(This column originally appeared in The Wall Street Journal)
JPMorgan Chase set up a war room. The law firm Fisher Phillips created an immigration hotline to help clients manage potential workplace raids. Manufacturers and retailers have teams working to soften the blow of potential new tariffs.
The blitz of executive orders and memos from President Trump left business leaders—some still in the tuxedos they wore to White House inaugural galas—scrambling to make sense of sweeping changes to tax, immigration, trade and energy policies.
“There’s probably some shock and awe on day one,” said Nick Studer, chief executive of Oliver Wyman, a management-consulting firm. Trump is “at the peak of his power now,” and more will become clear as the administration gets into governing, said Studer, who added that few companies fully grasp the impact of potential tariffs.
Akin Gump Strauss Hauer & Feld, a law firm focused on corporate clients, launched a Trump executive-order tracker Monday. By Tuesday afternoon, the law firm had posted 32 blog entries summarizing what it believed were some of the most important orders and memos.
Brian Pomper, co-leader of the firm’s lobbying practice, said the Trump administration’s promise to make major changes in its first 100 days encouraged his firm to launch the tracker. “I was very focused on the executive orders this time in a way that I wasn’t in 2021 and in 2017,” Pomper said, adding that he was fielding calls from clients about the orders.
Many of Trump’s first-day moves were expected, and there were few details on some of the biggest topics, including deportations. Some of the orders are already being challenged in court. The initial orders didn’t impose any tariffs, though Trump told reporters he planned to put 25% duties on imports from Mexico and Canada on Feb. 1.
The details of any new tariff policy would be critical for companies including 3M, the American manufacturing company behind everything from Scotch tape to materials used in electric-vehicle batteries.
3M CEO Bill Brown said the company exports about $4 billion in products each year, far more than the $1.7 billion of goods it imports. Roughly half of those imports, however, come from Mexico and Canada.
“We’re watching it very, very carefully, but we have a lot of operational levers that we can pull,” Brown said. “We have a lot of factories in the U.S., and we can flex them and maybe bring some of that product back to the U.S.”
Some executives will be watching Trump’s confrontational turn in long-running global corporate tax negotiations and his warning of potential retaliation against foreign taxes that the U.S. could deem unfair or discriminatory.
In 2021, about 140 countries reached an international tax agreement in two parts, attempting to put a floor under corporate-tax rates and create clearer rules for which countries get to tax which income. Companies and Republicans have been objecting in particular to attempts to tax U.S.-based companies that pay below the 15% corporate-tax floor in the U.S., which undercut the research tax credit.
Trump signed an executive memo on Monday that says Biden administration commitments under the deal have no force within the U.S. without congressional approval and asked administration officials to study potential U.S. actions.
“The Trump administration will need to decide whether this is bluster that’s intended to lead to compromise or the beginning of a tax and trade war,” said Itai Grinberg, a Georgetown Law professor who helped negotiate the deal as a Treasury Department official in the Biden administration. “I hope and believe this is saber-rattling meant to lead to compromise.”
Rohit Kumar, a principal in PricewaterhouseCoopers’s U.S. tax practice and a former Senate GOP aide, said he woke up Tuesday to dozens of emails from executives with questions. “It’s going to yield a ton of complexity for multinational companies,” Kumar said. “It may yield double taxation in some or many cases.”
One of the top executives at JPMorgan Chase, Mary Erdoes, said at the World Economic Forum in Davos, Switzerland, that the bank had set up a “war room” to digest the bevy of new policies.
Staff members in the bank’s government-relations department have been studying the executive orders and sending takeaways to top executives including CEO Jamie Dimon. Other banks including Bank of America and Citigroup have been doing the same thing, preparing to help international clients and companies respond.
Many companies remain concerned about changes to immigration policies. The law firm Fisher Phillips on Tuesday launched a rapid-response immigration team, made up of attorneys across the firm, to deal with an onslaught of client questions and concerns.
Some clients are already panicked about looming immigration-policy changes or potential business disruptions, said Shanon Stevenson, co-chair of the firm’s immigration-practice group. “We’re already getting calls,” she said. “That’s only likely to increase.”
The firm sent clients a 24-hour hotline number that they could call in the event of an unexpected immigration raid. Employees in such industries as construction, hospitality and healthcare have conducted training sessions or posted placards at front desks so receptionists know what to do—and whom to call—should immigration officials show up unannounced.
Peter Belluomini, a citrus grower in Kern County, Calif., said he temporarily lost about 70% of his harvest crew earlier this month when a local Border Patrol raid prompted many workers to lie low.
“Basically, the word gets out in the community and that part of the labor force gets nervous so they’ll stay home,” he said. Belluomini added that he expected “any disruption would be temporary and short-lived.”
For weeks, companies have tried to anticipate the new administration’s moves. CEOs traveled to Trump’s residence at Mar-a-Lago in Florida to advocate their views, hired new Republican lobbyists for guidance and changed internal policies on such topics as diversity to better position themselves for another Trump term. The onslaught of new policies, though, makes it nearly impossible for companies to anticipate all that is ahead.
“They are preparing, but they don’t know what to prepare for,” said Anna Tavis, chair of the human-capital management department at New York University’s School of Professional Studies, who is in touch with executives across industries.
The deluge of executive orders at the start of new presidential administrations has steadily increased over the past two decades, giving corporate government affairs teams more work to do as each new administration comes into office.
Executive orders have become a popular way for presidents to govern outside the control of Congress. According to data from the American Presidency Project, former President George W. Bush issued an average of 36 executive orders a year when he was in office, compared with the 46 a year that former President Joe Biden averaged. Trump averaged 55 orders a year in his first term.
Despite the blur of day-one actions and the risk of surprise twists, many CEOs are optimistic about the Trump administration’s pro-business agenda. “I do think there is a meaningful amount of optimism,” said Christoph Schweizer, CEO of Boston Consulting Group, who was meeting clients in Davos. While there is still uncertainty, he said there is a sentiment of “control what you can control.”
Emily Glazer, Richard Rubin, Kristina Peterson, Mark Maurer and John Keilman contributed to this article.
