3 Issues for Manufacturers Under the New Administration

The Trump administration is proposing and implementing a wide range of new policies at a rapid pace. Many could have significant repercussions for U.S. manufacturers. Read on to learn about three of the most important areas to watch as the administration moves forward.

1. Potential Tax Law Changes

Many provisions in the sweeping Tax Cuts and Jobs Act (TCJA) enacted during the first Trump administration are set to expire soon. The Republican-controlled Congress is working on legislation to extend or make permanent a variety of provisions relevant to manufacturers.

For example, under the TCJA, manufacturers can claim so-called bonus depreciation on purchases of new or used machinery, equipment, or computer systems. A manufacturer could deduct 100% of the purchase price of qualified property placed in service beginning Sept. 28, 2017, through 2022. The first-year bonus depreciation percentage has dropped to 40% for 2025, but it’s expected that new legislation will return it to 100%.

Also, the qualified business income (QBI) deduction allows business owners of pass-through entities to deduct up to 20% of their QBI. The deduction is currently scheduled to expire after 2025. That would mean the income would be taxed at owners’ individual income tax rates. However, it’s likely that Congress will extend the QBI deduction, or even make it permanent.

Note: Although the current individual tax rates, which top out at 37%, are set to return to their pre-TCJA levels in 2026 (with a maximum of 39.6%), they’re also expected to be extended by Congress.

Manufacturers should pay attention to possible changes in the corporate income tax rate. Trump campaigned on reducing the current 21% rate and eliminating the 15% corporate alternative minimum tax.

2. Targeting of Clean Energy Tax Incentives

The Inflation Reduction Act (IRA), enacted under the Biden administration, created or expanded a variety of tax incentives encouraging renewable energy. They include tax credits for electric vehicles and residential clean energy improvements (for example, solar panels and heat pumps).

The IRA passed with no Republican support, however, and the GOP has had the law in its crosshairs ever since. Since taking office in 2025, President Trump has begun pursuing measures to reduce or eliminate these incentives. In January 2025, he issued an executive order aimed at scaling back federal regulations tied to clean energy tax credits. Additionally, his administration is exploring budget cuts that could target IRA programs to fund broader tax reductions.

These efforts face a hurdle, however. Many clean energy manufacturing projects that rely on the credits are planned or already underway in Republican congressional districts and swing states. The economic benefits of these projects—such as job creation and private investment—have created resistance within the GOP to fully dismantling the law.

Manufacturers should closely monitor legislative developments and administrative actions that could impact IRA tax credits and incentives. Staying informed about state-level policies is also crucial, as some states may introduce incentives to offset federal reductions.

3. Tariffs and Trade Policies

President Trump’s administration has aggressively pursued targeted tariffs as part of its trade policy. In March 2025, Trump expanded steel and aluminum tariffs to 25% for all countries, eliminating previous exemptions. These measures aim to protect domestic industries but have sparked concerns about rising costs for downstream manufacturers and potential supply chain disruptions.

In addition to these tariffs, the administration has introduced the “Fair and Reciprocal Plan,” which seeks to align U.S. tariff rates with those of trading partners by calculating “reciprocal tariffs” based on perceived trade imbalances. The results of this review are expected in April 2025, potentially leading to further tariff adjustments.

Manufacturers should prepare for continued volatility by diversifying supply chains, exploring domestic sourcing options, and monitoring developments under the “Fair and Reciprocal Plan.” Businesses reliant on imports should assess the financial impact of tariffs and negotiate long-term contracts to stabilize costs. Staying informed on trade policy changes will be critical for navigating this evolving landscape.

Navigating the Changes

Policies and laws are changing quickly, with widespread potential implications for manufacturers. Kirsch CPA Group can help you navigate the shifting landscape and make the most of it.

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