priorities: trade, jobs, domestic manufacturing and innovation, and competition with China.
Institutional Strain
The incoming administration has signaled its intention to challenge the Impoundment Control Act of 1974, which restricts the President’s ability to reject congressionally approved spending. Overturning the act could imperil programs across federal agencies, including those supporting clean energy, carbon management, and critical infrastructure. This, combined with norm-breaking proposals like recess appointments to bypass Senate confirmations, threatens the long-term constitutional order.
In Congress, Trump will try to dominate the GOP’s legislative agenda, but narrow majorities in both chambers necessitate near-unanimity within the party to pass legislation. With no real promise that Speaker Johnson will have quelled the far-right faction of the House Republicans, Speaker Mike Johnson may have to again lean on Democrats to move legislation. In essence, moderates may temper more extreme proposals.
The Supreme Court’s independence remains a wild card. While its conservative majority has overturned precedents like Roe v. Wade and Chevron, the court’s response to broader challenges to constitutional norms—such as impoundment, persecution of political enemies or executive overreach—will surely shape Trump’s ability to achieve his most contentious goals.
For business, the administration’s deregulatory focus, coupled with lower corporate taxes and a strong dollar, creates opportunities, particularly for traditional energy sectors. On the other hand, heightened trade barriers, the rollback of clean energy incentives, efforts to politicize the Federal Reserve, and attendant risks to constitutional governance may create long-term instability. U.S. democratic institutions have historically proven resilient, but companies will have to be vigilant to risks associated with domestic unrest and fractures in global alliances.
We outline below our views on key appointments.
Energy
North Dakota Governor and Interior Secretary nominee Doug Burgum, who has had a very successful track record in business, has been tentatively designated as the new Administration’s overall energy czar. Over his several terms in the Governor’s office, he has been a big supporter of carbon sequestration. While he is expected to moderate more extreme energy policy proposals, the new administration will certainly return to a supportive position on LNG commercial trade. Chris Wright, a fracking executive, and Trump’s pick for Energy Secretary, will directly oversee billions in infrastructure and clean energy spending. The reviews on Wright are mixed. Last year, Wright expressed serious skepticism regarding aggressive climate policies, emphasizing fossil fuel development. Others, however, have reported his openness to ambitious climate investments in such technologies as geothermal and nuclear energy.
Trump has prioritized “U.S. Energy Dominance”, to quell the unfounded fears of the fossil fuel industry phase out, despite oil and gas production being at near all-time highs under Biden. Trump has been vocally opposed to value of clean energy incentives. Wholesale repeal of Biden-era clean energy incentives, adopted as part of the Inflation Reduction Act (IRA), however, is unlikely. While EV and clean manufacturing tax credits are likely targets for elimination when Congress revisits tax policy next year, Elon Musk’s influence as “advisor in chief” may result in restructured incentives that more stringently support domestic activity. Other Republicans like the IRA. In August, eighteen Republican members signed a letter to Speaker Mike Johnson (R-LA) advocating for the maintenance of “sector wide energy tax credits”, citing active corporate investments and building efforts. Fifteen out of eighteen have won their reelection bids, with John Curtis (R-UT) set to fill Mitt Romney’s open Senate seat in January. Rep. August Pfluger (R-TX) who sits on the influential Energy and Commerce Committee also warned against wholesale repeal of IRA incentives at this year’s COP29 in Baku.
Finance
A Republican-controlled Securities and Exchange Commission will mark a stark departure from Chairman Gary Gensler’s muscular approach on issues related to climate change, cryptocurrency, and labor. The SEC’s rules on Climate-Related Disclosures for Investors adopted in April 2024 are prime targets for amendment and repeal. Federal Reserve Chair Jerome Powell has confirmed his intent to complete his term through 2026. While Trump previously clashed with Powell, senior advisors suggest the President-elect is unlikely to seek his removal, signaling some stability in monetary policy. Following years of GOP pushback on corporate ESG policies and investments, the updated Department of Labor 2022 ERISA rule will also likely be subject to reversal.
Trade
Trump’s promised trade policies, including imposition of steep universal tariffs and further duty hikes on Chinese imports promise to bolster some U.S.-based manufacturers, however, at the cost of disrupting global supply chains and raising costs for American consumers. Key inputs for EV batteries, wind turbines, and solar panels may face supply chain disruptions, particularly if the incoming Administration targets trade partners such as Mexico and Vietnam. In the his pervious term, Trump’s Administration appeared singularly focused on China, leaving other low-cost importers out of the sanctions threat. The new Administration may also employ a more targeted approach, for example, interest in a carbon tariff (CBAM) has been growing among Republicans. Robert Lighthizer, Trump’s former U.S. Trade Representative and likely trade czar, publicly backed the idea in 2023. Pressure to implement a CBAM will grow as Republicans look for funding sources to offset next year’s tax cuts.
Environment
Former New York Congressman Lee Zeldin, tapped to lead the EPA, is likely to oversee significant rollbacks of environmental regulation and enforcement. Most Biden-era regulatory policy reversals will take time, as withdrawal of rules must follow the legal nuances of the Administrative Procedures Act (APA). Trump’s EPA was remarkably challenged during his first term, taking nearly three years to eviscerate the Obama-era climate rule. The rapid rollout of policies and nominees since election day, however, indicate that this time the incoming administration are much more prepared. EPA’s rule on coal-fired power plants announced in April 2024 is up for immediate scrapping. Other programs, such as the methane waste emissions charge, were statutorily established and will therefore require Congress to amend or abolish.
Republicans and Democrats are optimistic about passing a permitting and National Environmental Policy Act (NEPA) reform package. Senators Joe Manchin (I-WV) and John Barrasso (R-WY) have spent the past year finalizing a comprehensive package covering transmission, clean energy, oil and gas and nuclear permitting among other items. A deal may not be enacted before the 118th Congress adjourns as a Republican trifecta will want to exert greater leverage in the 119th Congress. Trump has projected even more expansive reforms, and congressional Republicans will feel less constrained by environmental considerations, which divided Democrats in the 118th Congress.
Alex Blair advocates on behalf of clients before lawmakers and regulators on issues including financial services, agriculture, trade and emerging climate technologies. He was closely engaged in developing and advocating for key industrial decarbonization provisions in the Inflation Reduction Act of 2022 and the Infrastructure Investment and Jobs Act of 2021. He also maintains a strong understanding of the European policy landscape with respect to climate, agriculture, and trade issues. He has represented clients at agriculture, ESG, and climate forums across Europe and the United States.