The road ahead

The Republican Party’s control of both the White House and Congress may come as a surprise to the financial services (FS) executives who in our October 2024 Pulse Survey expected a divided government (82% versus 76% for all respondents).

The Republican sweep could open the door to an extensive reversal of the Biden administration’s agenda. President-elect Donald Trump may move quickly to replace the heads of the Consumer Financial Protection Bureau and the SEC and the US Attorney General who leads the Department of Justice.

FS executives may be reassessing their acquisition and divestiture plans in light of what the GOP sweep could mean for antitrust reviews. Federal antitrust regulators will likely be less active under Trump, but that doesn’t mean they’ll be inactive. Some members of the Republican Party are more hawkish on regulation in some sectors than in the past. In our survey, 84% of the FS executives said the election outcome will affect, either somewhat or to a great extent, their company’s business decisions about deals. On the other hand, 72% of FS executives in our survey said President-elect Trump’s proposed 10% universal tariff on imports would significantly hinder their growth.

FS executives also told us they’d remain committed to investing in technology modernization regardless of how the election turned out. Technology will likely remain a perennially big budget item in FS considering its potential efficiency gains through hyperautomation as well as its possible boost to competitiveness, compliance and growth.

The election’s outcome also wasn’t going to change expectations for more rules. Roughly three-quarters of FS executives said they’d anticipate more regulation (76%) and executive orders (72%) no matter who won.

What does this mean for your company? 

• Keep up with tech. The race for technological advantage continues in financial services no matter which party dominates in Washington. Continue exploring modernization — including GenAI/AI use cases — that can scale while improving controls, boosting efficiency and enabling growth across the enterprise.

• Double down on deal strategies. Focus on understanding how changes to interest rates, tax, trade policies and regulatory changes could affect the underlying merits of potential acquisitions or divestitures.

• Continue to focus on regulatory compliance and controls. This includes nonfinancial risks such as fraud and know-your-customer. Politicians of all stripes continue to monitor the sector’s ability to safeguard personal data and prevent theft.

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With President-elect Donald Trump capturing the White House and Republicans securing majorities in both the Senate and the House, Republicans are now in a strong position to push forward several healthcare policy priorities. This consolidation of power may enable the party to implement its vision of creating a more competitive market through fewer regulatory requirements of health industries.

Looking to the future, Trump has the opportunity to zero in on the key priorities detailed during his campaign. Among these priorities is the reorientation of artificial intelligence (AI) oversight toward a model that emphasizes self-regulation and a shift toward reinstating his prior deregulation policies as well as strengthening Medicare by safeguarding its finances. Trump can collaborate with Congress to privatize certain aspects of the Veterans Affairs system and he plans to expand access to primary care and age-in-place services, which enable seniors to remain in their homes. 

Furthermore, Trump has emphasized that states have the freedom to enact their own abortion laws and that his administration will oppose late-term abortions, while also broadening access to IVF and embryo freezing.

He may also prioritize boosting domestic production and confirming that the U S becomes independent in the supply of essential goods such as pharmaceuticals, medical equipment and critical raw materials.

What does this mean for your company? 

• Get ready for less regulation, more market-driven programs. Expect a strong focus on reducing regulatory requirements across the healthcare sector (reduce compliance requirements, advance market-driven programs).

• Anticipate reforms aimed at shifting federal spending on Medicare. These reforms may include more private sector options, block grants for states and eligibility changes.

• Anticipate changes in Medicaid and Medicare funding. These could result in more individuals relying on private insurance, especially if public programs are reduced or eligibility criteria are tightened.

• Expect a push for lower drug prices. Prepare for efforts to lower drug prices through market competition and international price comparisons

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Learn more.

• Watch our Policy on Demand episode on healthcare
• President-elect Donald Trump’s healthcare agenda: deregulation, flexibility and choice, accessibility and national security
• Health Policy and Intelligence Institute

With a second Donald Trump term and a Republican Congress on the horizon, technology, media and telecom (TMT) executives should prepare for protectionist trade measures and shifting US foreign relations, both of which could raise costs for inputs and for customers. In our October 2024 Pulse Survey, 75% of executives said a 10% universal tariff on imports would significantly hinder their growth.   

President-elect Donald Trump will likely push for lower corporate tax rates and tariff increases across the board. His aggressive stance on trade remains a key concern for executives, 74% of whom said the 2024 election outcome would affect their trade decisions either somewhat or to a great extent. The Trump administration plans to impose substantial tariff increases on products from China and Mexico, especially origin vehicles and key goods. Imports from other countries would face standard tariffs of 10% to 20%. The United States-Mexico-Canada Agreement (USMCA) is another area where trade could be reshaped. Companies should consider adjusting their sourcing strategies to mitigate potential disruptions, particularly in the semiconductor space, where national security concerns and tariffs have already led to shifts in investment and manufacturing. 

Executives also see opportunity under Trump, with 53% telling us ahead of the election that they'd increase artificial intelligence (AI) investment if he won. The expanding AI sector stands to benefit from Trump’s deregulation policies and pro-business stance, including his 2019 executive order that launched the American AI Initiative advocating for more federal investment in the technology. 

Regulatory pressures will remain a key challenge for the TMT sector, however. As both parties focus on national security, oversight will likely increase, especially around cybersecurity. The sector should prepare for an increasingly litigious business environment, with antitrust cases and regulatory requirements expected to intensify. While a Trump administration may deprioritize domestic sustainability regulations, Europe’s focus on carbon emissions is likely to push TMT companies to continue investing in sustainability to comply with global standards.

What does this mean for your company? 

• Prepare for intensified regulatory scrutiny and legal risks. Antitrust cases and cybersecurity regulations will remain in the spotlight. Examine your compliance framework and be ready to adapt to an increasingly fragmented regulatory landscape.

• Take advantage of potential tech deregulation to ramp up innovation: Despite heightened overall scrutiny, there’s still room to increase investments in high-growth areas like AI.

• Brace for continued tariffs and supply chain challenges. With Trump's focus on imposing tariffs, now is the time to reevaluate your sourcing strategies. Model various scenarios to assess their effects on your supply chain and costs. Develop strategies to reduce these impacts, utilizing mechanisms like tariff mitigation through programs such as duty drawbacks and free trade zones (FTZs). 

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A Donald Trump presidency and Republican Congress likely means less regulation overall and an attempt to alleviate burdens on the private sector. In his first term, President-elect Trump steered clear of heavy legislative action as he focused on strengthening cybersecurity through military engagement. In fact, there could be momentum to initiate a Department of Defense Cyber Force as a dedicated branch of the armed forces. This is in contrast with how the Biden administration operated, which relied more on tighter regulations and holistic interagency coordination. 

The Trump administration will likely place more emphasis on the national defense strategy. It will also lean more on the courts and limit the powers of regulatory agencies, following the Supreme Court’s repeal of the Chevron doctrine and other recent decisions. 

Harmonization of cyber disclosures had been a key focus under the Biden/Harris administration. For instance, Congress mandated reporting harmonization under the Cyber Incident Reporting for Critical Infrastructure Act of 2022 (CIRCIA). CISA’s proposed rule to implement reporting requirements under CIRCIA established harmonization approaches that are not yet in practice. In contrast, the Trump administration will likely focus on eliminating what it perceives as overly burdensome regulations and limiting which entities qualify as critical infrastructure.

On the national threat landscape, overall focus on threat intelligence sharing was less of a priority under Trump’s first term. It’s unclear exactly how Trump will approach this going forward although threat vulnerability detection and response are likely to be priorities. 

What does this mean for your company?

• Prepare for the same level of regulatory scrutiny. Continue to fortify compliance even if the Trump administration focuses on less regulation. Pulling back on compliance would be premature, as the process to scale back regulations will be slow and won’t immediately result in a reduction. 

• Identify potential business opportunities. At the same time, if there is indeed some form of regulatory relief, it’s worth considering business opportunities that could arise under less regulation. 

• Focus on security. While it’s important to stay the course on compliance efforts, it’s equally important to continue implementing, testing and updating cyber defense and resilience practices, especially with a change in administration.

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• SEC’s cyber disclosure rule
• Bridging the gaps to cyber resilience: The C-suite playbook
• Technology risk: So pervasive, it’s hard to see
• Next Move: Practical insights on regulatory and policy developments in technology
• Cyber reporting for critical infrastructure

Congress will likely prioritize President-elect Donald Trump's tax policy, especially with key individual provisions of the 2017 Tax Cuts and Jobs Act (TCJA) expiring at the end of 2025 and several significant business tax provisions set to change.

Trump has called for making permanent expiring TJCA individual income tax and estate tax provisions. The Republican party platform also calls for maintaining TCJA business provisions and pursuing additional tax cuts. Trump has proposed lowering the 21% corporate income tax rate to 15% for companies producing goods in the US.

He has said that his tax proposals would be offset by the increased economic growth they would generate. He has also proposed increasing federal revenues with a baseline tariff of at least 10% on all foreign-made goods and a 60% tariff on imports from China.

A Republican-controlled Congress makes it possible to apply budget reconciliation procedures and avoid the 60-vote threshold needed in the Senate to advance tax legislation in 2025. A bill must comply with several requirements, including a key prohibition against a reconciliation measure increasing federal deficits outside the period covered by a budget resolution. Senate rules also prohibit using reconciliation to change Social Security laws.

The Republican work product TCJA was enacted in 2017 using budget reconciliation procedures. The December 31, 2025, sunset of individual tax provisions and other scheduled changes to business provisions were adopted to comply with these reconciliation requirements. 

A 2025 tax bill considered under reconciliation would be subject to the same requirements to sunset provisions that increase federal deficits in future decades. That means the TCJA individual provisions could be extended to a new sunset date under reconciliation procedures but could not be made permanent unless their cost is covered by other revenue increases or spending reductions.

Debt and deficit considerations will be top of mind for Congress. As debt concerns mount, the fiscal cliff becomes steeper, leaving Congress to look elsewhere for revenue. A Republican-controlled Congress can be expected to respond to these fiscal concerns. Business leaders will need to evaluate the potential effect of the proposed tax policies on US economic growth and opportunities for US households should the TJCA extend or expire. The Congressional Budget Office (CBO) projects in 2025 the federal budget deficit will exceed $1.9 trillionand interest will be $1 trillion. By contrast, in 2017, when TCJA was enacted, the deficit was $665.7 billion and interest was under $300 billion.  

What does this mean for your company?  

• Scenario plan for US tax changes. With Congress looking for new revenue sources, businesses should model various scenarios. It’s essential to understand how potential shifts could impact cash flow, investments and overall tax liability.  

• Multinationals should be prepared for a higher overall tax rate. Even without US tax increases, multinational companies should be prepared to pay a higher overall tax rate under the new global minimum tax regime created by Pillar Two. Many aspects of the OECD’s global framework became effective on January 1, 2024, but key aspects of the rules remain subject to discussion.  

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How fast and how far will a second Trump administration extend the US protectionist stance established in 2018-19 with tariff hikes on Chinese imports (and left largely unchallenged during the Biden presidency)? These are key considerations for US business. President-elect Donald Trump has placed tax and trade policy — specifically tariffs — at the center of an economic agenda to raise federal revenue, protect American jobs and promote reindustrialization.

How fast? Trump has signaled intentions to use tariffs to jolt US relations with close trade partners and economic competitors alike. He’s offering a carrot-and-stick approach, with a proposed 15% corporate tax rate as an incentive for domestic manufacturing alongside an across-the-board tariff of potentially 10% or more on imports to spur domestic production activities. He has also proposed a 60% tariff on imports from China. 

While the specifics behind Trump’s implementation plan for increasing tariffs were lacking during the campaign, the headline figure — 10% to 20% of all imports, if executed as proposed, which could extend to imports from Mexico in a maquiladora structure — could have significant effects on multinationals. 

How far? By renegotiating NAFTA to create the United States-Mexico-Canada Agreement (USMCA) during his first term with a provision that the agreement must be reviewed in six years, Trump has shown a willingness to revisit long-standing trade arrangements. He’s tied US trade policy to national economic goals. With the USMCA up for review in 2026, the administration is likely to introduce priorities on trade with Canada and Mexico over the next year. Separately, his campaign indicated his aim to continue along some of the Biden administration trade policy trajectory. One example would be raising substantive barriers to importing Chinese electric vehicles.

A president can impose tariffs under many conditions (e.g., unfair trade practices) without Congress. Unified party control could signal fewer challenges or delays in implementing Trump’s foreign trade agenda. Congress nonetheless may push for certain provisions as part of its role in monitoring and oversight of US trade arrangements, for example, during the USMCA review period.

What does this mean for your company? 

• Track the trade winds in your business. Before a new administration introduces its trade agenda, there’s a window for companies to proactively assess the effects of trade policy shifts on the business. Do you have visibility into the origin of supplier components? What happens to your pricing and customer demand forecasts under possibly tougher trade conditions, which could include retaliatory trade measures?  

• Test assumptions behind US-China and US-Mexico-Canada relations. US relations with its largest trading partners continue to evolve, and at a faster pace than is typical for such globally substantive, multifaceted trading arrangements. This creates distinct challenges for US businesses. Mexico is currently the top US trading partner. Canada is second and China third. The direction of relations between China, Mexico and the US will be a key focus over the next year. Businesses will likely develop models that allow them to adapt on short notice. Recent trade actions this year include new US tariffs on Chinese goods, ranging from 25% to 100% that target strategic US industries as well as the cessation of certain tariff relief for maquiladoras, an action likely to increase the cost of finished products coming out of Mexico. As for Canada, the US raised tariffs on its softwood lumber in 2024 and has also requested consultations over Canada’s recently enacted Digital Services Tax (DST). This development could have significant implications for US companies operating in Canada.

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• Recent changes in Mexican tariff regime affect US companies with manufacturing operations in Mexico

The message from executives ahead of the elections was clear: It would be full steam ahead on artificial intelligence (AI), no matter who won. In PwC’s October 2024 Pulse survey, 53% said a Donald Trump victory would lead to increased AI investments. Fifty-two percent said the same about a Kamala Harris victory. In both scenarios, only 5% said AI investments would decrease. Since AI will be a foundational technology, like the internet — intrinsic to everything companies do — it’s bigger than any election. The technology will keep advancing. The value it creates for business will keep multiplying too.

But this election does matter. President-elect Trump and the Republican Party have indicated a lighter touch toward regulating technology, including a promise to repeal President Biden’s executive order on AI. It’s unlikely that a strict regulatory framework, such as the European Union’s AI Act, will emerge from this Congress or administration. A lighter touch might please both technology company leaders and CIOs.

The new administration and Congress could also affect critical elements of the AI supply chain — energy and computational power. The systems that support AI and cloud require vast and growing amounts of electricity. While the Biden administration sought to advance renewable energy initiatives, the Trump administration may take a more hands-off approach. Many AI-related systems also depend on a global supply chain, which could suffer if trade tensions rise. 

What does this mean for your company? 

• Focus on what you control. Government policy will influence how AI and the infrastructure that supports it develop — but your company still controls its destiny. If you make the right choices on AI strategy, workforce, technology, risk and tax issues, you will be prepared for the age of AI. 

• Monitor regulations — and make your voice heard. Keep an eye on potential legislation, executive orders and regulatory decisions and guidance. It is also important to track state-level regulations on AI as state houses have been able to act in the absence of federal action. Whether on your own or as part of an industry group, consider speaking up to help craft regulations to support responsible value creation.  

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A second Trump administration would likely look a lot like the first one. We may see a repeat performance with a strong focus on traditional energy sectors, domestic energy production and a significant rollback of Biden-era climate policies.

During his first term, President-elect Donald Trump eliminated more than 100 environmental regulations, including wetland protections, mercury emission restrictions and carbon dioxide limits. He’s also proposed tariff increases, which would likely impact global supply chains and trade.

What remains to be seen is what will become of the Inflation Reduction Act, a significant legislative achievement of the Biden administration that provides hundreds of billions of dollars in tax incentives for initiatives that reduce greenhouse gas emissions. Repealing the law may stall related capital projects, but that would require support from Republicans in Congress, many of whom have seen the benefits of the law in their home states. Trump may also curb automobile electrification efforts. 

Given this backdrop, regulatory uncertainty looms large. Executives responding to our October 2024 Pulse Survey ranked US trade, economic policy and regulatory oversight among their top policy risks under a Trump presidency. Nearly half (46%) of the respondents said they’d increase sustainability investments if Trump returns to office while 11% say they will decrease investment. Companies may be investing more in sustainability regardless of the regulatory backdrop because it helps meet growing consumer demand for sustainable products, manage environmental risks and comply with sustainability disclosure regulations in key international markets. 

Trump is also expected to challenge environmental, social and governance (ESG) investing. He may revive an executive order making it harder for employers to offer ESG-focused mutual funds in corporate retirement plans.

Regardless of the election outcome, business leaders should continue to consider sustainability risks and opportunities across their operations, products, supply chains and business models to address the threats to their long-term strategies as well as potential areas of growth.

What does this mean for your company? 

• Stay the course: If you have set sustainability targets, stick to them. Also, understand the various state, federal and global rules and regulations pertinent to your business and industry. With all that in mind, embed sustainability into your strategy to identify new revenue opportunities and reduce risk. Then engage employees and other stakeholders by telling a compelling story that links strategy to growth.

• But prepare for regulatory uncertainty: While President Trump and a Republican Congress may try to fast track their agenda, their plans are likely to be met with challenges designed to slow their momentum. But executive orders can come quickly. Conduct policy scenario planning to gauge the impact of tariff increases and other regulatory changes on the business. Develop models to see how the supply chain and costs will be impacted and the key steps needed to manage against each.  

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• Watch our Policy on Demand episode on sustainability
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• What US companies need to know about the EU’s CSRD
• PwC’s checklist for how CFOs can drive sustainability
• Workday ESG transformation for sustainability success

The Republican sweep of the presidency and both houses of Congress means that President-elect Donald Trump will likely have an easier time enacting his agenda. Federal antitrust regulators will probably be less active under Trump as well, but that doesn’t mean they will be completely inactive. Some members of the Republican Party are more hawkish on regulation in some sectors, such as Big Tech, than in the past. The Federal Trade Commission (FTC) may have to adjust its regulatory priorities with a Republican chair, but he or she won’t be able to change the agency’s overall direction right away. Any major changes would likely impact highly regulated sectors and industries, including pharmaceuticals, biotech and air travel. 

The FTC and Justice Department under President Biden had been pursuing cases to crack down on a range of activities they view as anticompetitive as they seek to broaden longstanding antitrust case law. Knowing that regulators are unlikely to continue these efforts long term may spur more dealmaking in the short term.  

Regulators in the departments of Justice, Treasury and Commerce, among others, have gotten more involved in reviewing and restricting international deals. A broad US political consensus that viewed globalization and increasing free trade as generally positive began to unravel in the 2010s. More populist initiatives, including a renewed focus on industrial policy, have added new wrinkles to cross-border M&A. International deals aren’t dead by any means, but they have gotten more complicated.

Trump has proposed higher tariffs on imports. If carried out, this would likely impact the US deals market by altering the cost structure of companies reliant on imported inputs. Higher tariffs increase operating costs, reducing profit margins and making these businesses less attractive to potential buyers. Higher tariffs can increase operating costs, which could reduce profit margins and make businesses less attractive to potential buyers.

What does this mean for your company? 

• Evaluate how potential deal targets might be impacted by Washington’s evolving national security policies. While current policies largely focus on the manufacturing, financial and advanced technology sectors, the government may soon increase its scrutiny on agriculture, chemical, industrial manufacturing, education and healthcare sectors. 

• Keep a close eye on the appointment process for the leadership of key federal agencies that might affect your sector. The background and public statements of nominees should help your company determine how the regulatory approach may shift in the coming months in highly regulated sectors like pharma and biotech.

• Be aware of the impacts of increased regulatory activity on cross-border deals. Build additional time into your M&A timelines to accommodate the potential for lengthier and more detailed reviews. Your integration management office should establish a cross-functional team with responsibility for responding to regulatory requests. Teams on both sides of a deal will need to confirm that the right data is presented to the authorities.

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