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12 November, 2016
The election of Donald J. Trump as president of the United States has created uncertainty. A political newcomer, he takes office at a time of social polarization and low trust in government. His advocacy for economic protectionism and retrenchment from traditional alliances, if implemented, would transform the way the United States engages with the world. Trump’s choices for his cabinet will provide clues on how regulatory and compliance teams can prepare for a Trump administration.
- Trump’s election is likely to end a period of expanding compliance regulation and aggressive enforcement. Any e orts to undo the Dodd-Frank Act or the post-2008 nancial regulatory framework will face challenges in the U.S. Congress. However, officials serving a Trump administration can reduce the impact of these laws by limiting their implementation. Moreover, we expect Trump’s administration to shift focus away from integrity compliance to penalizing companies viewed as outsourcing jobs.
- Trump’s foreign policy preferences suggest a reduction in US sanctions against Russia, but increased risks to trade with Iran, China, and Mexico. Trump has repeatedly stated his interest in repairing ties with President Vladimir Putin of Russia; he is unlikely to support continued sanctions against the country. However, Trump has repeatedly denounced Obama’s nuclear deal with Iran, and threatened tariffs against China and Mexico, generating new compliance risks for companies involving U.S. counterparties in transactions with those countries.
- Trump will announce his choices for cabinet posts over the coming weeks, providing clues as to his policy priorities. Trump’s inexperience in government suggests he will be especially reliant on others to help implement his policies. This includes former House Speaker Newt Gingrich, tipped as a potential secretary of state, who is on record advocating to abrogate the nuclear deal with Iran. Steven Mnuchin, a banker and lmmaker, is considered a likely candidate to become treasury secretary; he has been equivocal about his views on compliance regulation. Whatever the makeup of Trump’s cabinet, compliance professionals can expect changes ahead.
For further information, please contact:
Bill Sims, Managing Director, Stroz Friedberg
bsims@strozfriedberg.com
