Tom McGrath, Partner & U.S. Global Practice Head, New York
On the eve of the election, some commentators predicted a complete rollback of Biden antitrust policy, and a greenlight for M&A activity. That’s partly true, but it depends on the sector. Under the prior Trump administration, and in comments from Republican Congressmen and JD Vance, it seems more likely that Big Tech will remain under scrutiny, even without Lina Khan at the helm of the FTC. Big pharma may fare little better.
On the other hand, we would expect that more big deals will get done with remedies (divestitures) that address any problematic overlaps and avoid costly litigation. For financial sponsors, we would expect the FTC and DOJ to focus less on roll-up strategies and minority stakes across competitors.
And, with Republican majorities likely in both the House and Senate, we can expect continued congressional investigations into “woke” cartels concerning climate and censorship topics, among others.
Jon Gafni, Senior Counsel & Head of U.S. Foreign Investment, Washington, D.C.
It’s unlikely that Trump would reverse the current outbound foreign investment program. It’s more likely that it would be expanded, either through a regulatory process or in concert with a Congressional effort. Executive Order 14105, through which President Biden initiated the program about to go into effect, itself requires annual assessments of the program’s effectiveness and consideration of possible changes to the program or other related government regulatory processes. When President Biden issued the order in August 2023, there had already been legislative proposals including more industrial sectors or creating a true “reverse CFIUS” by requiring U.S. government reviews — versus just notification or prohibition — of outbound transactions. It’s possible, with the changes at the White House and Congress, that expansion of the program could be accelerated through administrative or legislative means. Whether the changes are initiated by the incoming President or Congress, implementation would require a new rulemaking process that would take at least several months. As a result, any changes would not take place for quite some time.
We expect a shift in the balance of the CFIUS member agencies. CFIUS includes a number of agencies with a security-focused portfolio as well as others that tend to be more in favor of trade and foreign investment. During the first Trump administration, the key “trade” agencies at CFIUS were led by China hawks, making it far more difficult for investments led from China to avoid adverse outcomes. The rebalancing with respect to China did not snap back fully during the Biden administration, but a Trump-appointed CFIUS could be expected to return to taking a consistently hostile view toward investments from China. Separately, it would not be surprising to see more situations in which the President and members of his administration publicly get out in front of the CFIUS process, as the Trump administration did with TikTok four years ago and the Biden administration did with Nippon Steel-U.S. Steel.
Danelle Le Cren, Partner & Head of U.S. Banking Group, New York
Under Trump's presidency, debt markets will likely experience heightened activity due to a more accommodating regulatory and business-friendly environment, facilitating more debt-funded M&A and private equity activity. Continued interest rate cuts, strong investor demand for debt, and competition between syndicated lending and private credit could lower borrowing costs, keeping money flowing in the loan markets. However, policies related to tariffs and immigration, amongst other things, could potentially have a negative impact on lending conditions.
Jeff Cohen, Capital Markets Partner, New York
The markets have clearly reacted very positively to the election, and there is a general sense that both regulatory burdens and tax burdens will go down rapidly over the next couple years. Market reaction has a significant impact on market participants and deal activity, and we are seeing people more motivated towards equity capital markets, and to some extent toward M&A, following the results. Good markets spur deals, and regulators are likely to focus on encouraging greater volumes of capital markets activity.
David Lucking, Derivatives & Financial Markets Partner, New York
For the derivatives industry, all eyes will be on who takes the helm at the CFTC and the SEC, as well as what happens with respect to Basel III Endgame. An incoming President cannot remove the existing Chairs from office without cause, however it is common for Chairs who have been appointed by an opposite administration to resign. We know from statements made during the campaign that the President-elect may seek to replace the current SEC Chair with someone who is more favorable to crypto and innovation and less focused on regulation. We may also see allowances be made with respect to the implementation of recent rulemakings, such as the SEC’s US Treasury clearing requirement, where more time for implementation might be made available. Derivatives market participants will be watching regulatory developments and market reactions closely (such as the impact on the stock market, interest rates, FX rates, energy prices etc.) and the change in administration will likely fuel more short terms trading activity in the derivatives markets as market participants seek to take advantage of positive economic reactions to the news of the election outcome.
Derek Poon, Structured Finance Partner, New York
In the securitization and structured finance industry, a big focus will be on who will head the SEC and the CFPB in the new administration. Market participants expect that there will be a scaling back of various initiatives and priorities of the previous administration. For the CFPB, this may mean stepping back from its attempts to enforce its authority over servicers and trustees of securitization vehicles, which has been a topic of concern in the industry. The market will also be focused on revisions to the Basel III endgame proposal, though the results may take some time to be fully visible. The new administration’s policies on clean energy, including any changes to tax incentives under the Inflation Reduction Act, may also affect certain renewables securitization structures and/or products that depend on such incentives, though the extent of changes remains to be seen. On the digital infrastructure front, any de-prioritization of federal oversight on regulations applicable to data centers may further boost demand and financings of data centers, including data center securitizations.
Ron Erlichman, Partner and Co-Head of Energy & Infrastructure in the Americas, New York
There's a long list of things that the new administration says it is going to accomplish right off the bat, and most recently the words you're hearing with respect to our industry is “energy independence.” I associate that with less regulation and more opportunity to extract oil and gas. Whether that also means looking at changing the Inflation Reduction Act tax credits for renewables projects going forward, that remains to be seen. If the new administration tries to repeal those credits, they'll likely be a bit surprised by the number of people from both sides that would object.
The energy transition the United States has been a very long and slow burn. We’ve had some peaks, and some very, very short valleys — offshore wind during the last Trump administration and solar panels during the Biden administration — but the transition isn’t driven entirely by tax credits. Technology companies, consumer product companies, and a significant portion of society at large are the driving force behind the energy transition — not the law. At a baseline level, renewables will continue.
Mike Rodgers, Tax and Energy & Infrastructure Partner, Washington, D.C.
A new Trump administration, coupled with Republican majorities (albeit slim ones) in both houses of Congress, spells uncertainty for federal tax incentives designed to further clean energy and energy transition, including those featured under the Inflation Reduction Act (IRA). Nonetheless, with the vast majority of the nearly half trillion dollars in IRA-associated investment and job creation thus far having occurred in traditionally Republican and swing-state jurisdictions, a broad repeal of the IRA seems very unlikely.
What seems more likely is that portions of the IRA relevant to select industries could be surgically targeted as a means to help fund a renewal of the provisions of Trump’s 2017 Tax Cuts and Jobs Act (TCJA) that are set to expire within the next year. Current estimates suggest that an extension of such provisions for another ten years could cost upwards of $4 trillion, and the money would need to come from somewhere. That said, even a full-scale renewal of the TCJA could prove trickier than anticipated, given that slim Congressional Republican majorities will tend to require unanimity, which would in turn require delicate balancing of different interests among such Congressional Republicans.
Notwithstanding the uncertainty, perhaps counterintuitively, market sentiment thus far seems to echo a resilient status quo, with existing projects continuing as expected, and an overarching sense that incredibly popular tax credit transfer deals are here to stay.
Lauren Bachtel, Senior Energy & Infrastructure Counsel, New York
Under the Trump administration, the energy sector may experience mass deregulation, streamlining of permitting, and an emphasis on traditional energy sectors, such as oil and gas. Renewable energy is not going away, but the focus may shift to more moderate renewable energy sources, such as LNG and nuclear. Regarding regulations, we will have to wait and see if the incoming Trump administration uses the same two-step repeal and replace process as it did last time.
Don Waack, Financial Regulation Partner, Washington, D.C.
Although we expect that the election of President Trump will have significant consequences for U.S. financial regulation, many of the key issues the new administration will face do not necessarily break down along partisan lines. This, coupled with some of the more populist aspects of President Trump’s campaign, suggests that the administration’s approach to financial regulation may well be more nuanced than some might otherwise expect from an incoming Republican administration with majority support in both the Senate and the House.
On the one hand, we do anticipate that President Trump and his key agency appointees will be broadly “pro-business” and likely more inclined toward deregulation than their immediate predecessors. So, for example, we may well see the federal bank regulators retreat from recent efforts to impose heightened scrutiny on bank M&A transactions and from some of the more restrictive Biden-era policies against banks engaging in crypto and digital asset activities. On the other hand, President Trump himself has proposed measures like a 10% cap on credit card interest rates during the campaign and is likely to maintain, if not amplify, federal scrutiny of Big Tech — which, in the bank space, is likely to include continued focus on existing supervisory priorities like bank-fintech partnerships and BaaS. In short, the Trump administration’s approach to key regulatory policy issues may be quite fluid and situation-specific, presenting both challenges and potential opportunities for industry participants.
It is important to remember that although most agency heads can be replaced and new supervisory policies and enforcement priorities adopted in relatively short order (assuming quick confirmation processes from a Republican-controlled Senate), actual rulemaking will take substantially longer and ultimately must be carried out by nonpolitical agency staff. Among the most significant of these in the financial sector is implementation of the Basel III Endgame package — already years in development, and which the U.S. federal bank regulators acknowledged in recent months must be completely revamped and reproposed. With the incoming Trump administration effecting changes in the leadership at both the OCC and FDIC (and, potentially, installing a new vice chair for supervision at the Federal Reserve Board as well), we expect that this initiative will, at a minimum, be substantially delayed.
Shruti Chopra, TMT & Intellectual Property Counsel, New York
Under the new administration, we will continue to see efforts to safeguard intellectual property rights and maintain the United States’ position as a leader in innovation. We can expect stronger safeguards and more favorable policies for patent owners and licensors, including measures such as expediting the patent examination process to encourage innovation and investment. Policies may increasingly favor and reward innovators, ensuring that the environment is conducive to new developments and technological advancements.
The Trump administration is expected to significantly influence AI policy, largely by easing restrictions previously established by the Biden administration. It will be interesting to see whether this new administration takes a stance on issues related to generative AI and copyright law. Additionally, there’s a strong possibility that Trump will address content moderation policies, reflecting a long-standing personal concern. Changes in this area could have broad implications for social media platforms and the regulation of online information. Overall, these changes could reshape key aspects of intellectual property and digital policy in the coming years.
Jason Behrens, Partner and Co-Head of U.S. Investment Funds, New York
When it comes to private investment funds, the incoming Trump administration raises two key questions. First, who will be tapped to lead the SEC? A change in leadership at the SEC, which is expected, would be likely to result in a more permissive commercial environment. We expect there to be less focus on regulation and enforcement, and more focus on encouraging new means of capital formation. As is always the case, a shifting landscape will result in both winners and losers. For example, in the coming years, it’s likely that the U.S. market will see an increasing number and a wide range of crypto and energy-focused funds, and fewer impact/ESG-focused funds. Second, what impact will Trump’s policies with respect to immigration, trade and tax reform have on the economy? Since Trump’s election, public markets have signaled bullish investor sentiment with respect to macro-economic conditions. Investors appear to believe that the new administration’s policies will result in increased opportunities for favorable portfolio investment exits and an improved fundraising environment.
David Miller, Partner and Co-Head of U.S. Investment Funds, New York
There is uncertainty regarding how the private equity M&A market and associated acquisition and exit opportunities for private investment funds will fair in a second Trump term touting heavy tariffs. On one hand, the market is expecting a more favorable business environment generally and therefore more deal opportunities, but on the other hand, heavy tariffs place upward pressure on inflation which could negatively impact dealmaking and related financing.
Doug Davison, Litigation, Arbitration & Investigations Partner, New York
We expect the focus areas of the SEC and DOJ under a new Trump administration to shift in a number of ways. For example, the SEC’s approach involving crypto, cyber, AI and ESG will be different. Whether that means the SEC and other regulators will be open to innovation and dialogue rather than rulemaking and enforcement remains to be seen, but we think those industries and others subject to SEC and other regulatory scrutiny are less likely to be defending themselves against novel legal theories or overly aggressive sanctions. Still, cases involving substantial investor losses, significant harm or other policy areas important to the new administration will continue, just as we observed in the prior Trump administration. DOJ in particular is likely to emphasize cases involving national security, such as economic sanctions and export controls, even more than it has. We also expect FCPA concerns to remain, and to see fewer demands for corporate guilty pleas and independent compliance monitors. In terms of SEC rulemaking, President Trump promised to eliminate 10 regulations for every new one, so it is safe to assume that the frenzied rulemaking will come to an end. Last, in view of recent Supreme Court decisions, we expect we will see more corporate challenges to rulemaking and agency action.
Yelena Nersesyan, Corporate Counsel, Real Estate, New York
Industry players expect that with the election outcome settled and interest rates lowered by the Federal Reserve, the real estate sector will benefit from decreased uncertainty. We also expect to see an increase in the demand for industrial real estate as businesses aim to expand their domestic production and distribution operations as a result of Trump’s past, and potentially future trade and manufacturing policies. In response to the housing crisis, Trump has suggested reducing regulations and permit requirements, which homebuilders argue inflate new home costs unnecessarily. While the industry players agree that simplifying these regulations could encourage more robust home construction and lower expenses, the extent of price reductions Trump envisions remains to be seen.
Michael Torkin, Partner and Head of U.S. Capital Solutions & Special Situations, New York
Now that the Presidential election is over — with a clear pro-business mandate to be ushered in under a Trump administration, a significant degree of certainty has been infused into the market, which creates a favorable environment for many U.S. businesses — including financially stressed businesses — to access the capital markets. This stability presents an opportunity for firms to strategically plan and execute long-term financial strategies with confidence.
One key area of focus for the new administration will be trade and the imposition of tariffs and duties, which could disproportionately affect already stressed businesses reliant on foreign imports from targeted jurisdictions
Ieuan Jolly, Partner and Chair of U.S. TMT & Data Solutions Practice, New York
The Trump administration’s policies are likely to have a significant impact on AI innovation within the tech sector, primarily through a deregulatory approach aimed at fostering rapid technological advancement. Trump has indicated intentions to repeal President Biden’s executive order on AI, which established safety and ethical standards, arguing that such regulations hinder innovation. This shift could create a more flexible regulatory environment, encouraging tech companies to accelerate their AI development efforts without the constraints of stringent oversight. However, this approach may also lead to inconsistencies in safety and compliance standards across states, potentially complicating the landscape for businesses. Additionally, Trump’s administration is expected to emphasize national security by regulating AI exports and ensuring that advanced technologies do not fall into the hands of adversaries like China. Trump’s proposed tariffs on imports, particularly from China, could impact the capital available for AI research and development as well as impacting supply chains for companies reliant on imported components. While this focus on competition may be intended to drive innovation, it also raises concerns about the implications for international collaboration in AI regulation and ethical governance in AI development.
Josh Klayman, U.S. Head of Fintech and Head of Blockchain and Digital Assets, New York
With Republicans gaining control of the U.S. Presidency and executive branch, in addition to dominance in both the U.S. Senate and the House of Representatives, the new Trump administration is poised to have a significant impact on the Tech industry. Such political alignment across government branches may speed the passage of tech-focused bills that have been stalled along partisan lines, concerning, among others, topics like artificial intelligence — including deepfakes, digital assets, data privacy and antitrust. President-elect Trump’s previous vow to repeal President Biden’s sweeping AI executive order, including on freedom of speech grounds, poses the possibility of a significant shift in U.S. regulators’ “North Star” for AI regulation. In addition, Trump’s public promise to make the U.S. the “crypto capital of the world” signals a boon for the digital asset space — including DeFi, with government headwinds ushering-in major players, from TradFi, banks and other household names, who may have been waiting on the sidelines. Beyond crypto, we also expect increased activity in digital financial market infrastructure, tokenized traditional securities and digital asset-focused derivatives. For Big Tech, fueled by figures like JD Vance, who has voiced support for Federal Trade Commission Chair Lina Khan’s efforts to break-up large tech companies, this may mean sustained — or even increased — regulatory oversight and moves aimed to increase competition and limit centralized tech dominance. Trump’s (re)election and promise to raise tariffs on Chinese imports is likely to further strain U.S.-China relations and could create challenges for tech players that rely heavily on Chinese supply chains. More broadly, we expect the Trump/Vance administration — and influence by tech-savvy advisors like Elon Musk — to mark a return to deal-making and investment activity across the Tech sector.
Under the Trump administration, the digital asset space expects a more favorable regulatory environment, speeding mainstream adoption and investment. President-elect Trump’s support for the industry, including ambitions to make the U.S. a global crypto leader, is likely to power legislative efforts to address long-standing legal questions and challenges. While passing new laws without a filibuster-proof Senate remains complex, market players are optimistic about prospects for new federal legislation, including concerning stablecoin and market structure.
Amanda Gabai, Tax Counsel, New York
Tax policy under the Trump administration depends largely upon whether the Republicans take control of the House, and how wide or thin their majorities might be. With an expected 52 to 55-person majority in the Senate, the Republican party will not have the 60 Senators needed for a filibuster-proof majority, but can still potentially pass tax reform with a simple majority through the budget reconciliation process. Using the reconciliation process requires any legislation to be budget-neutral after 10-years, so any cuts would likely have to sunset after a certain number of years, and/or be funded by offsetting revenue increases.
If the new administration is able to enact tax reform, Trump has suggested extending his signature Tax Cuts and Jobs Act (TCJA) provisions past the current sunset date of December 31, 2025, but reducing the U.S. corporate income tax rate to 20% (from 21%), with a special 15% rate for U.S. manufacturers. He would also restore 100% bonus depreciation, 100% research & development expensing, as well as the more generous EBITDA-based interest deduction limitation. He has suggested paying for these tax cuts in part through tariffs on imports.
The Trump campaign does not currently plan to enact any international tax reform to address Pillar II. In practice, this means that foreign-parented multinationals whose home countries have enacted an Income Inclusion Rule (IIR) may be required to pay “top up” taxes in their home countries on account of their U.S. subsidiaries being tax resident in a jurisdiction (the U.S.) that does not have a qualifying Undertaxed Profits Rule (UTPR). Further, no reform to the Base Erosion Anti-Abuse Tax (the BEAT) is expected, meaning that deductible payments from U.S. entities to related foreign parties will continue to be treated as “base erosion payments” potentially subject to the BEAT, regardless of whether the foreign party to whom the payment is made is in fact subject to a higher tax rate than the U.S. rate.