The presidential election is a dead heat. A second Trump term is possible and, if it happens, is likely to have the advantage of a Republican-controlled Senate. A two-seat swing in the Senate is enough to shift control there away from the Democrats regardless of who wins the White House.
No one knows who will win the election. But if there’s a new Trump administration, it will focus on the economy and immigration. The Middle East and Ukraine also are unavoidable issues it will need to confront.
On the economy, expect Trump 2.0 to prioritize tax-relief, regulatory reform and an America First trade policy. On taxes, Trump will look to build on his 2017 Tax Cuts and Jobs Act (TCJA), which are set to expire at the end of 2025. Expect him to push for their extension and to propose new tax cuts, particularly benefiting working and older Americans. On the campaign trail, Trump has advocated ending taxes on tips, overtime, and Social Security payments. He also has suggested making interest on car loans deductible.
Congress will have a big role in shaping the final legislation. For businesses, making a clear, persuasive case to the members and staff of the congressional tax-writing committees – the House Ways and Means and the Senate Finance Committee – will be essential.
Updating the tax code in various ways will be a Trump priority. He and his appointees will fight to keep the corporate income tax rate at 21 percent or perhaps even reduce to 15 percent. His ability to do so will depend on whether the Republicans control both the House and Senate or just one of the chambers. He also will try to increase the size of the estate tax exemption and allow the $10,000 cap on deductions for state and local taxes (SALT) to lapse. Look for him to retain the relief for pass-through business income.
Regulatory reform also will be a Trump focus, picking up where he left off in 2020. A new Trump administration will work to foster innovation and end what has been a regulatory assault on artificial intelligence and digital assets such as cryptocurrency. He also will attack “woke” policies that go by various names: ESG (Environmental, Social and Governance) and DEI (Diversity, Equity, and Inclusion). With Republicans likely to control the Senate, expect Trump to push regulatory nominees who will undo several Biden-era initiatives including the Basel III capital framework and the Security and Exchange Commission’s climate disclosure rule. .
A Trump administration will vigorously oppose restrictions on natural gas exports. The U.S. is the world’s largest producer of natural gas. Energy production and exports translate into job creation, which is what politicians crave on behalf of their constituents. By ending export restrictions, a Trump administration will make it less likely that that American allies will turn to Russia and other overseas sources for energy.
Trade reform would be the third pillar of the Trump economic playbook. He wants to level the playing field between the U.S. and foreign countries and boost high-skilled, high-paying manufacturing jobs. In particular, he would fight unfair trade practices by Beijing.
Confronting China commercially has bipartisan support. For Republicans and Democrats alike, pushing back against China is a priority. Both parties worry that its trade and corporate tactics such as theft of intellectual property and forced technology transfers benefit the Chinese Communist Party and its military.
Bob Lighthizer, Trump’s former Trade Representative, favors a “strategic decoupling” from China, phased-in over several years to minimize economic disruption. Such measures would include raising tariffs on imports from China and strengthening U.S. customs laws.
Expect a Trump administration to increase limits on Chinese investments in the U.S. and enhance export controls. Lighthizer has identified both as policies that China has toward the U.S. and that turnaround is fair play. In Trump world, trade is intertwined and inseparable from national security.
Keaghan Ames served at the Commodity Futures Trading Commission (CFTC) as Senior Policy Advisor and Counselor to Commissioner Caroline Pham in 2022 and 2023. He is a Vice President of the BGR Group where he is a member of the firm’s Financial Services Practice. The BGR Group is a government affairs and communications firm based in Washington, D.C., with offices in Austin, Atlanta and London.
Heather Nauert was Acting Under Secretary of State for Public Diplomacy and Public Affairs from 2018 to 2019, and the department’s spokesperson from 2017 to 2019. She is a member of the BGR Group’s Advisory Board.
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