Written by Tannia Pereira
If Donald Trump returns to the White House, a wave of deregulation is likely to revitalize certain sectors while posing challenges for others. Trump’s administration previously prioritized reducing regulatory burdens, and a second Presidential term could see an extension of these policies. Additionally, the recent Supreme Court decision to overturn the long-standing Chevron doctrine could further accelerate deregulation efforts by reducing judicial deference to federal agencies’ expertise.
After the recent Presidential candidate debate, sectors poised to benefit from deregulation, like gaming, healthcare, defense, and capital markets, performed well in the equity market. Conversely, sectors such as consumer discretionary and renewables, potentially facing higher tariffs and subsidy losses under Trump, underperformed. During his first term, Trump directed agencies to eliminate two regulations for every new one proposed and appointed officers to oversee reform initiatives. His administration claimed to have streamlined 1,500 regulations, including environmental, labor, and financial rollbacks, saving businesses $50 billion in regulatory costs and boosting household income by $3,100 annually by 2020, according to the Council of Economic Advisers.
Sectors like energy and utilities stand to benefit as well; with potential easing of regulations for oil and gas development, LNG exports, and environmental restrictions such as emissions and permitting. Trump is now aiming to boost domestic energy production through eased drilling restrictions and removing limits on natural gas exports. In healthcare, while efforts to ease certain drug pricing regulations may occur, other areas face complexities and bipartisan concerns. During Trump’s campaign, he has proposed overhauling healthcare, replacing Obamacare. Lastly, financial services could see opportunities with potential relaxation in consumer finance rules and capital requirements, offering banks and financial institutions greater flexibility and reduced compliance costs.
In conclusion, deregulation under a potential second Trump administration could benefit industries such as gaming, healthcare, defense, capital markets, energy, utilities, and financial services. Whether through a Republican sweep or executive orders, the path taken will significantly influence the extent and speed of deregulation efforts. Furthermore, the Supreme Court’s recent decision to end the Chevron doctrine will likely facilitate more deregulation by challenging federal agencies’ authority, amplifying the impact of Trump’s policies. The combined effect of these political and judicial shifts could reshape the regulatory landscape, providing a considerable boost to these industries.
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