President Donald Trump’s quick suspension of new federal regulations has triggered some unintended consequences: sudden pain and deeper uncertainty for a broad array of U.S. businesses.
Oil and gas companies, ethanol producers, real estate agents and small farmers are among those that could be hurt by the regulatory freeze. Some are lobbying to preserve regulations that Trump put on hold.
“I want him and whoever’s in his Cabinet to look at what the rules are saying,” said Eric Hedrick, a West Virginia chicken farmer trying to save an Obama-era rule. “Don’t just say that it’s another regulation. Look at what it says. Look at what the rule will do for farmers and ranchers across the country.”
The sweeping executive order, signed hours after the president’s inauguration, was intended to help American businesses by halting rules developed in the waning days of the Obama administration. Trump later vowed to cut regulations by 75 percent.
While many businesses are cheering Trump’s sprint to deregulate, the reaction from some corners of the business landscape underscores how complicated the issue is. For every government regulation, there are winners as well as losers.
Trump’s moves have also created uncertainty, the one thing corporate executives curse even more than government interference.
The administration’s first week has shaken foundations companies have been building on for decades. FedEx Corp., John Deere and Hollywood were among the big losers when Trump torpedoed TPP this week. Target, Wal-Mart and other big retailers that depend on imports are struggling to decipher the president’s statements on a border tax, which could force them to raise prices they charge to customers.
“Disruption has come to Washington in a big, big way, in a way we’ve never seen before,” said Matthew Shay, president of the National Retail Federation. In a speech to NRF members last week, Shay called the border tax “potentially disastrous.”
The National Association of Realtors, whose 1.2 million members lean Republican, was the first group to feel the pain of Trump’s regulatory freeze. Just hours after being sworn in as president, even before issuing his broad executive order on regulation, Trump rolled back an Obama plan to lower costs for some homebuyers.
The $831 billion mortgage insurance industry rejoiced. But real estate agents hold out hope that the reversal at the Federal Housing Administration is temporary. They are making their case to the public and to Trump.
“We believe that the benefits of the mortgage insurance premium cut will shine through during this review period so it can be quickly put back into place,” NAR President William Brown said.
A renewable-fuel market indicator had its biggest one-day drop in more than six weeks after the EPA said it would delay standards for adding biofuels to the U.S. gasoline supply.
Houston-based Westlake Chemical Partners notified shareholders that the president had suspended a tax rule favorable to the business. Other companies might get tax relief — a plan to raise estate taxes on certain businesses was suspended, too.
“It can be exhilarating for certain businesses who can see the prospect of drastically reduced burdens. But it’s also unsettling,” said Philip Wallach, a senior fellow at the Brookings Institution. “Trump is Mr. Wild Card.”
Some financial firms are also in the line of fire.
The Labor Department's so-called fiduciary rule, which would require brokers to act in their clients’ best interest when offering retirement investing advice, may also be in jeopardy.
While many insurers, mutual funds and brokerage firms have fiercely resisted the rule, which will limit their sales practices, some businesses want it to stay in place. Many firms already have spent money to offer the passive, low-cost retirement savings products that the rule encouraged and that customers are increasingly demanding.
The rule "has some very great components to it,” said BlackRock Chief Executive Officer Larry Fink said on a Jan. 13 earnings call.
Other financial companies are eagerly awaiting the repeal of key parts of the 2010 Dodd-Frank Act, a far-reaching financial industry overhaul Trump has vowed to dismantle.
But some businesses have benefited from the law, including Intercontinental Exchange Inc. The Atlanta-based company operates exchanges — including the New York Stock Exchange — and clearinghouses for derivatives, which were boosted by Dodd-Frank’s requirement that more derivatives be cleared through them.
In West Virginia, Hedrick, a Trump supporter, was put in limbo by the president’s memorandum on rules, which blocked a regulation born of an eight-year fight between small farmers and big processors like Pilgrim’s Pride and Tyson Foods.
The farmers won and the Department of Agriculture updated a Grain Inspection, Packers & Stockyards Administration regulation, the GIPSA rule, making it easier for small farmers to sue the big poultry processors they partner with.
Regulations, Hedrick said, aren’t always bad for business.
“He said he was going to help fight for the little guy, that these big corporations and stuff were just running rampant,” Hedrick said of Trump. “It’s not a Republican thing, it’s not a Democratic thing. It’s a right and wrong thing.”
The Trump administration blocked the GIPSA rule this week along with hundreds of others. Now the chicken, pork and beef industries are fighting to kill it outright.
“We’d be happy to see this go away permanently,” said Tom Super, vice president of communications for the National Chicken Council. “This midnight regulation was really a gift to the trial lawyers on the way out the door.”
Tony Romm and Patrick Temple-West contributed to this report.