As the new U.S. administration pursues changes around funding, tariffs, and other key policy areas, the implications for businesses are significant and complex. Understanding these changes, and developing strategies to navigate them, is crucial for maintaining business continuity and growth.

CohnReznick recently brought together panelists from law firms and private investment/banking, joining our own industry leaders, to discuss key areas of focus for this new administration and their implications, including: 

• Brian Gardner, Chief Washington Policy Strategist, Stifel Financial Corp.
• Laura Siegel Rabinowitz, Shareholder, Greenberg Traurig, LLP
• Richard Meene, Principal, Government Contracting, CohnReznick
• Jeremy Swan, Managing Principal, Financial Sponsors & Financial Services, CohnReznick
• Michael W. Robinson, Managing Director, ICR Inc. (moderator)

Below, you’ll find highlights from their conversation on key themes and strategies for navigating them. Watch the full webinar(Opens a new window)(Opens a new window)(Opens a new window)(Opens a new window) for more key insights and guidance for your organization in this time of change.

Which of the following areas of evolving policy and priorities are creating the biggest uncertainty for how you manage your business?

Key policy areas, their impacts, and strategies for uncertainty

Trades and tariffs

The administration's trade policies are fluid, with additional tariffs taking shape on products from China, Mexico, and Canada; steel and aluminum; and proposed reciprocal tariffs. These measures, if enacted, are expected to have broad and deep impacts on industries reliant on imported raw materials and components. Companies need to gain visibility into their supply chains, conduct risk analyses, and consider duty mitigation strategies to navigate these changes effectively. 

Key strategy: 

• Diversify supply chains: Diversify your supply chains to reduce dependency on specific countries or regions. Understand the origins of your products and explore alternative sources to mitigate risks. 
• Streamline cost structures: Analyze and streamline your cost structures to improve efficiency and resilience. Consider re-negotiating production agreements and exploring duty mitigation strategies. 
• Dive deep into third party relationships: Understand the potential tariff or trade risk issues of the entire supply chain, not just the suppliers you deal with directly (level 1 suppliers). It’s now necessary to also understand any potential tariff and trade risks that the companies supplying the components/ingredients/etc. may have.

Federal funding and grants

Significant cuts to federal funding have implications for businesses and nonprofit organizations alike. The administration has recommended cuts to discretionary spending across various agencies, leading to the termination of numerous contracts and grants. Impacted organizations need to shore up their working capital, understand their grants and contract terms, manage people resources to minimize business interruption, and capture costs associated with stop-work and termination to maximize recoveries from government contract cancellations. 

Key strategy: 

• Prepare for terminations: If your organization relies on federal contracts or grants, be prepared for potential terminations. Assess your awards to identify those at risk for termination and plan for the disruption to supply chains and people resources that program cancellations can create. Capture detailed costs associated with stop-work and termination, and communicate with your stakeholders (customers, clients, constituents) and termination officials. 

Inflation and interest rates

Fluctuations in inflation and interest rates significantly impact mergers and acquisitions (M&A). The uncertainty surrounding tariffs and their effects on inflation has led to a slowdown in transaction activity. Businesses need to understand their trade risks, assess the impact on their financial models, and be flexible in their strategies to adapt to the changing environment. 

Key strategy:

• Conduct risk analyses: Assess the potential risks to your business from changes in trade policies, inflation, interest rates, and federal funding. Identify areas of vulnerability and develop contingency plans. 
• Understand trade risk: More stringent due diligence is required whether you’re buying a business, selling, or seeking investment. Gaining a thorough understanding of the impact of trade regulations by jurisdiction, as well as the potential tariff impact on pricing, supply chain, and customer demand, are critical to understanding financial impact to a business. 

Antitrust and regulatory enforcement

The state of regulatory agencies and antitrust enforcement has evolved, with a focus on scrutinizing mergers and acquisitions more closely. The tech sector, healthcare, and financial services are expected to face increased scrutiny. Businesses need to stay informed about regulatory changes and understand the implications for their operations. 

Key strategy:

• Engage with regulatory agencies: Monitor regulatory changes and maintain contact with relevant agencies to understand implications for your business. Seek professional insight/guidance to navigate complex regulatory environments.

Staying resilient

The new administration's policies and priorities present both challenges and opportunities for businesses. By staying informed, conducting thorough risk analyses, and being proactive in their strategies, businesses can best navigate the evolving landscape and position themselves for success.  

For a deeper dive, watch our on-demand webinar, “New administration policy & priorities: Strategies to consider right now.(Opens a new window)”