The book has closed on the first 100 days of Donald Trump’s second term as president, and if the first few months are any indication, U.S. businesses should prepare for a period of heightened uncertainty — economic, political and regulatory. The Trump administration issued more Executive Orders (EOs) in its first 100 days — 143 — than any previous administration. As historically significant as that number is, it pales when viewed alongside the administration’s other major initiatives — like the massive run-up in tariffs rates or the reorientation of U.S. foreign policy — that have forced businesses to reevaluate their supply chains and cost structures.
The Trump administration has pursued abrupt changes in direction from the previous administration — and, in some cases, from its own initial position — creating a kind of regulatory whiplash that can feel chaotic. Even when in the aggregate the public policy trend seems to be broadly deregulatory, the sheer amount of disruption and opacity tends to induce caution as business leaders brace for the next change. Some enterprises find it impossible to manage risk from this posture; conversely, some arrive at the opposite conclusion: If the federal government is taking a regulatory holiday, who needs the cost of compliance programs?
Neither of these positions is helpful in managing regulatory risk. First, even amid uncertainty, every enterprise should be able to assess and order risks based on frequency and severity. Indeed, it is during uncertain times when such risk assessments become more, not less, important. In other words, now is precisely the time to button up regulatory compliance, both to protect the enterprise and to make the compliance function more efficient. Rapid regulatory change makes this exercise more difficult, but it is not impossible.
Second, much of the administration’s deregulatory agenda has been approached via Executive Orders that merely provide guidance or state priorities for this administration’s agencies to follow. Even if certain EOs survive litigation, absent congressional legislation, they can be revoked or amended by a future administration as easily as they were issued in the first instance. Most businesses plan to be around in 2029 and understand that regulatory compliance occurs on a longer arc than the four-year election cycle. While some may rest easier that the current administration has deprioritized certain kinds of federal enforcement — like the recent EO that disfavors criminal prosecution for strict liability violations — the statutory framework on which the regulatory apparatus rests has been largely untouched by the administration’s actions.
Additionally, the administration has not taken a uniformly deregulatory position across all policy areas. For instance, it is hard to imagine that the administration’s aggressive stance on international trade would not feature an equally aggressive enforcement regime. Likewise, the EO mentioned above features specific carve-outs for immigration and national security violations.
For all these reasons, compliance still matters. For pet food manufacturers looking to strengthen their approaches to compliance in the current environment, the following areas are vital to the effort.
Labor, employment and immigration
Given the heavy reliance of the U.S. agriculture sector and allied industries on immigrant labor, it has been noted that the pet food industry is potentially vulnerable to labor shortages and enforcement raids. Additionally, over and above any deregulatory focus the Trump administration may have, immigration has been a stated focus of attention. Companies should review and update procedures and processes relating to documentation and investigation in the event they are targeted for enforcement.
Trade and supply chains
Likewise, reduced federal regulatory enforcement should not lead companies to scale back their compliance efforts in the areas of trade and supply chains. Regardless of enforcement trends, legal and reputational risks remain significant. Many regulations, such as those governing import/export controls, anti-corruption and product safety, still carry substantial penalties for violations, and enforcement priorities can shift quickly with changes in administration (as we have seen) or public scrutiny.
Additionally, state and international authorities may continue to enforce similar or even stricter rules. Some examples of those can be found in the anti-corruption and anti-human trafficking spaces. While there may be a shift in the U.S. priorities related to the Foreign Corrupt Practices Act (FCPA), the U.K. Bribery Act of 2010 — a comparable and perhaps stricter law than the FCPA — still is in effect for those companies operating in the United Kingdom. Similarly, California, Canada and the U.K. have robust laws related to transparency in supply chains to prevent slavery and human trafficking.
Absent government regulation, companies are also accountable to business partners, investors and consumers who increasingly demand ethical and transparent supply chain practices. Regardless of the current uncertainty at the federal level, maintaining strong compliance programs protects companies from unexpected liabilities, preserves market access, and upholds their reputation in a competitive global marketplace that will extend beyond any one administration.
State regulatory enforcement
Finally, as discussed briefly above, state regulatory enforcement must be accounted for. States possess their own regulatory frameworks and enforcement agencies independent of federal oversight. Indeed, states have robust laws and resources dedicated to enforcing environmental, consumer protection, labor and other regulations. As federal enforcement wanes in certain areas, states may increase their own efforts to fill the gap, maintaining or even intensifying regulatory oversight to protect their residents and interests. So, changes in federal enforcement activity do not directly translate to diminished regulatory action at the state level, as states retain significant authority and initiative to uphold and enforce their own standards.
Although companies may find themselves wondering what the next regulatory update may bring, it will still pay dividends to maintain strong compliance programs. And in the event an enforcement action arises, having procedures to respond to government investigations still will be necessary to navigate those without becoming overcome by them.
