Following the U.S. presidential election on November 5, former President Donald Trump was reelected to his second four-year term in office. In addition, the Republican Party has also managed to retake control of the Senate and has garnered enough seats to maintain its majority in the House of Representatives. Republican victories in both houses of Congress will provide a pathway for Trump to pass many of his policies, although an expected slim majority in the House of Representatives could present some pushback on some policies.
With the results of the presidential election solidified, Trump has already begun preparing his transition team to enter the White House after his inauguration on January 20. Trump has begun selecting candidates for key posts within his administration, including Chief of Staff, National Security Adviser, and Secretary of Homeland Security. Trump has also nominated current Florida Senator Marco Rubio for Secretary of State.
As a Senator, Rubio is known for taking a tough stance on foreign policy conflicts with China, Iran, Cuba, and Venezuela, and was a co-sponsor of the Uyghur Forced Labor Prevention Act (UFLPA). Additionally, Trump has announced that immigration will be a priority on his first day in office, with planned actions including expanding the number of illegal immigrants who can be deported, restarting construction on the U.S.-Mexico border wall, and sending troops to provide additional security along the U.S.-Mexico border.
Trump tariff proposals raise concerns over imported product availability
Concerns remain that Trump’s proposed tariffs on foreign goods could increase costs for manufacturers. On the campaign trail, Trump proposed a global baseline import tariff of 10-20% and several additional tariffs, including a 60% tariff on all imports from China, a 100% tariff on goods from countries that seek to de-dollarize, and a 100-200% tariff on cars imported from Mexico. The latter of these proposals would likely require changes to the United States-Mexico-Canada (USMCA) free trade agreement, which is up for renegotiation in 2026.
Although the specific tariff rates announced in his campaign are likely to change pending negotiations with trade partners, many industries have raised concerns that an increase in global tariffs will inevitably lead to supply chain disruptions and sourcing challenges. Companies including Airbus and Stanley Black & Decker have already announced plans to increase prices if tariffs are enacted.
The automotive and metal manufacturing industries could be particularly affected by U.S.-Europe trade tensions, where increased tariffs and related countermeasures could limit the export of finished vehicles between countries and threaten the Global Arrangement on Sustainable Steel and Aluminum, which is currently under negotiation. Additionally, Trump’s proposed 60% tariff on goods from China could inspire retaliatory trade measures from Beijing, which could impose its own controls on key agricultural exports from the U.S. such as soybean and corn. Chinese exports to the U.S. in Chinese-dominated industries such as finished copper products could also be affected.
Trump expected to reverse course on climate measures
Additionally, Trump has made reversing Biden administration policies related to climate change key to his campaign. Since his first term in office, Trump has been downsizing the U.S. Environmental Protection Agency (EPA) and rolling back environmental regulations to encourage manufacturing growth. Trump has announced his choice of former New York Representative Lee Zeldin to head the agency, who is perceived as being critical of the EPA’s regulatory power.
One of Trump’s climate priorities will be to provide extensive support to the U.S. oil and gas industry by limiting regulations, approving new project proposals in the pipeline, and opening more federal land to oil and gas production. While this proposal has gained substantial support from many companies in the industry, some have raised concerns that U.S. overproduction could lower oil and gas prices to unsustainable levels in the long-term.
Additionally, Trump has been a major critic of the Biden administration’s support for electric vehicles (EV) and could roll back vehicle emissions rules as well as support for EV infrastructure funded by Biden’s Inflation Reduction Act. Reactions from these companies have been mixed, since the policy change could create regulatory uncertainty for companies that have already begun transitioning their factory infrastructure for electric vehicle production. It is also unclear how Trump’s relationship with Tesla CEO Elon Musk, who has been appointed to lead government efficiency efforts in the new administration, will impact the president elect’s support for the industry.
Everstream clients are receiving more detailed insights and recommendations about this risk.
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