What’s Next from President Trump and US Congress for International Companies

Senator Dorgan served in the United States Senate as a Democrat from North Dakota for 18 years and also in the United States House of Representatives for 12 years starting in 1981, as an active member of  the Senate Appropriations, Energy, and Commerce Committees and House Ways and Means Committee. Dan served as the Legislative Director and Deputy Chief of Staff to Senator Arlen Specter (R-PA) and a presidentially appointed Member of the Board of Directors at the Export-Import Bank of the United States. 
 
Click here to listen to the audio recording of the webinar.
 
The two speakers discussed several policy changes initiated by the Trump Administration and Congress, including their potential effects upon foreign companies. Key takeaways from the discussion include: 

Trade

• Transatlantic Trade and Investment Partnership is unlikely to move forward at this point, given the Administration’s attention on bilateral trade agreements with the UK and other countries.
• The Administration’s focus on preserving American jobs will force foreign companies to adjust their messaging when dealing with policymakers in Washington and increased “Buy American” sentiments.
• Companies should get involved in NAFTA renegotiation discussions prior to the announcement of any proposed change. By the time you are reading about a change in this kind of trade policy, it is often too late to advocate against it.
• US relations with Cuba will continue to normalize; therefore, foreign companies already doing business there can reasonably expect more competition from American companies.

Tax

• A reduction of the corporate tax rate from 35% to 15% is highly unlikely to pass as proposed without a game-changing bipartisan agreement.
• The last successful tax reform effort began with Republican President Ronald Reagan and Democratic Ways and Means Chairman Dan Rostenkowski in 1985-86, indicating that the path forward on meaningful tax reform must be bipartisan.

Immigration

• The Trump Administration has given indications of changing the H-1B visa process (H-1B visas are for “specialty occupations,” which require a bachelor’s degree or higher degree to enter the profession), which may include a test of the US labor market before an H-1B would be issued.
• President Trump has signed an executive order requiring a review of all trade agreements and investment agreements signed by the US. It is uncertain whether the Friendship, Commerce, and Navigation treaties will be included in that review, but if they are, many of those treaties provide the legal authority for the E treaty trader/investor visa. So, uncertainty has been created for several types of visas.  

Health Care

• It is more difficult to repeal and replace the Affordable Care Act than many had initially thought.
• It remains to be seen whether the employer mandate will survive any proposed changes to the legislation.
• Congress faces political risk if the ACA is repealed, effectively turning away millions of Americans from health insurance coverage.

Regulatory Environment

• Companies should expect an ease in regulatory enforcement as the Trump Administration seeks to lift “burdensome” regulations.

Energy

• President Trump’s opposition to the Clean Power Plan, as well as the Paris Agreement, further highlights his efforts to deregulate industry.

Infrastructure

• Infrastructure funding legislation could potentially receive bipartisan support, but there will be considerable debate regarding budgetary offsets.
• President Trump has even considered support for a gas tax to help pay for infrastructure.

Food

• Regulations dealing with food safety have historically had bipartisan support. It is unlikely the President, Congress, or the Food & Drug Administration will look to ease new requirements, although full implementation will be difficult for FDA to accomplish if its funding is frozen or reduced.
• From a legislative standpoint, it behooves food companies to monitor the Farm Bill discussions this year. Even though the Farm Bill isn’t up for a vote until next year, the legislative priorities for the new bill will be determined this year. Among the things to look out for are a proposal that would establish a pilot program restricting Supplemental Nutrition Assistance Program purchases of sugar-sweetened beverages.

While it is difficult to forecast accurately the decisions of President Trump and the current Congress, international companies can reasonably expect any changes in policy to be fairly disruptive to the status quo.