Impact of the second Trump administration on the US regulatory and compliance landscape

February 2025  |  SPECIAL REPORT: CORPORATE FRAUD & CORRUPTION

Financier Worldwide Magazine

February 2025 Issue

The second Trump administration, which will have commenced in late January 2025, will likely build on his first administration, in part by profoundly reshaping the regulatory and compliance landscape in the US.

By prioritising deregulation as a cornerstone of its economic policy, the administration will likely reshape rules and compliance requirements across a multitude of industries, including energy, environment, healthcare and finance. This article explores the regulatory changes to be expected by the second Trump administration, their implications for businesses and the broader effects on compliance culture in the US.

Regulatory philosophy of the first Trump administration

From the outset, the first Trump administration adopted a pro-business stance centred on reducing federal oversight. President Trump’s signature ‘America First’ policy emphasised minimising bureaucratic barriers to encourage domestic economic growth.

The administration’s approach to regulation was guided by two key principles.

First, deregulation and economic growth. The administration aimed to eliminate regulations perceived as hindering economic development. This included rescinding or altering existing rules deemed burdensome to businesses, especially in sectors like manufacturing and energy.

Second, cost-benefit approach. Trump’s executive orders on regulation during the first administration mandated that agencies adopt a cost-benefit analysis to evaluate the necessity of existing and proposed regulations.

During the first Trump administration, the implementation of these principles was manifested in several ways. In the energy and environmental sector, the first administration rolled back various Obama-era policies, particularly those addressing climate change. For example, the administration withdrew the US from the Paris Climate Agreement, signalling a shift away from international commitments to reduce greenhouse gas emissions.

Similarly, the administration narrowed the scope of the Clean Water Act by redefining federal jurisdiction over bodies of water, thereby reducing compliance burdens for certain affected industries. The administration also implemented the Affordable Clean Energy Rule, which gave states greater authority to regulate emissions from coal-fired power plants. Finally, rules requiring oil and gas companies to monitor and limit methane emissions were rolled back.

In the healthcare sector, the first Trump administration focused on reducing regulatory burdens for insurers, hospitals and pharmaceutical companies, thereby reshaping their compliance burdens. For example, the first Trump administration eliminated the individual mandate penalty to have insurance coverage provided by the Affordable Care Act (ACA) passed during the Obama administration.

Similarly, the first administration implemented rules requiring hospitals and insurers to disclose pricing information. These rules increased compliance complexity but aimed to promote market efficiency.

In the financial services sector, there was a similar rollback of regulations first instituted in the wake of the 2008 financial crisis. The first Trump administration aimed to loosen the regulatory grip on banks and financial institutions, encouraging lending and economic expansion. This was accomplished in part by softening key provisions of the Dodd-Frank Act, particularly for small and mid-sized banks. The Economic Growth, Regulatory Relief and Consumer Protection Act raised the asset threshold for enhanced supervision from $50bn to $250bn. Similarly, adjustments were made to what is known as the Volcker Rule to ease restrictions on proprietary trading by financial institutions, allowing banks greater flexibility in managing investments.

In the labour and employment sector, labour policies under the first Trump administration emphasised employer flexibility over worker protections. For example, the Department of Labor (DOL) narrowed the definition of joint employment, reducing the liability of parent companies for labour violations committed by contractors or franchisees. Similarly, the DOL revised the overtime rule, adjusting the salary threshold for overtime pay eligibility.

Key sectors likely to be impacted by regulatory changes

In the various sectors discussed above that witnessed a regulatory impact during the first Trump administration, it is safe to assume that there will be a further narrowing or rollback of regulations during the second. Essentially, if regulations were implemented during the Biden administration, there is a strong possibility that they will be restored to their position during the first Trump administration, at a minimum, if not further retrenched.

In the energy and environmental sectors, for example, one can anticipate a concerted effort by the second Trump administration to explore the rollback of existing regulations that mandated a shift away from the reliance on fossil fuels. In particular, the administration is likely to make it easier to ramp up domestic oil production, perhaps in part by easing the regulatory hurdles for new drilling permits on federally owned lands.

Interestingly, the renewed commitment to fossil fuels may have a related impact on any existing regulations that encouraged the purchase of electric vehicles (although the impact may be muted to an extent by the presence of Elon Musk in the administration). Similarly, the Biden administration’s reversal of the first Trump administration’s withdrawal from the Paris Climate Agreement is likely to come full circle in the second administration.

In the healthcare sector, one could reasonably expect the following steps to be taken by the second Trump administration. First, the administration will likely revisit the repeal of the ACA. Second, the administration will likely renew efforts to lower prescription drug costs, building upon legislation enacted during the first Trump administration intended to prohibit pharmacies from not disclosing information on the pricing and costs of prescriptions. Finally, the second Trump administration is likely to initiate steps (the scope of which remain to be seen) to reform certain public health agencies, including the Food and Drug Administration and Centers for Disease Control.

In the financial sector, the second Trump administration is likely to represent strong support for digital assets and cryptocurrencies. Whereas the Securities and Exchange Commission and Commodity Futures Trading Commission had pursued an aggressive enforcement agenda against digital assets and cryptocurrencies vis-à-vis attempting to regulate them like other securities, the coming Trump administration is likely to be far more open to these assets and cryptocurrencies by easing up significantly on the regulation of them.

Compliance implications for businesses

The first Trump administration’s deregulatory agenda presented mixed challenges and opportunities for businesses: (i) by eliminating or streamlining federal regulations, businesses in affected sectors experienced lower compliance costs, enabling them to allocate resources more efficiently; (ii) as federal oversight diminished, states often stepped in to fill regulatory gaps (for instance, California and other states adopted stricter environmental and labour laws, creating a patchwork of requirements that businesses had to navigate); (iii) the pace and scope of regulatory changes created uncertainty for businesses (frequent reversals and legal challenges to deregulation measures complicated long-term planning); and (iv) while some sectors enjoyed relaxed oversight, others faced heightened scrutiny (for example, the first administration’s focus on immigration enforcement led to stricter compliance expectations for businesses employing foreign workers).

These challenges and opportunities are likely to return with the second Trump administration.

Criticism and challenges

The first Trump administration’s regulatory approach was not without controversy. Critics argued that the emphasis on deregulation often prioritised short-term economic gains over long-term considerations such as environmental sustainability, worker protections and financial stability.

Moreover, the abrupt rollback of certain rules created regulatory whiplash, complicating compliance efforts for businesses operating across multiple jurisdictions.

In terms of environmental and health risks, environmental groups warned that the weakening of pollution standards and climate change policies during the first Trump administration could result in increased health risks and environmental degradation. Those same groups are likely to resurrect their warnings with the likely changes introduced by the second Trump administration.

Regarding legal battles, many regulatory changes faced lawsuits during the first Trump administration, with courts frequently halting or overturning deregulatory actions. These legal challenges created uncertainty for businesses. The likely regulatory changes to come with the second Trump administration are bound to generate lawsuits once more. However, the changes in the makeup of the federal courts, from the district courts through to the Supreme Court, since the first Trump administration will likely create a less receptive environment for successful litigation.

There was also an impact on compliance culture. By de-emphasising enforcement in certain areas, such as workplace safety and environmental compliance, the first Trump administration arguably risked fostering a culture of non-compliance in some industries. With the pending deregulation to come with the second Trump administration, those risks are likely to resurface.

Legacy and repercussions

The regulatory legacy of the second Trump administration, much like the first administration, will continue to influence the US compliance landscape. While the Biden administration sought to restore and expand regulatory oversight, the shifts initiated during the first Trump era and to be built upon in the second Trump administration highlight the dynamic nature of compliance in the US.

First, the Biden administration quickly moved to reverse many Trump-era deregulations of the first Trump administration, particularly in the areas of environmental protection and labour rights. This highlights the cyclical nature of regulatory policy in the US, which will be evidenced by the shift and return during the second Trump administration to the deregulations of the first administration.

Second, businesses that invested in compliance infrastructure during the first Trump administration will be better positioned to navigate the regulatory reversals under the second administration.

Conclusion

The second Trump administration’s regulatory and compliance policies will likely reshape the US economic landscape, offering relief to businesses in the form of reduced compliance costs while generating significant debate about their broader implications. Although the deregulatory agenda may stimulate economic growth in certain sectors, it also will raise concerns in some circles about long-term risks to public health, environmental sustainability and financial stability.

For businesses, the administration’s tenure will underscore the importance of adaptability in compliance strategies. The evolving regulatory environment in the US, shaped by changing political priorities, remains a critical consideration for companies operating domestically and globally. As regulatory frameworks continue to shift, organisations must balance immediate cost savings with proactive efforts to align with evolving expectations from regulators, investors and the public.

 

Manjit Gill is a senior attorney advisor at the Bryn Law Group. He can be contacted on +1 (305) 374 0501 or by email: manjit@brynlaw.com.

© Financier Worldwide

BY

Manjit Gill

Bryn Law Group

©2001-2025 Financier Worldwide Ltd. All rights reserved. Any statements expressed on this website are understood to be general opinions and should not be relied upon as legal, financial or any other form of professional advice. Opinions expressed do not necessarily represent the views of the authors’ current or previous employers, or clients. The publisher, authors and authors' firms are not responsible for any loss third parties may suffer in connection with information or materials presented on this website, or use of any such information or materials by any third parties.