Donald Trump will be inaugurated on 20th January, beginning a four-year term that promises to usher in policies which will impact businesses in the United States and all over the world.
Consultants and corporations alike should be aware of what to expect in the coming year – companies will need to successfully adapt to changes in the commercial landscape and avoid any unwanted surprises.
Let’s take a look at a few key areas to watch out for in 2025.
1. Deregulation
One of Trump’s key policies to keep an eye on is deregulation. His plans to roll back Biden’s antitrust policy is a green light for M&A activity, particularly debt-funded transactions and private equity action, and businesses can look forward to an environment more favourable to deal opportunities.
Trump aims to encourage domestic investments by speeding up regulatory approvals for anyone investing $1bn or more in the United States. Companies should be ready to capitalise on opportunity, as well as consider any risks, such as continued antitrust enforcement in industries like Big Tech and pharmaceuticals .
Which specific sectors could be most affected?
Trump has plans to roll back green regulations which currently limit drilling for oil and gas and mining for coal; this could boost the value of traditional energy sectors, whilst potentially curtailing investment in renewable energy (more on that later).
Whilst Big Tech will most likely remain under scrutiny, Trump is installing Paul Atkins, who is notably in favour of cryptocurrency, as chair of the U.S. Securities and Exchange Commission (SEC). This signals a move towards innovation rather than regulation in the world of digital currency, particularly given that Trump has promised to eliminate 10 regulations for every new one in the SEC.
Investors take note; digital assets can expect to see a boom.
2. ESG
ESG practice is a hot topic relevant to all businesses in today’s world. The EU has introduced higher standards on disclosure of environmental risks – and this may well come into conflict with Trump’s stance on green policies. He has vowed to support the fossil fuel industry, and Republican states have already seen an increase in antitrust scrutiny and lawsuits against institutions promoting ESG investing. Businesses that operate within the EU and the United States will want to consider how to navigate this to avoid legal action from either side, making sure to adhere to necessary divestment practices.
How might the favouring of fossil fuels impact investment in the energy sector?
Well, 250 sustainable funds closed or merged in Europe during 2024 [pdf], and so many asset managers are likely to back away from their fossil fuel divestment policies.
However, businesses shouldn’t expect things to transform completely: funds are still flowing into renewable energy and green tech, and two thirds of large asset managers globally said that ESG has become more material to investment decision-making in the past five years.
ESG might become more tricky to navigate, but it will remain important.
3. Artificial Intelligence
What can corporations look for in the ever-popular world of Artificial Intelligence?
Trump’s plan to repeal Biden’s Executive Order on AI looks to ease restrictions, spurring faster developments and technological advancements.
Innovation in this sector may be further incentivised by new intellectual property policies: Trump wants to introduce stronger safeguards and more favourable policies for patent owners and licensors, including expediting the patent examination process.
However, tariffs on imports, particularly from China, could reduce the capital available for AI research and have a negative effect on supply chains that rely on imported components.
Businesses involved in this sector should seize chances offered by innovation, whilst looking out for any supply issues that may arise.
4. Tariffs, taxes, and interest rates
Onto one of the most talked-about elements of Trump’s campaign: tariffs.
Trump has vowed to impose universal tariffs on imports from all countries, as well as retaliatory tariffs against countries seen as engaging in unfair trade practices. Tariffs on Chinese goods will be especially high.
Designed to bolster domestic manufacturing and therefore support industry, Trump’s tariff policy has raised concerns about the United States’ capacity to substitute for imported goods by producing more domestically, meaning consumers could suffer reduced access to certain goods.
Higher prices for imported goods, such as components and raw materials, could also increase domestic production costs, which would be passed on to consumers in the form of higher prices.
Businesses operating in sectors sensitive to cost changes such as food, energy, and consumer goods will need to keep an eye on how tariffs could exacerbate inflation, as well as considering the resilience of existing supply chains.
Trump has also claimed he will significantly lower corporate tax rates, opening the door for a substantial boost in businesses’ profits.
As inflation moderates, interest rates will also see some cuts, lowering borrowing costs, and keeping money flowing in the loan markets. Although lending conditions could be negatively influenced by tight economic conditions caused by rising tariffs and more restrictive immigration policies.
Businesses can look forward to reaping the benefits of lower tax rates and potentially gaining access to cheaper lending capital, but should continue to cautiously watch other factors that could negatively impact the market.
The takeaway
Whilst it is impossible to predict just how Trump’s policies will play out, we can expect to see significant change in the above key areas.
Trump’s second term in office will most likely bring increased opportunity in areas such as M&A, AI and digital assets, whilst potentially raising some issues for ESG practices, renewable energy and supply chains.
In order to stay ahead of the curve, businesses will want to do their research. By capitalising on opportunity whilst weighing up and preparing for potential risks, companies can successfully navigate their way through 2025 and beyond.
India Jordan Jones is a final-year undergraduate student at the University of Oxford, reading English Language and Literature. She is interested in a career in consulting or commercial law and passionate about sustainability and energy matters in business.
Image: DALL-E
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