Key Policy Shifts Manufacturers Should Watch Under a Second Trump Administration

The Trump administration is actively rolling out new policies, many of which could significantly impact U.S. manufacturing operations. As developments continue, here are three critical areas manufacturers should monitor closely.

1. Changes to Tax Laws on the Horizon

Several tax breaks introduced under the 2017 Tax Cuts and Jobs Act (TCJA) are scheduled to expire, but new legislation could revive or extend them—offering continued benefits to manufacturers.

One major provision is bonus depreciation, which allowed businesses to immediately deduct the full cost of qualifying equipment, including used and new machinery, from 2017 through 2022. That percentage has since decreased (expected to be 40% in 2025), but lawmakers are likely to push for reinstating the 100% deduction.

The Qualified Business Income (QBI) deduction is another key benefit. It enables owners of pass-through businesses to deduct up to 20% of their QBI. This deduction is currently set to sunset after 2025, meaning business income would revert to being taxed at the owner’s full individual rate. However, it’s widely anticipated that Congress will act to preserve or permanently extend the deduction.

Additionally, individual tax rates, which currently max out at 37%, are scheduled to rise to 39.6% in 2026. Manufacturers should also keep an eye on potential changes to the corporate tax rate, which Trump has indicated he may reduce further, along with eliminating the 15% corporate alternative minimum tax.

2. Rollback of Clean Energy Incentives

The Inflation Reduction Act (IRA), passed under the Biden administration, included a variety of clean energy tax credits—such as incentives for electric vehicles, solar panels, and home energy efficiency upgrades.

Republican lawmakers, including Trump, have expressed strong opposition to the IRA. Trump has promised to slash unspent funds and reverse many of the clean energy tax breaks introduced by the act.

Despite these intentions, pushback has emerged from within the GOP itself. Several clean energy projects—some already in progress—are located in Republican-led districts. In fact, a group of Republican representatives recently urged House leadership not to pursue a full repeal of the IRA. More moderate adjustments, such as stricter eligibility rules for credits, are more likely than an outright rollback.

3. Trade Policies and Tariff Strategies

Trade policy was a hallmark of Trump’s first term, and it remains central to his agenda. He has proposed a baseline tariff of 10% on all imports, with potentially higher rates on goods from certain countries. However, this stance has evolved, with a growing focus on “reciprocal” tariffs targeting countries that impose higher duties on U.S. exports.

For domestic manufacturers, this could bring both advantages and challenges. Companies competing with low-cost foreign imports might benefit from reduced competition. However, businesses that rely on imported raw materials may face supply chain disruptions or increased costs if tariffs are imposed on key materials.

In addition, the risk of retaliatory tariffs from other nations could reduce demand for American exports and add to inflationary pressures—driving up costs across the board.

4. Preparing for What’s Next

With policy shifts happening rapidly, manufacturers need to stay informed and be ready to adapt. Whether it’s tax planning, adjusting to new trade dynamics, or managing energy-related incentives, understanding the evolving landscape is essential.

Need help making sense of it all? Contact us for insights tailored to your organization’s unique situation.