Countdown to change

Divided government with a Trump White House: What it means for business

While key economic indicators provide some optimism about the economic outlook, forecasts and US macroeconomic data have been all over the map in the months leading up to the election. Some worries about the labor market eased after September’s jobs report came in higher than expected. But job growth declined sharply in October due to the two hurricanes and a labor strike. This economic volatility and a tense geopolitical landscape add to the uncertainty around the election.  

The results of this election could mean a limit on major change coming out of Washington. Should Donald Trump win while Democrats take control of the House, Trump would face steep barriers to the most ambitious parts of his agenda — meaning fewer large-scale legislative changes to the business environment.  

This would not be a major surprise to business leaders. In our October 2024 Pulse Survey, 76% of the US executives responding agreed or strongly agreed that there would be a divided government after the election. In addition, 77% expected an increase in executive orders and 75% expected both more regulation and litigation, regardless of who won the election.

Trump’s promises of tax cuts during the campaign might be difficult to push through with a Democratic-controlled House. But trade policy will likely impact US businesses, depending on the degree to which President Trump follows through on his campaign promises regarding tariffs. Widescale tariffs can be issued through executive order, though they would almost certainly be challenged in court. Trump campaigned for universal tariffs of at least 10%. If that were to pass, 75% of executives in our survey agree or strongly agree that a 10% universal tariff on imports (as proposed by Trump) would significantly hinder their growth.

Other economic policies that might come out of a Trump White House include increasing energy production through expanded drilling, reducing regulation and scaling back renewable energy policies. Trump would have to reach across the aisle to secure moderate votes to pass any major legislation.

Stay tuned for updates on what the election outcome means for the regulatory landscape, including for financial services, healthcare and tech, media and telecom companies, as well as cybersecurity, tax legislation, trade and tariffs, artificial intelligence, climate and deals — and what executives can do to prepare for the new administration.