Changes Expected as Trump Administration Continues to Take Shape

As Washington prepares for new leadership in January 2025, significant policy changes appear on the horizon. The incoming administration’s agenda suggests a substantial shift in US economic and regulatory priorities, with implications that will reach across industries and borders. From international trade to emerging technologies, these changes promise to create both challenges and opportunities for US and international companies and investors.

Goodwin lawyers across the firm and globe are monitoring and preparing for the Trump administration and thinking about how new policies will affect our clients and the industries in which they operate. Visit our New Directions web page for insights and analysis on policy, leadership, and other changes related to the new administration.

Below, lawyers from across the Goodwin network consider 10 areas where anticipated policy shifts could significantly affect our clients and their businesses.

Trade 

Anticipating impacts of the incoming administration on trade topics affecting our clients, we expect China will continue to occupy center stage — including how the Committee on Foreign Investment in the United States (CFIUS) will regard China and other countries and their governments. In addition to the proliferation of US export controls and outbound investment restrictions affecting China’s development of semiconductor, AI, and quantum computing technologies (and possibly others) and US efforts to regulate the sharing of US person data across borders, we expect significant new tariffs on goods imported from China into the US. Tariffs are threatened against other major trading partners, including Canada, Mexico, and EU countries, with each affected country poised to retaliate as they are able. The supply chain for US goods will be affected by these developments, including not only high-end items (e.g., rare earth exports from China to the US) but also lower-value goods such as groceries and consumer items. Changes in the US immigration laws and enforcement could also have an impact on trade. Some countries will likely enter agreements to mitigate these impacts, with consequent sector- or even company-specific benefits. This trend of decoupling US interests from those of our allies could erode the favorable treatment our allies enjoy under US trade regulatory laws, and vice versa. The new administration’s treatment of Russia’s economy and its oligarchs is a wild card, as is an outcome in the Russia-Ukraine war and what follows.

— Richard Matheny

Tax

The incoming administration in 2025 will have the opportunity to extend several provisions of the 2017 Tax Cuts and Jobs Act (TCJA) that are due to expire in the next four years. The earliest of these are scheduled to expire at the end of 2025. Some notable TCJA provisions expiring in 2025 include lower individual marginal tax rates, larger exclusion amounts from estate and gift taxes, a $10,000 limit on state and local tax deductions, and the “199A deduction,” which allows up to 20% of pass-through business income to be deducted. In 2026, tax benefits for “opportunity zone” investments are set to expire, and in 2028, the limit on excess business loss deductions for taxpayers other than C corporations will expire as well.

If the administration attempts to extend these provisions, it will need nearly unanimous Republican support in Congress. Through the process of budget reconciliation, Congress can modify tax law using expedited legislative rules that avoid filibusters, therefore, requiring only majority votes in each chamber. Notably, Congress has the opportunity to pass two budget reconciliation bills in 2025, instead of the usual one, because a budget reconciliation bill did not pass in 2024. This may provide the new administration with two separate opportunities to enact its taxation policies using the budget reconciliation process.

— Neal Sandford and Romina Weiss

Government Contracts and Grants

With the arrival of a new administration in January 2025, federal contractors, subcontractors, and grant fund recipients should brace for sweeping changes related to federal procurement. We expect to see executive orders that drive federal procurement processes and prioritize the strengthening of national security, the protection of critical infrastructure, the growth of US manufacturing, the prohibition of offshoring certain jobs, and the increase of Buy American requirements in every industry and sector. We also expect the repeal of certain existing procurement-related executive orders and acquisition regulations, including those related to clean energy and sustainable products and services. As well, small businesses that contract with the federal government have enjoyed support under the Biden administration, but the incoming administration has signaled that procurements set aside at the federal agency level will not continue if based on race or sex. Finally, we anticipate changes to the award of federal contracts and grants, with the goals of opening up federal funding to more companies and increasing the speed with which taxpayer dollars are awarded. While these changes may be welcomed by industry, many businesses will need assistance in navigating the evolving compliance landscape.

— Liza Craig

Employment

Under the new administration, we anticipate looser regulations across the various federal agencies governing employment practices, including the Department of Labor (DOL), National Labor Relations Board, and the Equal Employment Opportunity Commission. In response, we anticipate that several states will pass stricter employment laws, implementing tighter controls at the local level, including laws regarding paid family leave, minimum wage, contractor classification, pay equity, and restrictive covenants. In addition, we anticipate increased scrutiny of diversity, equity, and inclusion (DEI) initiatives, including regulations limiting or prohibiting DEI training and recruitment and retention policies aimed at increasing diversity. We further anticipate stricter policies governing immigration, including stricter standards for issuing visas and longer visa processing times.

— Christina Lewis

ESG

Activity at the federal level related to environmental, social, and governance (ESG) issues under the new administration is likely to involve a combination of the reinstatement of policies under Trump’s first administration, the abandonment of initiatives promoted during the Biden administration, and new efforts to promote an anti-ESG agenda. For example, Biden reversed a DOL rule adopted during Trump’s first administration prohibiting ERISA retirement plan fiduciaries from considering ESG factors when making investment decisions. Under the new administration, the requirement is likely to revert to one that requires plan fiduciaries to consider only “pecuniary factors,” which are likely to be defined specifically not to include ESG considerations. Another example of a likely change in agency position concerns the current litigation challenging the SEC (Securities and Exchange Commission) climate disclosure rule. The likely new SEC chair, Paul Atkins, is unlikely to continue to support the SEC’s current resistance to the parties opposing the rule. Even if the many intervenors in the case decide to continue fighting the challenge against the climate disclosure rule without the SEC, Atkins could direct SEC staff not to enforce it. Moreover, with Republican control of both chambers of Congress, previously unsuccessful attempts to adopt legislation invalidating the rule now have a better chance of enactment. Regarding new anti-ESG efforts, certain key members of Trump’s senior leadership team strongly support “anti-woke” initiatives. Accordingly, we may see proposals at the federal level that go beyond simply reverting to policies adopted under Trump’s first administration and proactively make ESG practices more difficult to adopt across a wide range of contexts.

As a reaction to these anti-ESG forces, blue states may double down on their efforts to support existing requirements or create new ones to fill any perceived voids. For example, even if the SEC climate disclosure rule effectively dies, large companies that operate in California will still be subject to SB 253 and SB 261, which impose many of the same reporting requirements as the SEC rule. Although these laws are also subject to litigation opposing them, they are much more likely than the SEC rule to survive this challenge. Separately, the New York Legislature may prioritize finalization of its own currently stalled climate reporting requirements, which are almost identical to California’s corporate climate reporting laws.

In the meantime, many global businesses subject to legal and regulatory requirements in the US and other jurisdictions may have to comply with new corporate sustainability requirements, such as the EU’s Corporate Sustainability Reporting Directive and Corporate Sustainability Due Diligence Directive, regardless of the existence of similar requirements in the US.

— Danielle Reyes

Healthcare and Life Sciences

We anticipate meaningful legislative and regulatory developments in the coming four years for healthcare and life sciences. Several environmental factors contribute to the Trump administration’s ability to advance change: (1) a popular mandate to make the US healthy again; (2) a Republican-led Congress to resolve turf disputes and to push forward a uniform agenda; (3) the Loper Bright decision’s end to long-standing judicial deference for regulatory rulemaking; (4) an overarching sociopolitical rhetoric focused on big picture problems plaguing the healthcare system in the US (e.g., the role of pharmacy benefit managers [PBMs] in the drug supply chain, the significant cost of pharmaceuticals, and popular outrage over the health insurance industry’s coverage and care authorization policies); (5) political rhetoric positioning the administration at odds with Big Pharma; and (6) the selection of senior administration officials who are Washington, DC, outsiders willing to take a disruptive view to rulemaking and who are supportive of innovation and regulatory flexibility. Specifically:

• At the Food and Drug Administration (FDA), we can expect the agency to focus on the efficiency of regulatory reviews of new drug and medical device products, the approval of new treatments and cures addressing unmet needs, the role of nutrition and nutraceuticals to make the US healthy and address chronic disease, the scrutiny of food chemicals for safety, and the potential benefits of newer treatment approaches including psychedelics and stem cells. We also expect to see the FDA under expected Department of Health and Human Services (HHS) leadership to take a hard look at the vaccine approval process and current public health recommendations around vaccinations. Additionally, we will be watching to see how the Trump administration addresses the FDA’s laboratory developed tests (LDTs), including in the context of current litigation challenging the LDT rule and whether any rulemaking or enforcement discretion approach will be employed to delay current plans to phase in regulation of LDTs beginning May 6, 2025.
• At the Centers for Medicare & Medicaid Services (CMS), Dr. Mehmet Oz would be the first CMS administrator who has also been the inventor of an advanced medical technology (i.e., the artificial mitral valve) and, accordingly, we might expect to see policies that are designed to minimize the time that patients have to wait to access advanced technology. We also expect to see continued adjustments to the Medicare Drug Price Negotiation Program and perhaps a reemergence of policies from the first Trump administration (namely, international reference pricing). We will most certainly see additional restrictions placed on PBMs and the fees they charge as part of their role in the drug supply chain. Further, Trump administration policies will likely emphasize the goals of greater transparency from providers about cost, tightening the relationship between physician and patient and minimizing regulatory inefficiencies.

More broadly at HHS, we anticipate a significant focus on efforts to curb fraud, waste, and abuse, especially in Medicare Advantage. We also expect a continued focus on the life sciences industry’s relationship with Chinese collaboration partners à la the BIOSECURE Act, including anticipating revised BIOSECURE-like legislation in 2025 and a continued spotlight on the FDA’s approval of drugs and devices based on clinical research conducted in China.

— Matt Wetzel and Julie Tibbets

Digital Assets and Blockchain

The Trump campaign made various promises to support the growth and innovation of digital assets and blockchain by creating a workable, practical regulatory regime, and the president-elect’s initial picks for leadership of the primary financial regulators and other pro-crypto appointments has caused great optimism in the digital asset industry and signals his intent to fulfill those promises. Almost certainly the industry will experience a more friendly regulatory environment and less aggressive enforcement activity from the SEC, Commodity Futures Trading Commission, and other regulators, which will lead to more activity and innovation returning to the US. Further, with a more crypto-friendly Congress beginning in January, crypto may be one of the few areas for positive, bipartisan collaboration and legislation. Many legislators that benefited from the support of the crypto industry have already signaled that a bipartisan financial infrastructure bill will be early in the 2025 agenda. All these changes are likely to result in a more definitive and favorable regulatory framework and regulatory bodies that are willing to work with, rather than against, the industry. We anticipate this will lead to a reopening of the US market for digital assets and bring more projects back to the US. We also expect token-driven fundraising to reemerge as a potential source of funds (though not a return to rampant initial coin offerings), continued growth and experimentation of decentralized finance projects, possible M&A activity, new capital sources for the industry from market participants previously hesitant to invest, and additional regulatory approvals of innovative projects and products, including more digital asset exchange-traded funds and initial public offerings.

— Grant Fondo and Karen Ubell

Artificial Intelligence

The new administration will refocus AI policy efforts on matters of defense, energy, and infrastructure. This means that policymakers and government and regulatory agencies will deal less with risks of AI bias and discrimination and more with ensuring the US’s competitive edge over China as well as relieving the choke points of chips supply and surging energy costs. While Trump has promised to repeal Biden’s AI executive order on day one in office, it remains to be seen whether and to what extent that will affect regulatory processes that agencies have already set in motion, including the National Institute of Standards and Technology AI Safety Institute and the Department of Homeland Security (DHS) Roles and Responsibilities Framework for AI in Critical Infrastructure. Absent a federal law, states will increasingly legislate on AI governance, safety, transparency, bias and discrimination, and individual rights, creating a complex ecosystem for businesses to operate in.

— Peter Marta and Omer Tene

Mergers and Acquisitions

With companies and financial sponsors holding tremendous amounts of cash earmarked for dealmaking, coupled with pent-up M&A demand, we anticipate a meaningful uptick in M&A activity in 2025. If the new administration successfully implements its pro-business, pro-investment agenda, this will drive increased domestic and cross-border dealmaking in the mid- and large-cap space for both public and private companies. Geopolitical conflicts — both existing and potential — could dampen buyer appetite, and cybersecurity concerns are top of mind. However, these risks can be mitigated through diligence, contractual protections, and in some cases rep and warranty insurance. While M&A participants should expect continued robust antitrust scrutiny, clients are optimistic that more traditional enforcement doctrine will return. They remain confident in their ability to close deals that strengthen competitiveness in a hot economy. The SEC is expected to maintain its efficient review of merger proxies in public M&A deals. With falling inflation and interest rates, we expect robust bidding in sales processes and increased strategic M&A activity.

— Mike Patrone

Privacy

With Republicans in control of both chambers, Congress could actually advance a legislative agenda, including perhaps a federal privacy law, which has eluded policymakers for decades. Interestingly, industry voices are pushing for federal legislation, in an effort to preempt the increasingly complex patchwork comprising, at last count, 19 state privacy laws. Short of comprehensive legislation, kids-focused privacy law is even more tenable as it has broad bipartisan support. Under a new chair, Andrew Ferguson, who recently expressed sharp criticism of Chair Lina Khan’s leadership, and with a Republican majority of commissioners, the Federal Trade Commission (FTC) will take a sharp turn from what’s been an expansive privacy agenda over the past four years. Specifically, the agency will scrap the rulemaking effort around “commercial surveillance” and refocus privacy enforcement on the FTC’s deception rather than unfairness authority. One policy effort that the new administration will likely continue is Biden’s executive order on protecting sensitive personal information of US persons from reaching countries of concern, in particular China. Finally, unless and until new federal legislation preempts the states, we expect to see a surge of state privacy legislation and enforcement, particularly in blue states focused on protecting consumer health information, not least in the area of reproductive rights.

— Omer Tene

Cybersecurity 

With the arrival of the new administration, there is uncertainty over the future of the Cybersecurity and Infrastructure Security Agency (CISA), which was established during the first Trump presidency under the DHS. We expect to see a “strategic pause” in the formulation of new CISA cyber incident reporting rules that were to be finalized in October 2025, with an effective date of early 2026, as well as the possible restructuring or even dismantling of CISA itself. There is also uncertainty over the National Cybersecurity Strategy issued by the Biden administration in March 2023. The new administration is likely to reject those aspects of the strategy that called for greater regulation of the private sector, such as the call for legislation that would shift liability to the owners of software products and services. Finally, we may see heightened geopolitical tension, which could lead to increased attacks against US critical infrastructure, 85% of which is owned by the private sector. That said, cybersecurity is generally considered a bipartisan issue, and given the incoming administration’s interest in government efficiency and a more favorable business environment, we may see a continuation of the Biden administration’s efforts to harmonize the patchwork of federal and state cybersecurity regulations. Companies will also be focused on whether the new administration will continue the current sector-specific approach to cyber regulation.

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Some sectors may experience reduced federal oversight and increased state regulation, and US policy changes could prompt international responses. Across all areas, businesses must stay informed and adaptable as Washington’s priorities shift. Our lawyers will continue to monitor these developments closely and provide updates as policies evolve in 2025 and beyond.

This informational piece, which may be considered advertising under the ethical rules of certain jurisdictions, is provided on the understanding that it does not constitute the rendering of legal advice or other professional advice by Goodwin or its lawyers. Prior results do not guarantee similar outcomes.