Navigating Trump 2.0

The Trump administration is using trade policy to reshape supply chains, prioritizing domestic production, strategic investment, and reduced reliance on foreign dependencies. Since late 2025, this approach has focused on bilateral frameworks and investment-linked agreements rather than broad multilateral deals.

Confirmed Developments (As of January 15th, 2026)

U.S.–Taiwan Trade Agreement (Announced January 15th, 2026)
→ Establishes a defined tariff framework, reducing tariffs on most Taiwanese goods and eliminating tariffs on select categories tied to strategic industries.
→ Taiwanese firms also committed large-scale U.S.-based investment in semiconductor and advanced manufacturing capacity.

U.S.–Japan Trade Pact (In Force)
→ Implemented September 2025.
→ Preserves U.S. access for Japanese autos and components.
→ Japan expanded purchases of U.S. goods and energy, including LNG.

‍U.S.–EU Framework Agreement (Active)
→ Establishes a stable trade framework with a defined tariff ceiling.
→ Pharmaceuticals included; generics carved out.
→ EU committed $600B in investment + $750B in energy purchases by 2028.

‍U.S.–South Korea Strategic Trade Framework (Implemented)
→ Framework finalized and implemented in 2025.
→ South Korea committed $350B in U.S. investment + $100B in LNG purchases.
→ Preserves preferential access for U.S. agricultural and automotive exports.

‍U.S.–U.K. Bilateral Trade Agreement (Expanded December 2025)
→ Expanded December 2025 to include pharmaceuticals, APIs, & medical tech.
→ Prior steel, aluminum, automotive, and ethanol provisions remain in force.

U.S.–Switzerland Trade Framework (Implementation Phase)
→ Announced November 2025; now moving into implementation.
→ Links market access to Swiss investment and production alignment in the U.S.

U.S.–China Tariff Truce (Active; Extended via Exclusions)
→ One-year truce reached in late 2025.
→ Includes increased Chinese purchases of U.S. agricultural and energy products and a pause on new rare-earth export restrictions.

U.S. - Vietnam Trade Framework (In Negotiation)
→ Framework agreed October 2025.
→ Establishes a defined tariff baseline with select product carve-outs under negotiation.

U.S. - Latin America Trade Frameworks
→ Frameworks signed with Argentina, Ecuador, Guatemala, and El Salvador.
→ Focused on securing agricultural and pharmaceutical inputs not produced at scale domestically.

The One Big Beautiful Bill Act (H.R. 1) delivers the most significant federal push in decades to bring manufacturing and logistics production back to U.S. soil. It offers powerful tax incentives designed to accelerate facility upgrades, modernization, and domestic supply-chain expansion.

What’s New:

‍Permanent R&D Expensing
‍Beginning in tax year 2025, domestic R&D expenditures may be fully deducted in the year incurred—eliminating the five-year amortization requirement. Small businesses can even apply this deduction retroactively to R&D expenses incurred after 2021.

‍100% Bonus Depreciation + QPP Expensing
-->Section 168(k): Restores 100% bonus depreciation for tangible property (machinery, equipment, and tools) acquired after January 19, 2025
-->Section 168(n): Creates full expensing for Qualified Production Property (QPP)—covering new factories or qualified improvements to production-related real property.


‍EBITDA-Based Interest Deductibility
‍The bill permanently restores the pre‑2022 standard for the business interest deduction—allowing interest on loans and leases to be deducted based on EBITDA rather than EBIT, increasing borrowing capacity for capital-intensive projects

Why This Matters for Domestic Manufacturers
These provisions create a clear financial advantage for U.S. operations:
-->Immediate cost recovery on factory upgrades, automation, and facility investments—accelerating ROI and preserving capital.
-->Enhanced support for innovation by allowing immediate write-off of R&D investments.
-->Greater financing flexibility for capital-intensive expansion through improved interest deduction rules.

On July 4, 2025, President Trump signed the H.R.1 – One Big Beautiful Bill Act into law, representing the most sweeping business tax reform since the Tax Cuts and Jobs Act (TCJA) of 2017. The bill makes several TCJA provisions permanent and introduces targeted incentives aimed at accelerating investment in the U.S. manufacturing, warehousing, and logistics sectors.

This legislation signals a strong federal commitment to reshoring industrial capacity, modernizing facilities, and incentivizing innovation through the tax code.

Key Provisions of the H.R.1 – One Big Beautiful Bill Act:

Permanent Full Expensing for Capital Investment
100% bonus depreciation is restored and made permanent for short-lived capital assets (under 20 years), including machinery, tools, and equipment.
‍
The bill adds a new provision under §168(n) allowing full expensing of Qualified Production Property (QPP) such as:
-->New manufacturing or logistics facilities
-->Upgrades to existing warehouses or production lines
-->Major capital improvements
Construction must begin before December 31, 2028, and assets must be placed in service before January 1, 2031.

Immediate R&D Expensing
The bill permanently restores the immediate deduction of R&D expenses, reversing the TCJA’s five-year amortization rule that took effect in 2022.📉

EBITDA-Based Interest Deductibility
-Reverts interest deduction limits back to an EBITDA basis (instead of EBIT), increasing financing flexibility—especially important for capital-intensive industries like manufacturing and logistics.

Corporate and Pass-Through Tax Clarity
The 21% corporate tax rate is retained permanently. While the bill does not raise the pass-through deduction, it extends the TCJA §199A deduction for pass-through businesses (like LLCs and S Corps) beyond its original sunset date of 2025.

International Tax Reform
The bill preserves and modifies key international tax rules including:
-FDII (Foreign-Derived Intangible Income)
-GILTI (Global Intangible Low-Taxed Income)
-BEAT (Base Erosion and Anti-Abuse Tax)These are adjusted to encourage onshoring of intellectual property and discourage profit shifting.

Estate Tax Exemption
The doubled estate tax exemption from the TCJA (approx. $13M per individual) is made permanent, protecting many family-owned manufacturers from estate tax exposure.

Following the signing of the One Big Beautiful Bill Act (H.R.1) and President Trump’s return to office, the administration has taken a more business-friendly regulatory stance—particularly in the areas of labor classificationand energy policy. While many deregulatory efforts are still unfolding, a few early moves are already impacting U.S. manufacturers and distributors.

Key Regulatory Developments

Labor Classification: DOL Halts Enforcement of Independent Contractor Rule
In May 2025, the U.S. Department of Labor formally announced it will not enforce the 2024 rule that tightened standards for classifying independent contractors under the Fair Labor Standards Act (FLSA).
-->This means employers face less risk of federal enforcement when using 1099 workers.
-->However, the 2024 rule remains in effect and can still be enforced through private litigation or state action.

Corporate Reporting: ESG and Transparency Rules Paused or Withdrawn
The administration has paused or withdrawn several proposed federal disclosure rules, including:
-->A climate-related financial disclosure mandate for federal contractors. These delays lower anticipated administrative burden but do not repeal existing laws, such as those under the Corporate Transparency Act (CTA).

Energy Policy: Signals of Deregulation
While H.R.1 does not contain direct environmental or permitting reforms, the administration has publicly signaled intentions to:
-->Repeal the EPA’s 2009 greenhouse gas endangerment finding—a foundational regulation underpinning many climate rules.
-->Review emissions standards for vehicles and industrial sources.
No final rulings have been published, but energy-intensive sectors (e.g., refining, mining, heavy manufacturing) are anticipating possible regulatory relief.

Implications for Manufacturers and Distributors
-->Increased labor flexibility from the DOL enforcement pause allows companies to use independent contractors more confidently to scale operations or meet temporary demand.
-->Reduced compliance risk around ESG reporting enables small and mid-sized manufacturers to allocate more resources to growth rather than administrative tracking.
-->Pending energy policy changes may lower operating costs over time, but businesses should continue monitoring regulatory developments closely.