Flipped: the impact of a new political landscape
This week, the NLBMDA hosted a webinar titled “Post-election analysis and 2025 outlook” that featured Stephanie Badger (VP, The Nickels Group), Rachel Kelley (VP of legislative affairs, Mortgage Bankers Association) and Alex Strong (senior federal legislative director, NAHB).
The webinar, hosted by Jonathan Paine (NLBMDA president) and Matthew Delaney (NLBMDA’s government affairs coordinator), covered a range of topics of particular interest to small business owners of all stripes—but especially those in the worlds of lumber, hardware and building supply.
The session opened with a quick recap of the U.S. political landscape heading into 2025. In the Senate, Republicans have flipped four Democratic seats to retake its majority that was lost in 2021. Meanwhile, Republicans also maintain a thin House majority though Dems retook N.Y. and Calif. seats lost in 2022.
And, of course, there is Donald Trump himself, along with all those appointees filling up his cabinet.
The big question is: What effect will these political shifts and the new administration have on crucial issues pertaining to housing, immigration and red tape for small businesses?
The panel opened with a brief reminder that the Corporate Transparency Act (CTA), which would have required nearly 33 million U.S. business entities to disclose its "beneficial owners" to the Treasury Department before 2025, was still blocked. It is still subject to change, but “As of today, you don’t have to do anything to comply with CTA. There are no legal ramifications or penalties,” said Paine.
The discussion then turned to forecasts on what action the panelists see unfolding in the early days of the Trump administration. Badger, who specializes in financial services and antitrust issues, says the first 100 days of the administration will be consumed with confirmation hearings and budget reconciliation activity. Though that doesn’t mean there will be a shortage of action to follow.
As for all the big talk about tariffs, tax and trade disputes, Strong says there are limits on what Trump will be able to implement out of the gate. Regarding the looming tariff issue, which Trump has indicated he’d use as leverage against the likes of Mexico, Canada and China, Strong says: “This doesn’t just apply to Canadian softwood lumber but potentially to the full scope of building materials.” Strong says there’s a “wide array of tariff options available” for the incoming administration, though all of which have different processes for being enacted. Not many of which can be implemented unilaterally, but Strong says the president has “latitude” with 301 and 232 tariffs, for example. “We’ll be interested in what the administration can do unilaterally,” he says.
Overall, the panelists conveyed that it should be a more de-regulatory environment moving ahead—which will hopefully clear a path for more homebuilding activity throughout the U.S.
One potential caveat: What role will, if any, will the Elon Musk-led DOGE committee play in slashing federal spending?
Another issue the NLBMDA is watching closely is the Credit Card Competition Act (CCCA), which Badger says has recently “seen a lot of bipartisan momentum.” She says retailers are starting to “win the credit card wars” against ever-steeper swipe fees. She says Josh Hawley, in particular, has been an advocate for this legislation, as he recently went viral for grilling Visa and MasterCard execs over their ballooning profit margins. “We’re excited about what the next Congress brings for the CCCA,” Badger says.
More on tariffs
When asked about the potential for further tariffs against Canadian lumber, which could heavily affect lumber prices in the U.S., Strong doesn’t see the feud ending anytime soon. “The parties are too far apart right now, and they’re not talking.” He adds that new tariffs do appear likely with the new administration. “We believe, anecdotally, we’ll see those rates and duties go up even more.”
Couple that with Trump’s indication regarding a universal baseline rise in tariffs, and Canada may be forced to come to the table to strike a deal sooner than later, Strong says.
However, Kelley, who was extensive Capitol Hill credentials and expertise, believes the tariff talk may be largely about leverage.
“I believe the tariffs are largely a negotiating tool,” she says, adding, “Ultimately, I don’t believe Trump and his advisers will do anything extreme in this regard that could ultimately raise prices for American consumers.”
Despite the bluster and tough talk, Trump has invited Chinese president Xi Jinping to his inauguration (though he’s unlikely to attend, apparently).
Overall, Kelley sees favorable economic conditions ahead. “We are seeing greater optimism and investment around the U.S.,” she says.
Looming mass deportation and border control measures
The Trump administration’s plan for immigration is another X factor to watch closely in coming months. Strong says it’s “one of those unknowns that’s keeping our economists up late.”
He notes that more than 30 percent of U.S. construction workers are foreign born, and that any sweeping immigration crackdown could be devastating for U.S. home building. “We simply don’t have a robust enough pipeline of domestic workers.” Anxiety regarding the administration’s planned mass deportations could add a huge strain on the U.S.’s housing shortfall, which would also exacerbate rising costs and affordability.
However, the panel expressed hope that the incoming administration would be homebuilder-friendly.
“We’ll be very supportive of any domestic workforce development measures,” Strong shared, who adds: “Broadly, we know what the problem is. Supply is inefficient to meet demand. We’re dramatically underbuilt. Anything we can do to build more homes will eat into the affordability issue.”
Takeaways for 2025
The panelists added their key takeaways as we had into the new year.
Badger shared: “The most important thing is to remain involved. Your voices do weigh heavily on the minds of legislators. Reach out to them, because they do need to hear about your priorities.”
Kelley echoes that sentiment, adding that there are many new and incoming lawmakers. “These members don’t know the issues like you do, and no one knows your story like you. So be proactive about reaching out with information about your industry. Stay involved, and make sure your voice is heard,” Kelley says.
Strong adds: “Grassroots efforts matter, and they can make a big difference.”