Key Compliance Shifts Under the Trump Administration – Industries Most Affected

While the administration might adopt a critical stance toward Diversity, Equity, and Inclusion (DEI) and Environmental, Social, and Governance (ESG) initiatives—potentially revisiting rules requiring companies to disclose climate-related risks, workforce diversity data, or other ESG metrics.. His administration is likely to focus on simplifying tax compliance, limiting enforcement overreach, and prioritizing materiality in corporate disclosures. While these measures may lower costs for businesses, they could also raise concerns about transparency and accountability. 
 
Let us take a closer look at the possible or anticipated compliance priorities under a Trump administration and the industries that may be most affected.

Immigration Enforcement, Stricter Workplace Audits and Form I-9 Compliance

During his election campaign, Trump had vowed to make immigration enforcement a priority. With stricter workplace audits and enhanced scrutiny of Form I-9 compliance taking center stage.Immigration enforcement is expected to be a key priority. These measures would aim to ensure that employers are hiring individuals authorized to work in the United States, while imposing significant penalties on businesses found in violation. The administration is planning to bring back workplace raids.  The implications of these policies could be especially challenging for industries that rely heavily on immigrant labor.  Employers would be required to ensure their records are accurate and up to date, as any discrepancies, even unintentional ones, could lead to hefty fines or legal actions. Repeat offenders or those accused of knowingly hiring undocumented workers could face even stricter penalties, including criminal charges.

Industries Affected by Stricter Immigration Enforcement

Industries heavily reliant on immigrant labor, such as agriculture, construction, hospitality, and manufacturing, are likely to face significant challenges under stricter immigration enforcement. Agriculture could experience labor shortages, higher costs, and disruptions in food production due to its dependence on seasonal workers. Construction firms may see project delays and increased costs as they address compliance gaps and workforce disruptions. Hospitality businesses, including hotels and restaurants, could struggle with tighter labor markets and the need to revise hiring practices. Manufacturing may face operational risks, labor shortages, and costly adjustments to meet stricter compliance requirements.

ESG and Climate Change

Under a Trump administration, significant changes to ESG (Environmental, Social, and Governance) and climate-related policies would be expected, reflecting a more business-friendly and deregulatory approach. Trump has historically been critical of what he calls “woke capitalism,” which includes ESG initiatives. This could result in scaling back or reversing climate-focused regulations, particularly those seen as burdensome to businesses. For example, policies requiring companies to disclose climate-related risks or sustainability metrics might be rolled back, and there could be less emphasis on federal support for renewable energy projects in favor of traditional energy sectors like oil, gas, and coal. One key target of change could be the SEC’s recently finalized climate disclosure rule, which mandates companies to report certain climate-related risks. A Trump-led SEC might work to revise or repeal these rules, using its authority to halt enforcement or choose not to defend ongoing lawsuits challenging the rule.

Industries Most Impacted by ESG and Climate Policy Shifts

If a Trump administration rolls back ESG and climate-related policies, traditional energy industries like oil, gas, and coal stand to gain from reduced regulations, while renewable energy may face slowed growth due to decreased federal support. Financial institutions could see lower compliance costs but face challenges aligning with global sustainability standards. High-carbon sectors like manufacturing and mining might benefit from cost reductions but risk losing favor with sustainability-focused investors.

Tax Credits and Tax Cuts

“My plan will significantly reduce taxes for workers and small businesses, eliminating taxes on tips, overtime, and Social Security benefits,” This is what Trump stated during a rally in Raleigh, N.C., just before the election. Tax reform is expected to be a key priority for the new administration, with targeted tax cuts and credits aimed at stimulating economic growth. Sectors like green energy, electric vehicles, and clean technology may gain from incentives promoting innovation and sustainability. Changes to tax brackets and increased deductions for individuals could provide financial relief, particularly for middle-income families.

Industries Affected by Tax Credits and Tax Cuts

Businesses across industries will be impacted by new tax policies. Mostly, Renewable energy, automotive, and technology sectors stand to gain from new incentives. However, businesses across all industries must ensure compliance to maximize benefits and avoid penalties.

Financial, Crypto, and Liquidity

Under a Trump administration, banking agencies, regulators, and the CFPB are expected to focus on transparency and move away from heavy-handed enforcement. This could mean linking enforcement actions more clearly to specific legal violations and prioritizing key risks like financial stability over routine compliance checks. However, bipartisan issues like anti-money laundering and sanctions enforcement will remain priorities.

In cryptocurrency, Trump has pledged to make the U.S. a global leader by supporting the industry with pro-crypto policies and a dedicated advisory council. Key signals will come from his appointments to the SEC and CFTC, which will influence crypto policies and collaboration. The industry is also watching for potential reversals of restrictive SEC guidelines, such as rules that limit banks’ involvement in crypto-related activities.

For capital and liquidity requirements, the Trump administration is likely to revise or scrap stricter capital standards proposed under the Biden administration, aiming for rules that are more business-friendly. Plans for global systemically important banks and other long-term debt and liquidity requirements are also uncertain, as the administration may focus on easing regulatory pressure on financial institutions.

Industries Affected by Liquidity and Crypto Policy Shifts

Under a Trump administration, banking agencies, regulators, and the CFPB are expected to focus on transparency and move away from heavy-handed enforcement. This could mean linking enforcement actions more clearly to specific legal violations and prioritizing key risks like financial stability over routine compliance checks. However, bipartisan issues like anti-money laundering and sanctions enforcement will remain priorities.

In cryptocurrency, Trump has pledged to make the U.S. a global leader by supporting the industry with pro-crypto policies and a dedicated advisory council. Key signals will come from his appointments to the SEC and CFTC, which will influence crypto policies and collaboration. The industry is also watching for potential reversals of restrictive SEC guidelines, such as rules that limit banks’ involvement in crypto-related activities.

For capital and liquidity requirements, the Trump administration is likely to revise or scrap stricter capital standards proposed under the Biden administration, aiming for rules that are more business-friendly. Plans for global systemically important banks and other long-term debt and liquidity requirements are also uncertain, as the administration may focus on easing regulatory pressure on financial institutions.

Trade Policies and Sanctions

A Trump administration’s trade policies and sanctions, centered on an “America First” agenda, would bring stricter compliance requirements for businesses involved in global trade. Proposed tariffs, including 10-20% on all imports and up to 200% on specific goods, would require companies to navigate changes in customs duties, country-of-origin rules, and trade laws like the Tariff Act of 1930. Export controls and sanctions, particularly targeting China and other geopolitical threats, would become more stringent, demanding rigorous due diligence and documentation. Manufacturers and businesses with global supply chains may need to relocate production, leverage tools like Foreign Trade Zones, and comply with transformation regulations to mitigate risks. Companies must proactively plan for tariff impacts, monitor evolving regulations, and adjust supply chains to manage uncertainties and ensure compliance in a shifting global trade landscape.

Industries Affected by Trade Policies and Sanctions

Trump’s trade policies and sanctions would heavily impact industries reliant on global trade, including manufacturing, technology, agriculture, retail, energy, automotive, and financial services. Higher tariffs on imports, such as raw materials, components, and consumer goods, would raise costs, disrupt supply chains, and force companies to consider relocating production. Technology and energy sectors could face export controls.

Wage and Hour Policies

Under a Trump administration, wage and hour policies could see significant shifts, though much remains uncertain. Employers may see a return to Trump-era rules making it easier to classify workers as independent contractors, easing compliance burdens for industries like the gig economy. While Trump has expressed openness to raising the federal minimum wage, no clear commitments have been made, leaving states to take the lead. Proposals like eliminating taxes on tips and overtime pay could offer financial relief to workers but require congressional approval. Other pending issues, such as raising the salary threshold for overtime exemptions and ending sub-minimum wages for workers with disabilities, remain uncertain as Trump may halt Biden-era initiatives. Paid leave, largely addressed at the state level, is unlikely to see significant federal changes, though federal employees may see extensions. Employers should monitor state and federal developments closely to stay compliant.

Industries Affected by Wage and Hour Policies

Industries with significant hourly workforces or reliance on independent contractors, including hospitality, retail, construction, gig economy, healthcare, manufacturing, and agriculture, are most impacted by wage and hour policies. These sectors face challenges from changes in minimum wage laws, overtime regulations, and worker classification rules. For example, restaurants and hotels are affected by adjustments to tip-related regulations, while retail and manufacturing businesses may face increased labor costs due to wage increases and stricter overtime rules. Gig economy companies, like rideshare and delivery services, could experience higher costs from reclassifying workers as employees, and healthcare providers must comply with overtime and salary regulations. Overall, these industries must stay adaptable to evolving policies that influence labor costs and operational efficiency.

AI Policy and Regulation

As the Trump administration takes office, artificial intelligence (AI) is expected to remain a key focus, with policies likely shifting toward reduced federal oversight to encourage innovation while maintaining a strong emphasis on national security. Leadership appointments, including Michael Kratsios as OSTP director, signal a commitment to leveraging AI for economic and governmental efficiency while restricting access to advanced technologies for foreign adversaries. Domestically, the rollback of strict federal AI regulations from the Biden era could lead to increased state-level activity, creating a fragmented regulatory landscape that may prompt calls for federal harmonization. Internationally, bipartisan agreement on AI’s importance to global leadership ensures continued efforts to safeguard U.S. advancements, balancing innovation with security and accountability amid evolving regulatory challenges.

Industries Affected by AI Policy and Regulations

The technology sector may see accelerated AI development but face restricted global market opportunities due to limits on advanced AI exports. Defense industries will prioritize AI integration for military and cybersecurity applications. Healthcare, automotive, manufacturing, finance, and retail sectors stand to benefit from fewer regulatory barriers, enabling advancements in diagnostics, autonomous vehicles, robotics, fraud detection, and customer personalization. However, fragmented state-level regulations on AI safety, privacy, and data governance could create compliance challenges across industries.

Cyber Security

Under the Trump administration, cybersecurity policies are likely to focus on reducing regulations and encouraging voluntary private-sector collaboration instead of mandates. While agencies like CISA may face budget cuts or reorganization, their critical role in protecting infrastructure and advancing cybersecurity initiatives ensures they will remain operational. Internationally, Trump is expected to take an aggressive stance against cyber threats from nations like China and Russia, prioritizing offensive actions and bilateral partnerships. Domestically, efforts to streamline incident reporting laws will continue, paired with a lighter regulatory approach to foster innovation. Additionally, Trump may shift industrial policies toward tariffs over subsidies for semiconductor manufacturing and take a more neutral stance on content moderation debates, potentially reducing Republican interest in repealing Section 230 protections.

Industries Affected by Cyber Security Policy Shift

Changes in cybersecurity policies will significantly impact industries like critical infrastructure, healthcare, financial services, technology, manufacturing, retail, and education, all of which handle sensitive data or essential operations. Critical sectors like energy and water rely on federal support, while healthcare and financial services may face increased responsibility for implementing protections if regulations are reduced. Technology companies must balance fewer compliance burdens with market expectations for secure designs, and manufacturers must address vulnerabilities in industrial IoT systems. Retailers handling payment data and educational institutions with limited budgets will also need to invest in cybersecurity measures to safeguard operations and maintain trust.