Veryable is your trusted source for information and insights as you navigate the upcoming policy changes and regulatory shifts driving a U.S. Manufacturing Renaissance under the new administration.
Every election marks a new chapter in America, presenting both opportunities and challenges. With Donald Trump now back in the White House, and the Republican Party in control of both the Senate and House of Representatives by a slim majority, significant changes can be expected in the manufacturing and distribution sectors.
Below is a brief analysis of some of the expected policy changes, and their potential implications.
The use of tariffs was a key component of Trump's first term, particularly on imports from China and on aluminum and steel globally. This policy is expected to return, albeit with new provisions aimed at strengthening the domestic manufacturing sector. During his 2024 campaign, Trump promised at least 60% tariffs on all imports from China, and 10-20% global tariffs on imports from all other countries.
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Extension To New Countries: In recent weeks, Trump has announced his intent to impose tariffs on Mexico and Canada, and also potentially 100% tariffs on the BRICS nations if they create an alternative currency to the dollar for international trade.
Focus on Key Goods: While it's not yet clear which imports or industries will face tariffs, preliminary discussions have largely focused on the defense industrial supply chain (steel, iron, aluminum & copper), critical medical supplies (needles, syringes, vials, etc.), and energy production (batteries, minerals, solar panels). Trump has also threatened tariffs against companies that are considering shifting their manufacturing operations abroad.
Phased Introduction: Many experts believe that tariffs will likely have a phased introduction, and will be rolled out slowly to minimize any economic disruption.
Additional Tariffs: With Trump viewing tariffs as a primary tool for diplomatic negotiations, additional tariffs are a likely possibility. More specifically, there have been proposals to impose "reciprocal tariffs" at the same level as foreign countries assign to specific products.
Implications:
Tariffs on critical materials will drive up production costs for manufacturers dependent on foreign sourced components, and if they are unable to quickly pivot and identify alternative suppliers in domestic or non-tariffed markets, this will force them to choose between absorbing the excess costs or passing them to consumers, both of which will negatively impact price competitiveness.
To prepare for these changes while maintaining cost-effectiveness and compliance with new trade policies, manufacturers and distributors dependent on foreign materials should explore reshoring or near shoring strategies.
Based on his promises, his history, and his advisors, Trump’s administration can be expected to revamp its protectionist approach by offering new and enhanced tax breaks and subsidies to boost domestic production.
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Enhanced Tax Credits: Trump’s proposed policies aim to reverse the trend of financial pressures overshadowing R&D priorities, offering expanded R&D tax credits and allowing businesses to fully expense the cost of heavy machinery and equipment within the first year. There has also been talk of direct subsidies for companies building new manufacturing plants.
Sector-Specific Focus: Industries considered integral to national security like pharmaceuticals, rare earth metals, and semiconductor production may receive targeted support.
Implications:
Enhanced tax credits would alleviate much of the financial burden of innovation, enabling manufacturers to invest in cutting-edge technologies and infrastructure without compromising their bottom lines. For small and medium-sized manufacturers, this is particularly impactful.
Additionally, these incentives could lead to reduced operating costs and increased competitiveness for U.S. manufacturers and distributors, which could trigger a massive surge in domestic production. This would also boost other industries like construction and logistics, and create increased demand for skilled manufacturing labor which is likely to drive wages up.
Under the new administration, tax policy will be used to drive growth in the manufacturing and distribution sectors. During his campaign, Trump promised to make provisions of the Tax Cuts & Jobs Act (TCJA) permanent.
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Full Expensing Provisions: These provisions will allow businesses to immediately deduct the full cost of certain investments in new or improved technology, or infrastructure, which could trigger a surge in domestic infrastructure investment.
Interest Deductions: It’s expected that the regulations around interest deductions that were in place up until 2022 will be reinstated. Specifically, Trump promised voters shortly before the election that he’ll treat interest paid on loans for domestically produced vehicles like the deduction for interest on home mortgages on federal tax returns. This would help to discourage Chinese automakers from attempting to sell vehicles in the United States.
Lowered Corporate Tax Rates: In his first term, Trump lowered the corporate tax rate from 35% to 21% via the Tax Cuts and Jobs Act of 2017 (TJCA). Now in his second term, Trump seeks to lower it even further, and has proposed a rate of 15% for domestic manufacturers.
Territorial Tax Adjustments: There will likely be changes implemented to ensure multinational corporations are taxed in a more favorable manner; this would discourage them from shifting profits from parent companies or subsidiaries in high-tax jurisdictions to subsidiaries in low-tax jurisdictions.
Implications:
If corporate tax rates become significantly lower than for other structures, this could trigger a shift on what legal form of business structure new and existing companies decide to use.
Tax reductions will also incentivize companies to reshore operations and strengthen domestic supply chains. Tariffs on imports, paired with these tax incentives, may compel businesses to reevaluate global footprints and consider U.S.-based production.
Additionally, tax savings will allow companies to channel cash into automation, facility improvements, or other productivity-boosting technologies.For manufacturers, these reforms present a pivotal moment. American companies positioned stand to benefit immensely, while others may find it increasingly necessary to localize operations to capitalize on these tax breaks. To prepare for these changes, businesses should assess their tax strategies now.
In an effort to reduce compliance burdens for manufacturers and distributors, The Trump administration plans to roll back regulations, with an emphasis in the areas of energy, manufacturing and real estate, especially related to Corporate Transparency Efforts and ESG.
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Environmental Regulations: Changes in this category will likely include loosening emissions standards and simplifying permit processes for factory expansions, which would be a major cost-saver for manufacturers. Additionally, Trump promised during his campaign to roll back other green regulations that currently hinder oil and gas drilling and coal mining. If enacted, these deregulatory measures could significantly boost shares in traditional energy sectors.
Labor Rules: The Trump administration’s anticipated direction on labor policy represents a stark departure from the previous administration’s stance on independent contractors. Once the incoming administration takes office in January, they will quickly drop the previous USDOL’s defenses to the employer groups and roll back the rule through rulemaking to the Trump independent contractor rule - a rule that makes it much easier to classify workers as independent contractors.
Implications:
A reduction in regulations for manufacturers and distributors could lead to significant cost reductions, and more cash on hand for reinvestment.
With regards to the labor regulation rollbacks, previously risk-averse legal and HR departments will recalibrate and have an opportunity to push forward huge value to their companies by utilizing 1099 workers. This is especially true in manufacturing where we can expect the Trump administration to incentivize onshoring which in turn will bring a huge increase in production and in demand for skilled labor. Additionally, adjustments to rules under OSHA and similar agencies could aim to lower compliance costs and reduce reporting requirements.
Significant shifts in U.S. international trade policy are expected, driven primarily by Trump’s concerns about trade deficits with key trading partners, his stated goal of moving overseas manufacturing back to the United States, and his willingness to use trade actions as a coercive tool.
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Revisions to USMCA: The United States-Mexico-Canada Agreement (USMCA), requires a joint review by July 2026 and agreement by all three parties to continue. However, with the recent inauguration of Donald Trump, this review will likely become more of a full-fledged renegotiation as the new administration seeks to reshape North American trade, migration, and security, as well as address China’s growing influence in regional supply chains.
Bilateral Trade Negotiations: In order to counterbalance Chinese influence, Trump is likely to pursue agreements with other countries in Asia such as India, South Korea, and Vietnam.
Implications:
In the short term, these potential trade renegotiations could create disruptions and force businesses to adjust distribution & sourcing channels. In the long term however, more favorable conditions for American companies will lead to greater market share. Either way, manufacturers and distributors will need to be able to adapt quickly to these changes, especially if new tariffs or trade agreements impact costs.
Throughout his campaign, President Donald Trump repeatedly stated plans for shutting down the US-Mexico border and building a wall, mass deportations of illegal immigrants, reversals of Biden-era actions, and the undoing of programs such as Deferred Action for Childhood Arrivals (DACA) and Temporary Protected Status (TPS).
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Deportations: The Trump administration has begun to implement its plan for deportations across the U.S., with Immigration and Customs Enforcement (ICE) instructed to meet a quota of 1,200 to 1,500 arrests per day. The administration also plans to use punitive measures—including withholding federal funds against sanctuary cities and other localities and states that have declared that their local law enforcement and other institutions will not collaborate with Immigration and Customs Enforcement (ICE). The administration has also directed federal prosecutors to investigate and even bring criminal charges against state and local officials who refuse to cooperate with ICE. US-Mexico
Border Closure: 36 hours after Trump issued an executive order directing the Department of Defense to address the situation at the border, Acting Secretary of Defense Robert Salesses announced that the Pentagon will be deploying 1,500+ active-duty troops to the southern border as well as air and intelligence assets in order to augment enforcement operations in the region. With 2,500 active-duty personnel already in the region, the additional 1,500 troops will represent a 60% increase in active-duty forces. Five hundred U.S. Marines and sailors have also been deployed from Camp Pendleton to the southern border to assist in enforcement operations there. As a result, illegal border crossings are already down 93% according to Border Czar Tom Homan. Trump has also stated plans to resume building a border wall, and this has already started in New Mexico, Texas, and California.
Implications: Businesses dependent on illegal labor will need to quickly identify alternative sources that have thorough vetting processes for workers and can be deployed immediately with no waiting or red tape. In the event of an ICE raid where workers are arrested en masse like what we’ve already seen in the past few weeks, there won’t be any time to wait around and brainstorm solutions. Businesses will need to act fast in order to maintain business continuity, avoid having to overrely on overtime, and retain key customers.
The same is also true in the event that a competitor’s business is raided by ice. If and when this happens, their customers will likely look for other suppliers who actually have the workforce capacity to deliver on their commitments. In this case, there won’t be weeks to go and hire new workers, and businesses will need to be able to immediately scale up to capitalize on the opportunity.
While we don’t yet know for sure what’s in store for Trump's second term, it’s safe to say that this new administration will bring profound changes to the economic and regulatory landscape of the United States. Each potential change signals both opportunities and challenges, and the businesses that will thrive are those that are agile and can adapt proactively. This moment demands a clear-sighted approach to risk, a sharp understanding of where adaptability is possible, and a commitment to purposeful action.
By partnering with Veryable, manufacturers and distributors gain access to a team of experts and powerful technology that not only helps enhance operational efficiency and control costs, but positions them to take full advantage of upcoming policy shifts. With a flexible workforce, businesses can respond rapidly to market changes, safeguard their operations from overstaffing or understaffing, and preserve both capital and operational integrity.
To learn more about how Veryable can help you thrive amidst these changes, check out the blog articles below.
As these policy changes take place, we'll be updating this page and adding new blog articles, case studies, and guides.
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