Trump’s First 100 Days Sow Regulation Uncertainty for Companies

The Trump administration’s slashing of tens of thousands of federal jobs in its first 100 days is scrambling plans for companies and industries that look to agency staff for help navigating regulations and securing funding.

Funding freezes, workforce reductions, and policy shifts have business leaders delaying investments and preparing for less oversight from federal regulators, according to industry representatives and lawyers.

“The number and frequency of announcements in the administration’s first few weeks overwhelmed a lot of people, and companies were not immune to that,” said Kevin Minoli, a partner at Alston & Bird LLP and former acting general counsel at the Environmental Protection Agency.

The impact ranges from farmers pausing investments to drugmakers battling delays in approvals to a notable slowdown in enforcement in areas like employment discrimination and consumer finance complaints.

Trump promised to boost the US economy by eliminating regulations, but staffing changes at the agencies that enforce those rules are making it harder for companies to benefit immediately from that promise, economists said.

“None of these things are positive in the short-term” for investment, said Chris Low, chief economist at FHN Financial.

Food and Drugs

Staff cuts have so far spared product reviewers at the Food and Drug Administration, but slashed the managers who helped coordinate between reviewers and drugmakers seeking approvals for their clinical trials.

“You’re now in a situation where you don’t know who to call,” said Rachel Turow, head of FDA regulatory practice at Skadden Arps Slate Meagher & Flom LLP.

Some in the food industry are struggling just to confirm where the cuts occurred, information that could help pinpoint the safety programs at risk. Layoffs at one FDA lab shut down a quality control program for milk and other dairy products.

“Those of us who work on food safety, specifically salmonella contamination, are trying to be vigilant and understand where those cuts have been made,” said Sandra Eskin, CEO of Stop Foodborne Illness and a former FDA official during the Biden administration. “The lack of transparency is frustrating.”

Agriculture

The USDA dismissed about 6,000 employees in February, then was ordered to reinstate them. That order expired in April, creating the possibility the agency will fire them again.

The merry-go-round stalled decisions for farmers like Jake Kornfeld, a vegetable farmer in Vermont.

Kornfeld, a member of the National Young Farmers Coalition, delayed investing in a greenhouse structure for this growing season, after a Trump executive order set up a new process to vet millions in contract and grant payments. Kornfeld was unsure if the process would change his eligibility for funding.

Completing such reviews now falls to a workforce already depleted by layoffs, resignations, and retirements.

Farmers are also concerned about the administration’s proposal to close Natural Resources Conservation Service offices, which provide grants especially critical to small or new farmers, he said.

“Our ability to get in touch with them and have them come out and certify our crops and stuff like that would definitely slow down,” Kornfeld said.

Employment

The Labor Department faces expected workforce reductions, with the agency already ceasing investigations into federal contractor discrimination.

Trump issued an executive order ending most authority for the DOL’s Office of Federal Contract Compliance Programs, and the majority of that agency’s staff across multiple regions is on administrative leave.

“What I’m seeing really is just a general slowdown in enforcement, most prominently, and obviously, that’s the closure of all the OFCCP activity,” said Timothy Taylor, an employment and litigation attorney at Holland & Knight LLP.

But enforcement in other key labor areas like workplace safety and wage and hour compliance is expected to return to normal levels once the agency completes major structural and personnel changes.

“That doesn’t necessarily mean less enforcement or less effective enforcement simply because you have fewer people, but it does mean that they’re probably having to realign and reassess,” said Taylor, a former deputy solicitor of labor.

Finance

Attempts to slash staff at the Consumer Financial Protection Bureau sowed chaos within the agency, but consultants note that its laws are still on the books and there’s no guarantee enforcement will disappear.

State attorneys general have the power to enforce laws such as the Equal Credit Opportunity Act and the Fair Credit Reporting Act, and have been aggressive in their oversight, said Joann Needleman, the leader of Clark Hill PLC’s financial services and regulatory compliance practice.

“I tell people to do what you’re doing, and document very well,” she said.

But with the CFPB sidelined, banks and other companies may begin to slip, said Allison Schoenthal, the co-chair of the banking and consumer financial services practice at Goodwin Procter LLP.

“I wonder how much clients will listen to us saying, ‘regulators are looking at issues’ without regulators looking at issues,” she said.

At the Securities and Exchange Commission, the impact is still evolving. The SEC hasn’t yet enacted a full-scale reduction in force, but personnel from the Elon Musk-led Department of Government Efficiency have asked staff to contribute ideas for streamlining agency operations.

More than 10% of the SEC’s total workforce had already taken buyout and deferred-resignation offers as of late March, with the divisions of enforcement, exams, and office of the general counsel hit particularly hard.

The losses might not resonate too much as the commission narrows to what it might see as “the core focus–matters that really involve significant investor harm,” said Tom Bednar, a partner at Cleary Gottlieb Steen & Hamilton LLP and former SEC enforcement trial lawyer.

Changing priorities around crypto and foreign bribery enforcement—as well as an about-face on environmental, social, and governance disclosure requirements— could also free up regulators and firms to focus resources on a smaller set of Trump-era compliance goals.

Companies are also trying to determine if interactions with the SEC “becomes a matter of personal deal-making and transactional politics,” Bednar said, “the way some perceive other parts of the government to be right now.”