Potential Election Impacts on the Technology Sector
Under the Trump administration, the real estate sector will likely face new circumstances defined by deregulation, leadership changes and tax reforms. While reduced compliance costs and regulatory burdens might pose short-term benefits, the potential risks associated with significant deregulation and environmental policy changes could impact long-term sustainability.
Real estate stakeholders will need to be proactive in strategic planning and compliance to navigate these potential changes effectively.
Cybersecurity and AI Policies
Trump has not explicitly addressed the regulation of AI-driven consumer technologies such as facial recognition, biometrics and tracking technologies. However, these technologies might face less federal scrutiny under his administration, potentially allowing for faster technological growth in sectors like retail and advertising. Trump is expected to support AI regulation that focuses on high-risk sectors, aiming to mitigate risks associated with AI while allowing for innovation and development in less-critical areas.
Additionally, Trump may advocate for a narrower construction of what constitutes patient or health data under HIPAA, enabling broader applications of AI in medical decision-making tools and fostering innovation in healthcare technology. Under Trump, cyber defense policies might shift focus from consumer protection to industry self-regulation, benefiting tech companies developing AI-based cybersecurity tools by reducing regulatory burdens and encouraging innovation in cybersecurity solutions.
Intellectual Property and Regulatory Policies
The Patent Eligibility Restoration Act (PERA) aims to clarify what constitutes patentable subject matter, while the Promoting and Respecting Economically Vital American Innovation Leadership Act (PREVAIL) seeks to modify Inter-Partes Review (IPR) proceedings within the United States Patent and Trademark Office (USPTO). Both are bipartisan initiatives designed to fortify U.S. patent rights amidst ongoing challenges and may find renewed support under the Trump administration, although Trump has not explicitly endorsed them.
Drawing from the tenure of Director Andrei Iancu, President Trump’s previous appointee, a new Under Secretary of Commerce for Intellectual Property and Director of the USPTO is likely to advocate for streamlined examination rules that favor inventors, aiming to reduce IPRs and PTO re-examinations of patents to promote innovation.
Labor and Employment Policies
Trump has indicated he will seek to veto the PRO Act if passed through Congress. The PRO Act aims to revise definitions of joint employer, employee and supervisor under the National Labor Relations Act (NLRA), impose stricter standards for classifying workers as independent contractors and limit employers’ ability to communicate about unionization. The PRO Act intends to also expand the circumstances where entities are “joint employers,” exposing a significant number of employers, including potentially corporate parents and private equity sponsors, to obligations under the NLRA.
Trump has called for eliminating taxes on tips, potentially reducing federal revenues by more than US$1 trillion over the next decade, but increasing take-home pay for workers in tip-reliant industries. In response, employers could reclassify wages as tips in certain circumstances, further increasing the federal deficit. In 2019, Trump signed the Federal Employee Paid Leave Act (FEPLA) providing twelve weeks of paid parental leave to qualifying federal employees. The Trump campaign has not indicated whether Trump will work to expand this policy direction by supporting paid leave for non-public employees.
Trump has also not taken a stance on the FTC’s rule banning noncompetition agreements yet. However, based on his actions during his prior term, Trump may appoint commissioners to the FTC who would be more likely to rescind the rule or instruct government lawyers not to defend it in court. If the FTC’s ban on noncompete agreements, which is currently enjoined while legal challenges are decided, were to go into effect in the future, employers would be prohibited from entering into noncompetition agreements with employees (with limited exceptions), and the ban would invalidate existing agreements with most employees.
Tax Policies
Trump has expressed interest in reducing corporate tax rates from 21 percent to 20 percent. In addition, companies that manufacture their products in the United States would be eligible for a special 15 percent corporate rate. These changes would reduce business taxation and are intended to incentivize onshoring or U.S. investment. It’s likely that Trump will also aim to permanently extend the tax cuts introduced by the 2017 Tax Cuts and Jobs Act, fostering a more favorable economic environment for corporate growth. Trump has called for imposing higher tariffs, including tariffs of 10-20 percent on all U.S. imports and 60 percent on imports from China. These changes could create supply chain issues for many companies, though there is debate as to what extent the executive branch can unilaterally implement tariffs without congressional action.
Antitrust Policies
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We are unlikely to see a return to the traditional antitrust principles that largely describe antitrust enforcement from 1980 through 2016. Although reduced regulatory overreach based on unprecedented theories would provide more regulatory certainty regarding whether transactions are likely to obtain antitrust clearance, distrust of big business on both sides of the political aisle likely will continue to make the regulatory landscape less predictable for businesses.
However, under Trump, the departure of Lina Khan as FTC Chair is likely. While at first blush this would suggest a more business-friendly environment, antitrust enforcement will remain a powerful tool that could be used to scrutinize corporate initiatives some republicans view as overreach, such as ESG and political censorship. However, an increase in negotiated settlements, which have largely disappeared under the Biden administration, would result in fewer lawsuits, reducing the length and cost of legal battles and promoting a return to reasonable remedies that efficiently balance the interests of the government, private companies and consumers.
The Trump administration likely will continue to scrutinize conduct practices by Big Tech. Although the 2024 decision finding that Google illegally maintained its monopoly in general search came during the Biden administration, that lawsuit was filed in 2020 by the Trump administration. Thus, it is possible that ongoing lawsuits the Biden administration has filed against Amazon and others will continue.
The Trump administration is expected to continue a business-friendly regulatory environment, focusing on reducing federal oversight and encouraging innovation in the technology sector. However, potential changes in tax policies, labor laws and trade tariffs may pose challenges.
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