Donald Trump’s re-election has had a profound effect on global markets, reshaping corporate priorities, regulatory landscapes and international trade. In our latest free report, we take a look at his influence, from the rapid abandonment of Diversity, Equity, and Inclusion (DEI) initiatives by major US firms, to the downplaying of climate change and ESG concerns, aggressive tariff policies and a sweeping rollback of regulatory oversight.
DEI abandonment
Trump has led a coordinated attack on diversity, equity and inclusion (DEI) initiatives across federal agencies in the US, claiming DEI programmes are “illegal and immoral” and discriminate by offering preferential treatment based on gender and race, rather than merit.
In January 2025, he signed two executive orders focused on undoing years of DEI initiatives in federal agencies that were put in place to foster workplace inclusivity. The directives also took aim at the private sector by instructing federal agencies to develop initiatives to deter DEI measures in the private companies they have contracts with.
Many private sector firms are being pressured by conservative think tanks to scrap DEI programmes, or face litigation. Apple was recently targeted by the National Center for Public Policy Research — a conservative lobbyist group — due to its decision to maintain its DEI initiatives, despite many tech firms choosing to scrap theirs due to political pressure. Apple announced to shareholders in February that it had rejected the anti-DEI proposal made by the group.
Costco has also so far remained defiant in the face of similar anti-DEI proposals. “The company’s shareholders overwhelmingly voted to reject a proposal that would have obligated the company to review the potential risks of maintaining its DEI initiatives, with more than 98% of shareholders voting against the proposal,” said Forbes. But with increasing political pressure for firms to overhaul — or remove — their DEI policies, what does the future look like for DEI and what are the potential risks presented by these changes?
Banks and DEI
Several banks have already removed all mention of DEI from their websites and annual reports, including JPMorgan. In December 2023, the bank included metrics on DEI in its annual regulatory filing to the SEC, and talked about its “focus on its culture of inclusion and respect, which is reinforced by its Code of Conduct and by increasing employee awareness, education, communication and training.” It added that an essential part of this was JPMorgan’s Business Resource Groups; groups of employees who “support JPMorgan Chase’s diversity, equity and inclusion strategies by leveraging the unique perspectives of their members.” It also said “The Firm has global Diversity, Equity & Inclusion centers of excellence that lead the Firm’s strategy in supporting its commitments to create more equity and lasting impact in communities, and strengthen its inclusive culture.”
But its latest regulatory report was distinctly lacking in this type of language and did not mention DEI at all, except to say it expects to continue to “be criticised by activists, politicians and other members of the public concerning business practices or positions taken by JPMorganChase with respect to matters of public policy (such as diversity, equity and inclusion initiatives).” JPMorgan’s messaging on DEI has been a little contradictory, with CEO Jamie Dimon recently publicly confirming in an interview with CNBC that the bank would be continuing with its DEI commitments ー despite a clear change to messaging in documentation.
Other banks have also begun to reduce public mentions of DEI, including Citi and Morgan Stanley, Bank of America and Wells Fargo, according to reports. Earlier this year, Goldman Sachs scrapped a diversity rule it’s had in place since 2020, barring it from advising all-male, all-white boards on company flotations. A Goldman Sachs spokesperson said: “As a result of legal developments related to board diversity requirements, we ended our formal board diversity policy.” Goldman Sachs CEO Richard Gnodde told BBC News the decision was made because the rule had “served its purpose” and had already driven a change in behaviour.
A First Amendment right
Declaring that something such as a DEI programme is now illegal isn’t quite that simple ー even if you’re president of the United States. With the Republican Party holding majorities in both the House and Senate, there is potential for legislative efforts to further restrict DEI programmes in the private sector. However, such measures will likely face considerable legal challenges on grounds related to corporate free speech and employment protections.
“Core federal and state equal employment opportunity (EEO) laws have not changed,” write Joan Williams, Laura Maechtlen and Jamie Dolkas in a report for the Harvard Business Review (HBR). “Trump’s executive orders did end federal contractor affirmative action programmes and Trump can direct federal employees to take certain actions against ‘illegal’ DEI policies and programmes. But what is ‘illegal’ under core EEO laws today hasn’t changed from before President Trump took office. This highlights that what companies are concerned about is not entirely legal risk, but regulatory and litigation risk…companies have a First Amendment right to express their views on DEI. This right was affirmed in the spring of 2024 by a conservative-leaning panel of judges of the Eleventh Circuit, which struck down Florida’s prohibiting companies from expressing certain ideas in DEI trainings.”
But, would it be easier for firms to simply scrap all DEI-related programmes from their agenda? Not necessarily, argues the HBR report. It looks at ways firms can minimise the exposure of their DEI efforts, for example by not using the term “DEI” and instead using other related words such as “belonging,” allowing them to benefit from the untapped talent afforded by DEI programmes and maintain their brand and reputation, particularly in the eyes of younger applicants. The report adds that other companies who have expressed concerns about an employee backlash to removing DEI have said they have no intention of changing the name of their initiatives. “The decision [on how to approach the issue] depends on your appetite for reputational and regulatory risk.”
| Examples of current DEI-related litigation American Alliance for Equal Rights versus Fearless Fund A conservative group, the American Alliance for Equal Rights (AAER), sued the Fearless Fund, a venture capital firm that provides grants to black female entrepreneurs and other under-resourced individuals. The lawsuit argues that the fund’s grant programme violates Section 1981 of the Civil Rights Act of 1866, which prohibits racial discrimination in contracts. A federal appeals court temporarily blocked the programme, suggesting that race-based corporate initiatives may face legal challenges going forward. Lawsuits Against Law Firm DEI Fellowships The AAER has also sued prominent law firms like Perkins Coie, Morrison Foerster and Winston & Strawn, alleging that their diversity fellowships (which are designed to support underrepresented racial groups) violate anti-discrimination laws. American First Legal versus Apple On March 8, 2025, America First Legal, co-founded by Stephen Miller, a senior advisor to Donald Trump, filed a complaint against Apple, alleging that the company’s DEI programmes violate federal law. |
Scrapping DEI could be seen by some as a potential opportunity to relieve some of the growing regulatory burden on firms and even save money. But firms should be mindful of being short sighted. Many companies rushed to implement DEI initiatives after the death of George Floyd led to mass Black Lives Matter demonstrations ー and are now acting with similar hastiness in reaction to Trump’s DEI purge. “In the urgency of the moment [after the death of George Floyd] companies often prioritised optics over strategy,” Amira Barger, a professor of communications and change management at California State University, told Reuters. “Diversity roles were created, but without the support, budget or infrastructure needed for success … Real DEI work requires long-term commitment, not just a moment of reckoning.”
The evolving political and regulatory landscape around DEI presents a complex challenge for firms having to navigate the balance between complying with new political pressures and maintaining long-term, genuine efforts toward inclusion. As litigation looms and public opinion shifts, businesses will need to carefully weigh the reputational, regulatory and operational implications of their DEI strategies.
Climate change and ESG issues
Climate change has always been a key campaign topic for Trump and is one of his most divisive. One area that will be impacted by his policies is green finance and how companies approach their carbon-neutral obligations.
In January 2025, Trump signed Executive Order 14162, titled Putting America First In International Environmental Agreements, which directed the immediate withdrawal of the US from the Paris Agreement and related international climate commitments. This withdrawal marked the second time the US had exited the accord under Trump’s leadership, signaling a shift away from international climate collaboration. His administration has moved to dismantle domestic climate initiatives, such as the Clean Power Plan, which aimed to reduce carbon emissions from power plants. These policy reversals have created uncertainty in the green finance sector, potentially deterring investment in renewable energy and other sustainable projects.
The administration’s attempts to halt climate research funding have faced legal obstacles. A federal judge recently demanded evidence from the Environmental Protection Agency (EPA) to justify the cancellation of US$7bn in climate research grants, highlighting the judiciary’s role in scrutinising such policy changes.
Former US climate envoy John Kerry emphasised that investing in renewable energy is crucial for maintaining US competitiveness, particularly against China’s dominance in the global energy market. He argued that despite policy rollbacks, the transition to a low-carbon economy is driven by market forces and corporate commitments to net-zero emissions, suggesting that green finance will continue to grow. While Trump’s policies have introduced challenges to green finance by withdrawing from international agreements and rolling back domestic climate initiatives, these actions have not entirely halted progress in the sector.
However, since Trump’s re-election, several major banks have scaled back their carbon-neutral initiatives, reflecting a broader shift in the financial industry’s approach to climate commitments. In late 2024, JPMorgan Chase, Citigroup, Bank of America, Goldman Sachs, Wells Fargo and Morgan Stanley all exited the Net-Zero Banking Alliance (NZBA), a coalition committed to achieving net-zero greenhouse gas emissions by 2050. BlackRock, the world’s largest asset manager, also withdrew from the NZBA, citing legal pressures and political scrutiny as influencing factors.
HSBC has delayed its target for eliminating carbon emissions from its operations by 20 years and altered its methodology for measuring emissions from client loans. The bank’s internal reports have seen a significant decrease in climate-related terminology, reflecting a shift in focus. The NZBA, having lost several of its members, is also reportedly contemplating revising its climate pledges. A proposal under consideration suggests aligning with the broader Paris Agreement goals, moving away from the stricter 1.5°C warming limit. This potential shift aims to retain existing members and attract new ones, especially from regions like Asia.
All of this suggests a global slowing down of corporate responsibility in the area of climate change. Financial institutions and major corporations have a vital role to play in ensuring carbon neutral targets are met, but without the support and oversight of governments, this will never be achieved. “Irrespective of how one aligns politically, the case for pursuing a thriving low-carbon economy has never been stronger, both scientifically and economically,” Joeri Rogelj, Director of research at the Grantham Institute, told Carbon Brief. “Scientifically, we understand how the extreme weather we have seen over the past years is of our own making, a result of the world’s greenhouse gas emissions…Political decisions that disregard evidence…will be harshly course-corrected by the hard physical reality of climate change.”
Tariffs
One of Trump’s weapons of choice in his campaign to “make America great again” is import tariffs. Since he took office in January, he has signed executive orders imposing a 25% tariff on all goods imported from Mexico and Canada;10% tariffs on Canadian energy exports, including electricity, natural gas and oil; a 10% tariff on Chinese goods, supplementing existing tariffs of up to 25%; tariffs on US$20bn worth of EU goods, including a 25% tariff on steel and aluminium imports and potential 200% tariffs on European alcoholic beverages.
Impact on the USD
Trump’s tariffs have had a mixed impact on the US dollar (USD). Initially, it strengthened due to reduced import demand and investor flight to safety. However, over time, trade uncertainty, Fed rate cuts and economic slowdowns have weakened the dollar (down 6% from a two-year peak in mid January). Retaliatory tariffs reduced foreign demand for US exports, further lowering USD demand. Global markets adjusted, with some countries diversifying away from the dollar. While tariffs disrupted trade, they also increased financial risks, raising loan default risks for banks exposed to trade-dependent businesses, especially in manufacturing and agriculture.
Impact on banking
Looking at the financial sector specifically, businesses reliant on international trade (such as manufacturers sourcing parts from China or exporters to Canada and Mexico) may see higher costs or lost sales and if these businesses cannot pass costs to consumers, profits are likely to shrink, increasing their default risk on loans. Banks with high exposure to these businesses will be at risk.
Tariffs also create uncertainty ー especially when the person implementing them is so unpredictable ー discouraging foreign direct investment and cross-border mergers and affecting banks involved in international financing, as weaker global trade can reduce demand for trade finance services offered by banks.
Banking stocks often decline amid trade war fears, affecting their market valuations and so investors may shift capital from riskier assets to safe havens such as US Treasury bonds, drawing capital away from banks. While tariffs alone might not trigger a full-scale banking crisis, they do increase financial sector risks, especially in trade-dependent regions. If trade wars persist, a prolonged economic slowdown and banking stress could escalate.
Trump has signalled he is willing to reconsider tariffs for some countries, but only on a temporary basis. He recently reversed his plans to double steel and aluminium import tariffs on Canada to 50% after Ontario’s premier backed down on threats to place tariffs on electricity exports to the US. Trump has also delayed 25% tariffs on all Mexican and Canadian imports until the start of April.
Regulatory chaos
Regulation is such a divisive topic in banking; it is both the enemy of progress and the guardian of market stability. For Trump, it is the former, and so he has set to work dismantling legislation and regulatory guidance designed to ensure that banks remain robust in a crisis. But how does the banking sector itself feel about the prospect of deregulation?
A survey by Arizent, carried out shortly before Trump was elected, found around half of all respondents from banks with at least US$100bn in assets felt that Trump winning a second term would be best for the industry, from a solely regulatory/policy-based perspective. “This sentiment held true across the rest of those surveyed,” said the report. “69% of those who work at banks with between US$10bn and US$100bn of assets, 76% from community banks with less than US$10bn of assets and 60% at credit unions of all asset classes all followed suit in saying Trump is the better choice.”
The survey also found that although most respondents planned to vote for Trump (44% compared with 38% for Harris), more than half (59%) expected the Democrats to win ーdemonstrating how uncertain the current regulatory landscape is.
With the authority to appoint leaders of key federal financial regulatory agencies ー including the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), and the Consumer Financial Protection Bureau (CFPB) ー Trump holds significant influence over the direction of regulatory developments. Since resuming office, he has enacted significant changes within key federal financial regulatory agencies:
Federal Deposit Insurance Corporation (FDIC):
Approximately 500 FDIC employees accepted deferred resignation buyouts and 170 probationary employees were terminated from the FDIC. Over 200 job offers were also rescinded, substantially reducing the agency’s workforce. As of the time of writing, Trump had not nominated a permanent chair for the FDIC, leaving the position unfilled.
Office of the Comptroller of the Currency (OCC):
Jonathan Gould, formerly the OCC’s senior deputy comptroller and chief counsel, has been nominated to serve as the Comptroller of the Currency. The OCC has initiated layoffs, with around 76 employees reportedly terminated as of February 21, 2025.
Consumer Financial Protection Bureau (CFPB):
Jonathan McKernan, who previously served on the FDIC board, has been nominated to lead the CFPB. Acting Director Russell Vought expanded an existing stop-work order at the CFPB, suspending all supervision, examination activities, rulemaking, and enforcement actions.
Trump versus Zelensky
Trump’s second administration immediately got heavily involved with major global conflicts, most notably in its decision to suspend military aid and intelligence provided by the US to Ukraine. On 28th February 2025, Trump and Ukrainian President Volodymyr Zelensky held a (now-infamous) heated meeting in the Oval Office. The discussion was centered on the United States’ continued support for Ukraine amid the ongoing conflict with Russia and also a prospective deal for granting the US access to Ukraine’s substantial reserves of critical minerals, including lithium, graphite, and uranium ー in return for continued US support. However, the meeting ended abruptly without a clear resolution. During the final moments, Trump and Vice President JD Vance criticised Zelensky, claiming he had not thanked the US for its efforts in helping Ukraine and talked over him in his attempts to respond. The televised meeting sent shockwaves around the globe, with many world leaders, particularly in Europe, publicly decrying the treatment of the Ukrainian leader. In the aftermath, Trump ordered a pause on military aid to Ukraine, signalling a potential re-evaluation of US support for the Ukrainian government.
These developments have strained diplomatic relations between the two countries and raised concerns about the future of international support for Ukraine. The meeting’s contentious nature introduced uncertainty into the global markets, leading to increased volatility in global stock indices and contributed to fluctuations in currency markets, with the euro experiencing a two-week low against the dollar before rebounding. US Treasury yields saw a slight decline, with benchmark 10-year yields falling from 4.27% to 4.23%.
Musk: a conflict of interest?
Billionaire Tesla CEO, Elon Musk, was an active supporter of Trump throughout his presidential campaign, donating US$288m to help Trump and other Republican candidates achieve success. Now, via his suspiciously vague role as leader of the Department of Government Efficiency (DOGE) he and Trump are on course to cut tens of billions in federal spending by eliminating thousands of jobs and massively reducing the scope and power of several government-run regulatory bodies.
But Musk is now facing increasing allegations of a conflict of interest with several legal and ethics experts speaking out on the issue. “The power and influence Musk is exercising over government agencies and operations while his companies have billions of dollars in government contracts and have been subject to government regulation, financial penalties and oversight, presents wide-ranging and dangerous conflicts of interest,” former Federal Election Commission general counsel, Larry Noble, told The Guardian.
The DOGE, widely believed to have been the brainchild of Musk, has set its sights on agencies including the CFPB, which has carried out investigations into Tesla’s debt collection and loan policies, presenting what critics say is a blatant conflict of interest. SpaceX and other firms owned by or linked to Musk have also been investigated or fined by several regulatory agencies, including the CFPB and the SEC.
So why and how is this conflict allowed? It could be because Musk’s involvement with the DOGE is technically in an unofficial capacity. According to a court filing from the White House in February, the Tesla CEO isn’t an actual employee of DOGE and “has no actual or formal authority to make government decisions himself.” The filing says that “in his role as Senior Advisor to the President, Mr Musk has no greater authority than other Senior White House Advisors.”
However, several Democratic state attorneys general are taking legal action to challenge the DOGE’s extensive agency operations and its efforts to obtain vast amounts of sensitive data. In February, a federal judge issued a preliminary injunction preventing the DOGE from accessing sensitive US Treasury Department payment systems. This decision came after 19 state attorneys general filed a lawsuit alleging that the department’s involvement in the Bureau of the Fiscal Service could lead to unauthorised alterations of federal payments such as student loans, Social Security or tax refunds. The injunction states that any data obtained by DOGE since 20th January 2025 must be destroyed and restricts DOGE staff from accessing Treasury data, pending further legal proceedings.
Just how Trump and Musk’s bulldozering of regulatory bodies will impact the integrity of the banking industry and the global markets more widely remains to be seen, but is already starting to materialise via some of the issues discussed above. One thing is for sure, uncertainty will continue to surround politics, global conflict resolution, regulation and trade for the foreseeable future ー or at least while Trump is in power.
Download a PDF version of this report here.
