In the wake of former President Donald Trump's reelection last week, industry leaders across the country are preparing for what changes the new administration could bring.
During his campaign, Trump talked frequently of his plan to raise tariffs across the board as a way to boost U.S. manufacturing.
Trump also spoke of his desire to curtail federal funding for clean energy and semiconductor production, hallmarks of the Biden administration's domestic manufacturing agenda.
As President-elect Trump begins unveiling his transition plans, here are four manufacturing issues experts say could be most impacted by the incoming administration.
1. Tariffs
Trump has been clear about his intent to raise tariffs, including a possible 10% tariff on all incoming products, as well as 60% tariffs on items coming from China.
The result of that move could be "devastating" for manufacturers that import foreign components, said Sanjay Patnaik, a senior fellow at the Brookings Institution.
"Just imagine the cost increases this would have, and it will also slow down the economy significantly. It would increase prices for everything," Patnaik said. "The question is how much of that will really be implemented?"
In response to such hikes, other countries would likely impose retaliatory tariffs of their own, said Willy Shih, an economist at Harvard Business School.
"What we've seen historically is countries usually respond by finding something that they can target, that will hurt as much as possible," Shih said.
Shih added that he expects to see some "surprises" when Trump makes his initial tariff plan.
"If he starts applying sweeping tariffs, you could have places like China say 'we're going to put export bans on materials,’” Shih said. “Other countries will respond and be very strategic."
2. Taxes
The new administration is likely to extend the Tax Cuts and Jobs Act's benefits, passed during Trump's first term, which are set to expire in 2025, said Andrew Wronski, chair of law firm Foley & Lardner's manufacturing sector.
This could include continuing to allow manufacturers to expense research and development work, as well as extending the 100% bonus depreciation and lowering the capital gains tax.
"Those were good things for manufacturers. The concern was they would go away in a Harris administration. Now they're going to stay," Wronski said. "So how much affirmative planning do you need around that?"
Patnaik noted that he expects lower taxes under the new administration, particularly if Republicans gain a majority in the House of Representatives.
"I would expect, in general, like a traditional Republican government, more pro business, a business friendly kind of approach to taxes and the economy," Patnaik said.
3. Regulation
When it comes to regulation, Wronski said he expects the Trump administration to curtail oversight. This could include regulations on industrial emissions from the Environmental Protection Agency.
Wronski noted he also expects to see a "different" approach to employee and labor relations, including changes in overtime pay and independent contractor rules. There could also be changes in National Labor Relations Board and Federal Trade Commission rules.
"Manufacturers will see all of those as carrots, so to speak, as incentives, to develop in the United States and produce in the United States,” Wronski said.
4. Energy
The new administration is likely to move quickly to increase domestic energy production and reduce energy costs, Wronski said. This could include deflationary cost measures for manufacturers.
Trump is also likely to curtail national clean energy targets brought in by the Biden administration, such as tightened national pollution standards for vehicles and EV adoption goals.
Trump has been vocal about his desire to curtail the EV tax credits under the Inflation Reduction Act.
"That's going to benefit manufacturers tremendously if that happens," Wronski noted. “If these things are successful, altogether hopefully you'll see an increase in nearshoring and reshoring.”
