As we kick off 2025, there is one topic that is front of mind for just about every IR team: what impact will the new US administration have on my company, sector and IR activities?
At the current time, there are many, many questions – and essentially no clear answers. We can start, however, to sketch out some of the areas where Donald Trump’s second term may bring about change for the IR world.
First up, tariffs. Trump campaigned on a promise to raise levies on foreign goods, with a particular focus on China, Canada, Mexico and the European Union. ‘The most beautiful word in the entire dictionary of words is the word tariff,’ he said at one rally.
With the threat of tariffs – and retaliatory action – hanging over many industries, the business environment just got a whole lot more uncertain. For IROs, navigating that complexity in investor conversations will be a major challenge in 2025.
While there is trepidation about tariffs, the market has been more positive about Trump’s pledge to cut back regulation, as he did in his first term. Sectors like financials and energy are among those set to benefit from looser rules.
Markets also expect a lighter approach to antitrust issues, opening the door for more M&A, if not a full-blown M&A boom. IR professionals, therefore, are more likely to find their employer on the receiving end of offers – a situation that shake ups both the IR role and personal career plans.
The changes coming at the SEC, meanwhile, have been much commented on. We know that the Commission’s current chair Gary Gensler is heading out and Paul Atkins, CEO of consultancy Patomak Global Partners and a former SEC commissioner, is nominated to replace him.
Under Atkins, the regulator is expected to move away from enforcement and large corporate fines, lend more support for innovation in the crypto space and drop the much-delayed climate disclosure rules. Given the slow pace at which the SEC conducts rule-making, however, any new changes are likely to be several months if not years away.
Finally, for the purposes of this column at least, a word on ESG and sustainability. ‘ESG is dead’ is a statement some US IROs have been hearing on the road in recent months. Certainly, it will become even easier for companies to pull back on environmental or social commitments that they have made in recent years.
But the big picture is more nuanced. The pressure on companies to adopt sustainable practices and disclose ESG data comes from a range of angles – many of which will remain in place. For example, businesses may be caught by California’s reporting laws, or Europe’s CSRD, or their customers will continue to demand this information. In addition, will management teams want to abandon ESG pledges if it means they lose their company’s place in key sustainable funds and indices?
How do you see the incoming Trump administration affecting your IR program? Get in touch and let us know at [email protected] or on LinkedIn.
