The results of the recent presidential election signal a pivotal moment for U.S. economic and energy policy, shaping the next four years with potential sweeping reforms. The economy ranked as the most important issue for registered voters, with 52% rating it as extremely important.
With a strong Republican majority and President Trump back in office, the administration is poised to execute its vision swiftly, reshaping tax codes, energy policies, and international trade agreements. These changes carry significant implications for businesses, individuals, and national security. A10 Associates has examined the expected shifts, and today we are providing an analysis and next steps for organizations to navigate the evolving landscape effectively.
Whether you’re already a client or considering working with us, our team is prepared to offer customized insights to align with your organization’s goals.
Focus on the Economy
Tax Reform: Key Changes and Implications
Tax reform is a cornerstone of the new administration’s economic agenda, reflecting its commitment to incentivizing growth, reducing regulation, and stimulating investment. However, the scale of the proposed reforms raises questions about the sustainability of federal revenues.
The first 100 days will see Republicans extend tax cuts through reconciliation, but this will come at a projected cost of $3 trillion in lost federal revenue by 2025. To address this, the administration plans to repeal key provisions of the Inflation Reduction Act (IRA), targeting clean energy tax credits to offset these losses. Among the most significant cuts are the Consumer EV Tax Credit and various clean energy investment and production credits, potentially eliminating over $220 billion in federal support for renewables.
Meanwhile, there is an effort to recalibrate tax incentives. Proposed replacements for clean energy credits include tax breaks for critical mineral and material production, signaling a shift in focus toward energy security and supply chain independence. These moves reflect a broader strategy to prioritize traditional energy sources and critical infrastructure over green initiatives.
Economic Growth vs. Sustainability
While the administration’s tax reforms aim to encourage economic activity, the elimination of clean energy credits could disrupt industries reliant on government incentives. Businesses should prepare for recalibrations, particularly in sectors like electric vehicles, renewable energy, and sustainable fuels.
Specific Tax Provisions in Discussion
Sweeping Adjustments to Tax Policies
The administration is building on the foundation of the 2017 tax reforms with a suite of measures designed to benefit corporations, individuals, and families. These could include lowering the corporate tax rate to 15%, reinstating 100% bonus depreciation, and introducing expanded deductions for pass-through entities under Section 199A.
The proposed changes for individuals include increasing the Child Tax Credit, making car loan interest and Social Security payments tax-exempt, and raising standard deductions for all taxpayers. These adjustments aim to alleviate financial burdens and promote consumer spending, particularly among middle—and lower-income families.
Implications for Businesses
For businesses, the proposed reinstatement of the Domestic Production Activities Deduction and enhanced R&D tax incentives signal a renewed focus on domestic manufacturing and innovation. However, the administration’s plan to end Obamacare subsidies and remove the SALT cap will have mixed impacts, creating opportunities for some while imposing challenges on others.
Tariffs and Foreign Policy
Tariffs as Tools for Economic Strategy
Tariffs are poised to take center stage in the administration’s economic strategy, serving a dual purpose: offsetting tax revenue losses and advancing foreign policy goals. The focus on increasing tariffs reflects a desire to reshape global trade dynamics, particularly with China.
The administration plans to raise Section 301 tariffs on Chinese goods to 60% while introducing a universal 20% tariff on all imports. This approach aims to curb reliance on foreign manufacturing and incentivize domestic production. Additionally, there will be a crackdown on goods from China that are routed through Mexico or assembled in the U.S. to skirt tariffs. These measures may also be leveraged to influence immigration policies with Mexico and Canada through renewed trade agreements.
Trade Wars and Domestic Opportunities
The proposed tariffs will undoubtedly create challenges for import-dependent industries, particularly in manufacturing and technology. However, they also present opportunities for U.S.-based producers to gain a competitive edge. Businesses must assess their supply chains and explore domestic alternatives to mitigate risks associated with these tariff increases.
Energy Independence for National Security
Reclaiming Energy Leadership
Energy independence is a critical pillar of the administration’s national security strategy. The focus is on boosting domestic oil and gas production, with promises to halve energy prices and reduce reliance on foreign sources. By ramping up fossil fuel production and deregulating the energy sector, the administration aims to secure a stable and affordable energy supply for the nation.
A pro-natural gas stance will drive investments in transmission and microgrid projects to strengthen the national grid. Simultaneously, the Department of Energy will prioritize partnerships with private corporations to accelerate innovation in power management and infrastructure resilience.
Renewables and Localized Solutions
While large-scale renewable energy projects face cutbacks, localized initiatives such as community-based solar projects and Level 2 EV charging infrastructure remain on the agenda. Nuclear microreactors and investments in energy efficiency technologies will also play a significant role in balancing energy needs with sustainability goals.
Streamlined Permitting for Rapid Development
Doug Burgum, leading the Department of the Interior, will oversee reforms to speed up permitting processes, ensuring quicker access to federal funding and faster project completion. These measures will support both traditional and renewable energy projects, albeit with a stronger emphasis on fossil fuels.
Critical Minerals and National Security
The Strategic Importance of Critical Minerals
Critical minerals have emerged as a linchpin of national security and economic policy. The administration plans to establish a national stockpile of critical minerals to reduce dependence on foreign suppliers, particularly China. This initiative is aligned with broader defense strategies, including requirements for U.S.-sourced materials in Department of Defense technologies.
Deregulation and Domestic Sourcing
To support this shift, the administration will implement significant mining deregulations and permitting reforms. These changes aim to accelerate the production of essential materials such as rare earth elements, lithium, and cobalt, which are vital for defense, energy, and technology sectors. Anti-dumping tariffs on Chinese imports will further incentivize domestic production.
Technology and Manufacturing Realignment
Replacing the CHIPS Act, the administration will introduce a new funding program focused on artificial intelligence and advanced manufacturing. This move signals a pivot toward cutting-edge technologies and underscores the need for a robust domestic supply chain to support future innovations.
Prepare for 2025 Today
The post-election policy landscape under the Trump administration promises sweeping changes across tax, trade, energy, and critical mineral policies. These shifts represent both challenges and opportunities for businesses, demanding strategic planning and adaptability. As the nation transitions into this new era, understanding and navigating these policies will be critical for success.
If you’re a client, reach out to discuss how these changes impact your organization. Not yet a client? Let’s start the conversation and explore strategies tailored to your needs.
10 Predictions Post-Election
- Chinese Companies on the Offensive: Expect aggressive moves in technology and trade.
- Elon Musk and Trump Dynamics: Watch for high-profile collaborations or tensions.
- National Republican Response: Senate and House leadership will shape policy direction.
- Adjustments in Right-to-Work Laws: Anticipate state-level changes favoring employers.
- Battle with the Federal Reserve: Potential clashes over monetary policy.
- Democratic Leadership Transition: Who emerges as the new opposition leader?
- Increased Defense Spending: Focused on critical minerals and national security.
- Energy Infrastructure Overhaul: New priorities for FEMA and DOE.
- International Trade Realignments: Shifting dynamics with allies and adversaries.
- Technology Funding Shifts: From CHIPS to AI and advanced manufacturing.
