Donald Trump's White House comeback makes corporate America struggle to keep up: Report

Corporate America is treading difficult grounds due to rapid policy changes as US President Donald Trump makes his White House comeback for the Trump administration, reported the news portal Financial Times.

Donald Trump's opening moves show that he has plans to use a wider range of reforms to implement his agenda. The week started with more than 100 executive orders and actions after the inauguration ceremony on January 20. 

“The range of policy outcomes is probably as high as it has ever been,” Chris Krueger, strategist at TD Cowen’s Washington research group, told the news portal. “The right and left tails are massive, and all roads lead to Trump,” he said.

Trump's agenda ranges between fossil fuels, expanding the tariffs and deporting undocumented immigrants, among other things, as per the report.

Reforms

Under the new administration, a promise to undo a global minimum tax deal was allegedly brokered through the OECD (Organisation for Economic Co-operation and Development) which came with a threat to double US taxes on ex-pats and companies which choose to pursue it, under a section of law which has never before been used since World War 2, according to the news report. 

“On the one hand, the fact that there was a muscular response was received with broad acclaim” from US multinationals, who have long complained about the deal, Pat Brown, partner in PwC’s tax practice told the news portal. “But one of the questions we got immediately was: ‘My CEO is a citizen of a foreign country who happens to live and work here. Do I need to go tell my CEO his tax rate may double?’”

Trump advisers earlier promised to “flood the zone” with executive actions to an extent to be ahead of the opponents. Consultancies, law firms and investment banks built their plans to monitor the orders and isolate salient points for clients, as per the report.

“Where there’s a wealth of information, there’s often a poverty of attention,” Kevin Madden, a Republican strategist at consultancy Penta Group told the news portal. “The challenge for corporate leaders is prioritising all this information and activity.” 

Energy Sector

Donald Trump invoked emergency powers to clear regulatory obstacles to fossil fuel projects, shocking everyone in the clean energy industry. This move showed how the administration can undermine funding apparently mandated by Congress, alleged the news portal.

William Oplinger, chief executive of US aluminium producer Alcoa, told the news portal that his company’s two domestic smelters could be at risk if tax credits were cut.

The support “has allowed those facilities to continue operating in the current environment,” he said, adding that the company would identify their long-term viability when it was clear what any IRA changes would mean and if there were additional impacts from tariffs, as per the report. 

Wind power suffered particularly from orders freezing leasing approvals and triggering an immediate review of permitting practices, which cover existing projects.

Companies are racing to appoint Republican-linked lobbying firms they hope to have the ear of the administration, as per the agency report.

Donald Trump's energy orders are a road map proposed last summer by the American Petroleum Institute (API), a fossil fuel lobbying group, alleged the report.

“A lot of these executive orders are directing agencies to do things, but many of these agencies don’t even have secretaries now,” Mike Sommers, API chief executive told the news portal. “What we are trying to do is fill in the blanks for the new department heads, so they know precisely how to implement the president’s vision.” 

Tariffs Front

Donald Trump did not fulfil his promise yet to impose new tariffs on US trading partners on “day one” but a memo ordered departmental reviews of the current trade practices, with a deadline of April 1, 2025, according to the news report.

The US President also indicated that he could hit Mexico, Canada and China with tariffs on February 1.

Evan Giesemann, an adviser on tax and trade at EY, told clients in webinar “While nothing with President Trump is final until it is implemented . . . I can’t underscore enough how wide a net this memo casts, showing how serious he is about making structural changes to our trade policies and fairly quickly.”

Carole Streicher, deal advisory leader for KPMG in the US, suspected that concern was behind the spike this week in incoming calls from private equity-owned companies about starting a sale process. 

“Many are sitting on the starting line ready to have the gun go off,” she told the news portal. “The discussion now is whether there is a short window for the next three to six months where interest rates are going to be at their current level and we need to transact before that window closes.”

These actions can likely accelerate companies to tweak their diversity, equity and inclusion programmes.

Trump ordered government agencies to draw lists of “the most egregious and discriminatory DEI practitioners in each sector of concern” and propose “up to nine potential civil compliance investigations” of public companies and other organisations, as per the report.

“They’re bullying American employers into backing away from what are otherwise fully lawful efforts,” Jenny Yang, former commissioner at the Equal Employment Opportunity Commission, now partner at the consultancy Working Ideal told the news portal.

Many companies have examined their DEI policies to check they were watertight, but law firms were sending urgent bulletins to clients offering legal audits, said Yang.

TD Cowen’s Krueger told the news portal this week’s executive actions had come “at record speed and with record breadth”, with much still to digest and many questions unanswered. “But at least now pre-season is over,” he said. “Now you can start putting pen to paper on policy,” according to the news report.