Living in a swing state is tough during a contentious election. Over the past few months, I’ve been bombarded with endless political ads, yard signs, mailbox flyers, and door knockers. Now that the dust has settled, I feel relieved that it’s finally over — but as someone who works in regulatory compliance, I’m shifting now to anticipate what the results might mean for the future of supply chain sustainability. I have a few thoughts on this.
Regulatory Growth Under the Previous Administration
When we examine product regulations, it’s clear that regulatory growth under the first Trump administration slowed down but didn’t come to a halt. In fact, the United States ranked second in notifications of technical barriers to trade in 2017 and 2018, and first in 2020, the final year of Trump’s first term. Even during periods of slower regulatory growth, new regulations continued to emerge, especially at the state level.
In short, the regulatory environment did expand between 2017 and 2020 and the government continued to grow, albeit at a much slower pace than during the Biden-Harris administration. Notifications of technical barriers to trade continued to hit record highs globally during this period, especially in the U.S. So, a change in leadership doesn’t mean regulations will vanish overnight.
What to Expect From the New Administration
Having the chance to reflect on the first term of Trump’s presidency gives us some insight into what we might expect in the coming years. However, due to a 60-day statute of limitations on the Congressional Review Act, the new president’s ability to overturn the previous administration’s actions is limited, meaning many of the Biden-Harris regulations will remain in place.
In the realm of product materials compliance, the U.S. federal government hasn’t been a major influencer outside of the Toxic Substances Control Act (TSCA), other than for targeted products such as medical devices or pesticides. This is why many U.S. manufacturers were caught off guard when TSCA Section 6(h) was released in 2021. We lack a comprehensive product regulatory framework — unlike the European Union’s regulatory instruments and CE scheme — as a requirement of market access. The EU requires compliance with a variety of technical regulations, including those prohibiting the presence of certain substances of concern.
Therefore, I don’t anticipate that a change in leadership will significantly alter federal product regulatory obligations or affect companies’ ability to sell products domestically. Most manufacturers are already guided by requirements in the EU — REACH and RoHS have been launching product environmental compliance programs for two decades. Increasingly, U.S. state laws such as California’s Proposition 65 or those associated with PFAS are becoming more influential. In fact, if the federal government slows down on regulating materials, states may ramp up their own rulemaking, as we’ve seen happen with PFAS legislation. Manufacturers must continue to understand their product composition to meet regulations and satisfy growing consumer demands for transparency.
Challenges Facing the EPA & TSCA Implementation
When it comes to the Toxic Substances Control Act (TSCA), the EPA has been struggling with chronic underfunding. Although the EPA’s workforce grew by 9.4% under President Biden, they have fallen behind in their chemical evaluation process under TSCA Section 6, delaying new chemical risk control measures. Administrators also complain of ongoing resource constraints and say the issue has become so acute that they’ve had to delay the reporting window for the TSCA Section 8(a)(7) PFAS reporting rule due to shortages in their IT operating budget.
Many companies are wondering if the PFAS reporting rule will vanish under a new administration. Since it was passed with bipartisan support as part of the National Defense Authorization Act for FY 2020 and signed by then-President Trump in 2019, it would not be easily repealed without congressional intervention.
Supply Chain Sustainability & State-Level Actions
On the supply chain sustainability front, federal regulations have been sparse. The SEC’s final climate-related disclosure rule already excluded scope 3 data before it was challenged in court. We’ll likely continue to see more activity at the state level, such as California’s Climate Corporate Data Accountability Act (SB 253), which will soon impose new climate reporting requirements on manufacturers. However, one area with bipartisan support at the federal level is the focus on forced labor. The Uyghur Forced Labor Prevention Act (UFLPA) passed nearly unanimously in Congress, and President Biden signed it into law in 2021. Today, it maintains bipartisan support with ongoing efforts to increase enforcement.
While the forced labor requirements are unlikely to change or slow down (and indeed, they are spreading to other jurisdictions), companies considering reshoring and near-shoring need to identify and qualify new parts and suppliers carefully to ensure they don’t risk violating the UFLPA or similar forced labor regulations emerging worldwide.
Trade Compliance & Geopolitical Volatility
Lastly, on trade compliance, increased sanctions and tariffs under the new administration are expected. The president-elect was vocal during the campaign about plans to increase tariffs on China to 60% and to reconsider future trade agreements with countries like Mexico and Vietnam, where Chinese manufacturers export products that eventually enter the U.S. However, over the last few years we’ve already seen increased activity in trade regulations due to geopolitical volatility — the wars in Ukraine and the Middle East, for example. So companies already need to be vigilant about these regulations and the complexities of international logistics. Regardless, shipping products and materials over borders will continue to become more expensive, and trade compliance professionals are going to be busy.
Staying the Course: Maintaining Operations Amid Change
Overall, national election results inevitably lead to business changes, and we go through this every two years. But from a product regulatory standpoint, I don’t anticipate the U.S. elections will result in significant shifts in the requirements that impact manufacturers’ ability to sell products in the U.S. I do anticipate changes in trade-related requirements, whether tied to sanctions, tariffs, or forced labor documentation. Manufacturers may find themselves sourcing from new suppliers and/or parts, so additional work may be required to ensure sustainable, reliable, and ethical supply chains. As always, a proactive program that anticipates changes in the regulatory picture are better positioned to comply with international regulations, maintain market access, and meet customer expectations — which often surpass regulatory requirements regardless.
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