Election analysis: What President-elect Trump’s victory means for the future of American infrastructure investment

For infrastructure investors, the results of the U.S. elections mean Republicans can put their stamp on President Biden’s signature infrastructure laws including the Infrastructure Investment and Jobs Act (IIJA), the Inflation Reduction Act (IRA), and the CHIPS and Science Act (CHIPS) as the next Congress takes up the expiration of the Trump-era Tax Cuts and Jobs Act (TCJA) in 2025 and reauthorization of the IIJA in 2026.   

We take a first look at the positions and policies of President-elect Trump, as well as the leadership of the key committees in the House and Senate that will determine the future of U.S. infrastructure investment.

President-elect Trump has indicated a desire to dismantle several of President Biden’s initiatives, including parts of the IIJA, IRA, and CHIPS Acts. He is also eager to roll back regulations, pursue a tax regime that supports U.S. corporations, develop a trade policy of high tariffs to encourage and promote U.S. manufacturing and foster traditional industries such as oil and gas.

However, dismantling the IIJA, IRA, and CHIPS may prove challenging. Republican-leaning states and districts have benefitted from many projects and are the recipients of more than three-quarters of the $268 billion in clean energy investments announced thus far. Such benefits make the IRA and IIJA appealing to voters and Republican members of Congress.

Trump can immediately leverage his influence by managing how his administration handles various programs. This could include reallocating funds within existing frameworks, streamlining regulations to speed up project approvals, emphasizing public-private partnerships (P3s), focusing on energy infrastructure such as pipelines and refineries, and potentially directing funds towards border infrastructure as part of his broader immigration policy.

The following provide a more detailed look at some of Trump’s infrastructure priorities:

• Streamlining regulations: Trump will reduce bureaucratic red tape to expedite infrastructure projects and help speed up the construction and repair of roads, bridges, and other critical systems. He will undoubtedly target the National Environmental Policy Act (NEPA) as he did back in 2020 to facilitate more efficient, effective, and timely NEPA reviews by federal agencies.

• Rolling back the IRA: Trump’s ability to change the IRA will be hindered by the fact that more than three-quarters of the Act’s announced clean energy investments went to Republican districts. He is likely to repeal certain provisions in the IRA to help pay for the cost of extending or making permanent the Tax Credits and Jobs Act (TCJA), which will expire in 2025. The IRA tax credits most at risk include 30D Clean Vehicle, 45 Y and 48E Clean Electricity PTC and ITC, 45Z Clean Fuel PTC, and 40B Sustainable Aviation Fuel (SAF).

• Public-private partnerships (P3s): The first Trump administration endorsed P3s as part of its infrastructure strategy, with the White House stating that “every federal dollar should be leveraged by partnering with state and local governments and, where appropriate, tapping into private sector investment”. While Trump did pivot away from this stance on P3s during his first term, telling members of Congress “they are more trouble than they’re worth,” the President’s infrastructure playbook will have to include P3s as a necessary ingredient to bring down the federal debt, modernize infrastructure, and unlock the private sector.

• Energy infrastructure: The Republicans will focus intensely on expanding and modernizing pipelines, refineries, and energy distribution networks, and cut back on renewables such as offshore wind.A Trump-led Environmental Protection Agency (EPA) will reverse much of the activity by the Biden Administration, much as it overturned Obama-era regulations designed to reduce carbon emissions from power plants in 2019 and weakened vehicle emissions rules in 2020.

• Reforming the CHIPS Act: Trump has expressed dissatisfaction with the CHIPS Act and suggested that tariffs should replace federal subsidies for chip manufacturing. However, CHIPS remains popular in both parties as is widely seen as asserting U.S. leadership in the global AI race. Along with the IIJA, it is unlikely to be targeted by Republicans in Congress in the same way as the IRA will be.

• Trade policy: Trump will continue using tariffs to help implement his ‘America First’ economic policy. He has called for sweeping tariffs between 10% and 20% on all U.S. imports and 60% from certain competing countries. His focus on American energy dominance will likely include removing LNG export authorization restrictions and reverse the sustainable steel and aluminum policies put forward under Biden. Even with more friendly trading partners like the EU, Trump may use the threat of tariffs to seek carve-outs on the EU Carbon Border Adjustment Mechanism (CBAM).

• A federal sovereign wealth fund: Trump has mentioned the merits of creating a federal sovereign wealth fund like those in China, Russia, and Saudi Arabia. For example, the revenues from his tariffs program could be used for infrastructure investments. However, economic advisors have expressed pushback on this idea, and it is likely that any proposal would face significant scrutiny in Congress.

• Extending TCJA provisions: Trump has asserted that the costs of extending the existing TCJA provisions do not need to be offset because of the economic growth effects of tax cuts. While the corporate income tax rate does not expire, Trump would like to reduce it to 15%, but only for companies that make their products in America. Additionally, Trump is not expected to support the international tax changes covered under the TCJA, and the United States’ continued participation in and support for negotiating and implementing the 15% global minimum tax agreement.   
• Tax-exempt municipal bonds: With the expiration of many TCJA provisions in 2025, a Trump administration may look to offset the costs of an extension by eliminating or limiting tax-exempt municipal bonds. This would produce significant revenues for the federal government but increase the cost of borrowing for U.S. cities and towns and fundamentally alter the way infrastructure is financed in the U.S. 

Committee leadership

Although Senate Republicans will choose a new leader, committee Republican leadership will remain largely the same but include a notable shift in favor of using P3s to help fund infrastructure.

House Committee on Transportation and Infrastructure

Chair of the House Transportation & Infrastructure Committee, Sam Graves (R-MO), is likely to seek an extension of his leadership term, which is set to expire at the end of this Congress.  Graves has consistently advocated for bipartisan approaches to tackle infrastructure challenges. His agenda emphasizes the need to reduce regulatory obstacles and streamline permitting processes, aiming to accelerate project approvals and reduce bureaucratic inefficiencies.

Graves is also a proponent of innovative funding strategies, particularly public-private partnerships, to attract private sector investment in infrastructure projects. A significant focus of his leadership is ensuring that rural communities receive adequate attention and resources for their infrastructure needs, including roads, bridges, broadband, and other critical systems.

Senate Environment and Public Works (EPW) Committee

Senator Shelley Moore Capito (R-WV) will continue to spearhead Republican efforts on this committee. Her infrastructure priorities center on modernizing and investing in transportation systems, particularly enhancing safety, efficiency, and mobility across highways, roads, and bridges.

Capito shares Graves’ support for P3s and advocates for reducing regulatory burdens to expedite project approvals and completion. She places a strong emphasis on addressing the unique infrastructure challenges faced by rural areas, including the expansion of broadband access to foster economic growth and connectivity. In this respect, she will likely lend her support for the continued rollout of the Broadband Equity Asset Deployment Program (BEAD). Capito’s approach also incorporates environmental considerations to balance infrastructure development with sustainability goals.