Election Aftermath: Key Takeaways

We recently gathered a group of attorneys from across Reed Smith to provide an overview of key changes we expect to see within the regulatory landscape following the U.S. presidential election. If you missed the webinar, you can access the recording on demand.

Please see the summary of our top takeaways below and look out for an invite to the next installment of our quarterly Investigations and enforcement trends webinar series – we hope you can join us!

Health care

1. Despite success in ballot initiatives in numerous states protecting reproductive rights, the new Trump administration is likely to implement restrictions on abortion medication, which will limit abortion access on a nationwide basis. However, we consider it unlikely that an explicit legislative federal abortion ban will be implemented because of shifting political strategies and campaign promises.
2. The Department of Health and Human Services (HHS) will likely face a brain drain under health secretary Kennedy and we expect regulatory direction on numerous gender-affirming care and LGBTQ+ rights will be reversed. It is likely that a new Congress will use the power of the purse to legislate against gender-affirming care and coverage for abortion travel for the military. Legislation is expected to make the Hyde Amendment permanent.
3. It is unlikely that there are sufficient votes to repeal the Affordable Care Act, but we expect legislation to change risk pools and otherwise present reforms. We anticipate legislation on pharmacy benefit management and possibly a re-evaluation of Medicare Advantage features – two areas with some bipartisan support.

Finance

1. Leadership changes at the U.S. Securities and Exchange Commission (SEC), Consumer Financial Protection Bureau (CFPB), Office of the Comptroller of the Currency (OCC) and Federal Deposit Insurance Corporation (FDIC) will likely result in a less aggressive attitude toward enforcement of financial services regulation.
2. Implementation of particularly onerous rules issued recently by the financial services regulators may be delayed or extended and those rules could be completely reworked, including the open banking rule, small business lending rule, merger guidelines, CRA regulations, FDIC advertising rules, Basel III endgame, etc.
3. Efforts to create a coherent regulatory framework for AI in financial services and digital assets may be delayed.

Government contracts

1. The administration plans to increase border security and infrastructure, along with mass deportation and stricter immigration enforcement, which will likely impact government contracts related to border security and immigration services.
2. There will be a rollback of Biden-era clean energy initiatives, with a focus on increased domestic energy production and mining. This could affect government contracts in the energy sector, particularly those related to renewable energy projects.
3. Federal sponsored or supported Diversity, Equity, and Inclusion (DEI) programs are expected to be dismantled, leading to changes in government procurement priorities and the criteria used for awarding contracts.

Corporate crime

FCPA/FEPA

1. Although Trump is not a fan of the FCPA, the prior Trump administration increased FCPA enforcement to record levels, with the SEC and DOJ imposing penalties and fines averaging $2.7 billion a year.
2. DOJ is expected to open fewer new FCPA investigations, but aggressively prosecute the many existing and ongoing FCPA investigations.
3. Expect first enforcement of the new FEPA statute.

Consumer protection

1. Federal agencies are likely to continue aggressive consumer protection enforcement based on clearly established sources of statutory and regulatory authority.
2. As a result, businesses will be expected to be on notice of any violations.
3. State and local consumer protection agencies will remain robust actors in this space, necessitating continued vigilance.

Antitrust

1. Recent cabinet appointments suggest that Trump will appoint an assertive Republican majority to control the FTC. New leadership is likely to abandon key Biden-era policies such as the noncompete ban and revised merger guidelines.
2. Policy rollback or revisions may take time, but immediate effects will likely be a de-escalation of the existing merger enforcement environment, including a more flexible approach to structural remedies and consent decrees to resolve challenged deals.
3. Even if the Trump administration employs a lighter touch on enforcement, the concept of "weaponized antitrust" is expected to persist among state attorneys general and private litigants, who will continue to assert the more aggressive and novel aspects of recent policy changes.

International trade policy

Latin America

1. The new Trump administration is expected to revive the Monroe Doctrine to counter foreign influence, particularly in Latin America, which will likely involve a more assertive stance on foreign policy, drug cultivation and trafficking, and trade relations within the Western Hemisphere.
2. Under Trump, potential stricter enforcement of existing sanctions and the introduction of new ones may impact trade flows and business operations between the United States and Latin American countries.
3. The administration plans to review the United States-Mexico-Canada Agreement with an eye toward tougher negotiations, which could lead to changes in trade terms and increased scrutiny of compliance with the agreement's provisions, especially as it pertains to Chinese products manufactured in Mexico.

Export controls

1. Both the Trump and Biden administrations have aggressively expanded export controls, particularly targeting China.
2. These controls restrict the export of critical U.S. technologies, such as semiconductors, AI and biotechnology to foreign adversaries.
3. A renewed Trump administration is likely to intensify these measures, further limiting access to emerging technologies, which is likely to impact global technology markets, disrupt international supply chains and create compliance challenges for multinational companies operating in sensitive sectors.

Sanctions

• Economic sanctions have been a significant tool for both the Trump and Biden administrations to exert pressure on adversaries such as China, Iran and Venezuela.
• This approach is expected to continue under a renewed Trump administration, potentially leading to increased geopolitical tensions and disruptions in international trade.
• There is likely to be an expansion of sanctions targeting specific sectors and entities, particularly those related to national security concerns such as technology, energy and finance.

This article is presented for informational purposes only and is not intended to constitute legal advice.