Regulatory Impacts on Businesses

The White House just announced a plan to install rent control AND build more housing. This is like arguing we can cap prices for organic foods AND produce more of them. Unlike the President’s prior housing proposals (which I've defended), this one seems hurried and unserious. Here’s why: 1) President Obama’s top economist, Jason Furman, said it best in the Washington Post: "Rent control has been about as disgraced as any economic policy in the tool kit. The idea we’d be reviving and expanding it will ultimately make our housing supply problems worse, not better." 2) Furthermore, as the Washington Post pointed out: "Experts on both sides of the aisle tend to argue that government limits on rent discourage new development." No serious policy proposal ignores bipartisan expertise. This is NOT one a red vs. blue issue. 3) It specifically targets only "corporate" owners with 50+ units. This means renters in two neighboring, identical properties could have different benefits. Why does one renter deserve a rent cap and the other does not? If the White House honestly believed rent control was a good idea (and I’m skeptical they do), they wouldn't play favorites. In effect, this cap applies to an even a single apartment owner (since many are 50+ units) while exempting most SFR owners (despite rents growing faster in SFR). 4) The White House specifically cites an activist concluding that apartment REITs "reported large profits." Anyone who tracks public companies know apartment REITs are hardly the darling child of Wall Street these days. The "analysis" did not compare REIT profit margins to other sectors nor did it point out that property values are down around 20% from peak – a much sharper correction than other industries. 5) The White House claims its plan "effectively balances the needs of tenants without limiting incentives for more supply." This is peak idealism. Annualized multifamily starts plummeted 51.7% YoY in May, according to the U.S. Census, and that drop can be traced to higher interest rates plus (ironically) flat-to-falling rents for new construction. While the White House did include some positive steps for construction (such as repurposing some federal land for affordable housing), it's not nearly enough to offset macro challenges facing apartment developers. 6) The White House said "more units are under construction than at any time in over 50 years." This is no longer true. Housing construction, according to the U.S. Census, peaked in Oct 2022 at 1.71mm units, and it's trending down fast due to falling apartment starts. 7) The White House exempts new construction, but for investors who fund new housing development, that's an empty promise. Look at New York, where rent control has been revised four different times to "recapture" units previously exempt. #housing #rents #SFR #apartments https://lnkd.in/gk2_FpGT

I’m pleased that President Trump has announced a pause on implementing some of the “reciprocal tariffs” that he announced last week.   In the short-term, tariffs can hurt economic activity. They cause costs to rise, and companies will either absorb those costs, decreasing margins, or pass them on, which will affect pricing and demand. So delaying the tariffs will avoid these short-term impacts.   But we remain in a period of high uncertainty, including the near-term rising risk of an escalating trade war with China. This uncertainty will likely dampen global investment and growth. Every investment decision is based on both risk and return. The large uncertainties in the global trading system have substantially increased risks for most companies.   BCG’s trade and geopolitics experts, put it this way: “Every company, regardless of sector or location, needs to build tariffs and the related uncertainty into its planning and operating model.” In other words, core decision making just got a lot more complicated for business leaders. You can read more from our Global Advantage team on navigating the impact of tariffs: https://lnkd.in/ert8gazK Some companies have already built geopolitical muscle, developing capabilities to anticipate and respond to policy shifts. They’ve set up teams to map out tariff impacts, consider pricing strategies, and work with suppliers to share cost burdens. They should be better positioned to confront the current turbulence and headwinds. But even the leaders of those companies are now asking harder, longer-term questions. All businesses need to understand how sustained high tariffs could affect their supply chains and manufacturing networks—and prepare in advance as much as possible.   Trade battles and higher uncertainty are not what most of us would have wished for, but that’s the world we’re in. Leaders must embed a mindset of resilience grounded in adaptiveness and agility and seek advantage and opportunity amid uncertainty.

Bad Customer Experiences Invite Costly Regulation: The Biden Administration's 'Time is Money' Initiative   In recent years, we've witnessed a growing trend of government intervention in customer service practices. The latest example is the 'Time is Money' initiative, a multi-agency effort aimed at addressing corporate practices that waste consumers' time and create unnecessary obstacles. While this specific initiative comes from the current U.S. administration, it's indicative of a broader issue: when businesses fail to prioritize customer experience (CX), they invite regulation that can impact entire industries.   Many consumers have experienced frustrations with poor service. These pain points often include difficult cancellation processes, convoluted refund procedures, limited or ineffective access to customer support, and misuse of chatbots and AI tools that prioritize company interests over customer needs. When these issues become widespread, they create an environment where some see government intervention as necessary to protect consumer interests. The objectives of the Time is Money initiative include making the process of opting out of a service as straightforward as signing up for it, improving customer support to prevent "service doom loops," ensuring responsible AI implementation, and enforcing transparent policies for refunds and service changes.   While regulation aims to protect consumers, it comes with significant costs that affect both businesses and society at large. Government agencies must allocate substantial resources to develop, implement, and monitor new requirements. This process involves extensive research, drafting of rules, public comment periods, and ongoing enforcement efforts. On the business side, organizations face the burden of understanding new (and potentially vague or complex) regulations, implementing compliance measures, and reporting on their adherence.   The costs don't stop there – companies must also defend against potential infractions, which can lead to legal expenses and negative publicity for perceived or real violations. These financial and reputational damages can be severe, even for minor oversights. Moreover, the fear of non-compliance can stifle innovation as businesses become risk-averse.   Perhaps most frustratingly, these costs are often unnecessary burdens that could be avoided if organizations simply prioritized their customers' best interests from the outset. By focusing on delivering excellent customer experiences, businesses can not only sidestep these regulatory costs but also build stronger, more loyal customer bases.   The companies that thrive will be those that view excellent CX not as a burden or a reaction to regulatory pressure, but as a fundamental aspect of their business model and a key driver of long-term success. The choice is clear: invest in customer experience now, or face potentially costly consequences later.

Government layoffs aren’t just a public sector issue—they’re a major #inflectionpoint for businesses, housing markets, and local economies. Too often, we forget how interdependent government and business really are. With agencies cutting staff, companies will face delays in permits, certifications, and regulatory approvals, creating uncertainty in markets that rely on stability. Even bigger, this marks a shift away from structured bureaucracy toward patrimonialism, where decisions are driven by power and influence rather than codified rules. The result? A chilling effect on markets and new risks for businesses. Leaders should act now to: - Map key interdependencies with government functions before disruptions hit. - Reevaluate outdated assumptions about stability and risk. - Prepare for shifting rules and a business landscape defined by uncertainty. - This isn’t just a moment of change—it’s a new reality that demands strategic adaptation. #BusinessStrategy #Leadership #EconomicTrends #GovernmentImpact #SeeingAroundCorners #InflectionPoints #Strategy #Innovation

If you DON’T work at a nonprofit - this post is for you 🫵 You’ve probably heard about funding freezes by the federal government. You’ve also heard about 1,000 other proclamations, orders and lawsuits - there’s an overwhelming deluge right now. But here’s what this practically means for nonprofits that I guarantee you’ve supported before and care about their mission. I spoke with a community serving nonprofit yesterday that was notified that 20% of their funding - which comes from a variety of federal contracts - would be terminated. These aren’t general operating grants, or prospective future funding. It’s millions of dollars in program-specific multi-year contracts that are in process and already have funds spent, people hired, etc. These are life-saving healthcare services for marginalized and underserved communities that are most at risk. The reason? Executive orders “banning DEI” are worded so broadly that organizations serving marginalized groups can not exist and comply. The result? Expensive and distracting legal proceedings taking more resources from organizations already faced with massive funding shortfalls. Which means an even faster deterioration in the services available to the people and communities most in need. What does this mean for you? Regardless of your political views, this arbitrary “changing of the rules” mid-contract is not how we run a “business friendly” society. And especially if you’re cheering on the “cost cutting” - if that’s what we’re calling this… - then you personally need to show up for these organizations. We need an extraordinary increase in philanthropy this year to avoid losing thousands of critical organizations - and causing sweeping harm to the most vulnerable in our communities across the country and around the world. Are you feeling helpless, concerned, activated or maybe even a little responsible? Wondering what you can do? 1️⃣ Reach out to nonprofits you care about and ask if/how they’re affected and what they need. 2️⃣ Give more - can this be your biggest giving year ever? 3️⃣ Listen - you might be getting a lot of alarmist outreach from nonprofits. Pay attention. They likely aren’t exaggerating with how dire the situation is. They really do need your support now more than ever. 4️⃣ Don’t wait - do not wait until December to do your 2025 giving. Don’t wait to be asked. Just give right now. 5️⃣ By god if you have a DAF… Use it now. This is the rainy day - we’re talking survival. I guarantee you will feel better by getting more engaged with your giving. Be a part of solutions and a part of a community. We are going to get through this together - I really do believe it ❤️ If you’re wondering where & how to support - shoot me a DM. #nonprofit #philanthropy #fundraising 

China’s regulators recently announced a new set of rules to reduce spending and rewards that encourage folks to play video games. According to Josh Ye of Reuters, the new rules which basically set limits for spending in online games, wiped nearly $80B in market value from the two largest gaming companies in China of Tencent and NetEase. Games can no longer offer daily login bonuses and rewards for spending money on them for the first time or several times consecutively, which is common in many games nowadays. This comes as there are a number of stories about overspending and perhaps even gambling addiction among some younger gamers in China. Additionally, games will be barred from probability-based lucky draw features to minors, and from enabling speculation + auction of virtual game items. Analyst Ivan S. of Morningstar says these changes “could eventually force publishers to fundamentally overhaul their game design and monetisation strategies”. All this being said, the new rules also include a proposal that will require regulators to process game approvals within 60 days, which could accelerate games getting approved in the country. At the same time as this announcement, China approved licenses for 40 new imported games for domestic release, a positive sign for gaming overall. Additionally, Chinese game publishers will now require user data to be stored on servers within China rather than in foreign locations. The administration is seeking public comment on the rules through Jan. 22, 2024. Follow #MoreMark for #Business content in #Gaming, #Esports, and #Creators!

🌊 The tide is turning: $40B to fuel Ocean Innovation 🚢 The world just agreed to a global price on shipping emissions. ⚡ It's a much needed regulatory shift - and a powerful catalyst for maritime innovation. What does this mean in practice? 💰 Starting in 2028, ships that exceed emissions thresholds will face financial penalties up to $380 per ton of CO₂. For some large vessels, this could mean $70,000+ in daily carbon costs, finally embedding the cost of climate pollution into global trade. For too long, the environmental cost of ocean freight has been an externality. By internalizing these costs, we will see a surge in ingenuity focused on creating a more sustainable future for our seas. Why does this matter? 💵 Economic Incentive: Putting a price on carbon creates a direct economic incentive to reduce emissions - its a direct incentive to invest in cleaner technologies and operational efficiencies. 💡 Think wind-assisted propulsion, alternative fuels like green hydrogen and ammonia, and advanced hull designs – these are no longer niche concepts but increasingly viable solutions. 🌱 Leveling the Playing Field: A global price helps to level the playing field for companies that have already been investing in sustainability, preventing a scenario where environmentally conscious players are at a competitive disadvantage. ✅ Confidence to investors and funders: The certainty of a carbon price signals a long-term commitment to decarbonization, attracting crucial investment into research, development, and deployment of innovative solutions. Investors are already taking note and moving smart capital is moving to ocean tech. In 2024 alone, over $12.5 billion flowed into Ocean Positive investments 🤝🏻 Fostering Collaboration: The challenge of decarbonizing shipping is immense and requires collaboration across the value chain. Carbon pricing can act as a unifying force, encouraging partnerships between shipowners, technology providers, ports, and fuel producers to develop and implement groundbreaking solutions. Personally I think the impact of this will be far-reaching, touching everything from ship design and fuel production to supply chain management and port infrastructure. This isn't just about compliance; it's about fostering a culture of innovation and building a truly sustainable maritime industry for generations to come. What innovative solutions are you seeing emerge in response to carbon pricing in shipping? Tagging some #ocean innovation leaders in my network: Keith Tuffley Sylvia Earle Daniela V. Fernandez Catherine Jadot, PhD Keri Browder Martin Koehring Fred Puckle Hobbs #OceanInnovation #ShippingEmissions #Decarbonization #Maritime #Sustainability #GreenShipping #CleanEnergy

Given the plan to have the steel & aluminum tariffs jump to 50% this week, I wanted to share data on the downstream industries whose cost structures are most impacted by this action. I've done this by using the latest benchmark use table from the input-output accounts (https://lnkd.in/eQdPji9) and calculated each industries' combined use of (i) Iron and steel mills and ferroalloy manufacturing [331110]; (ii) steel product manufacturing from purchased steel [331200]; (iii) Alumina refining and primary aluminum production [331313]; and (iv) Aluminum product manufacturing from purchased aluminum [33131B]. I then summed the use across these four commodities and divided this sum by each industries' total intermediate inputs (which includes all goods, utilities, and services). Below are the top sectors. Thoughts: •For many industries in fabricated metals (starting with NAICS 332), we see steel and aluminum make up more than 40% of the cost structure. If we assume that domestic prices ultimately rise something like 35% from a non-tariff scenario, that would represent a 15% increase in costs. This is a conservative estimate because I'm using all intermediate inputs as the denominator; if I used only goods and utilities, this figure would be much higher. •As expected, we see substantial impacts on transportation equipment (the major impact on military armored vehicles is a bit ironic) and machinery. Transportation equipment and machinery are two sectors where the USA is very globally competitive; these tariffs make us less competitive by raising producers' costs. For example, the last thing John Deere needs is to be paying higher prices for steel and aluminum as it tries to compete with European rivals for business in Australia. •It's worth again stressing these affected downstream industries employ far more people than employed in making steel and aluminum. This is why tariffing upstream industries has been termed "Self-Harming Trade Policy" (see https://lnkd.in/gWgxQjtY). Implication: many industries will be starting this week with the reality that they are looking at their costs rising substantially due to POTUS's steel and aluminum tariff escalation. This is precisely the type of action that makes the FOMC less likely to reduce interest rates anytime soon. #supplychain #economics #shipsandshipping #manufacturing #freight

From my expertise working inside the FDA and alongside CBP, I can tell you this — what just happened isn’t a trade adjustment, it’s a regulatory upheaval. New import taxes are being introduced under the guise of fairness, but they’re about to trigger a domino effect that affects everyone moving products across borders — especially those regulated by federal agencies. Costs won’t just rise. Risk will. Businesses operating in highly controlled industries will now face a triple-threat: 🔸 Unpredictable border interventions 🔸 Shifting agency priorities 🔸 Higher stakes for even minor missteps I’ve seen this kind of pressure play out from the inside. It’s not just about what you bring into the country — it’s about whether your business is built to survive these shifts. If you're responsible for compliance, legal strategy, or product movement — especially in food, supplements, drugs, devices, cosmetics, or even pet goods — now’s the time to act, not react. #TradePolicy #RegulatoryStrategy #FDACompliance #TariffImpact #USImports #GlobalTrade #CBPEnforcement #SupplyChainRisks #ExecutiveLeadership #LegalStrategy #FoodLaw #PharmaCompliance #MedicalDeviceRegulations #PetIndustryRegulations #CrossBorderTrade #ProductSafety #RiskMitigation #ThoughtLeadership #USDA #LinkedInCreators

Markets are always forward-looking, reacting to future risks rather than past performance. Economic indicators like GDP growth and unemployment provide a snapshot of what has already happened. Right now, the biggest challenge isn’t economic data—it’s strategic future uncertainty. Markets thrive on stability, and when there’s no clear direction on trade policy, investors become cautious, leading to market fluctuations. The key is that any rebalancing of unfair trading practices facing America will necessarily come with a period of short run uncertainty until the uncertainty to what that rebalance entails gets resolved. There is no way to rebalance without short run uncertainty of its eventual outcome. Trade negotiations, particularly around tariffs, are powerful tools, but they come with a trade-off. Keeping strategies unclear and uncertain can strengthen a country’s bargaining position, but it also fuels investor anxiety. Markets don’t react well to unknowns, and when policies remain uncertain, falling prices reflect that hesitation. The challenge is finding a balance—leveraging trade policy as a negotiation tool while ensuring it doesn’t create prolonged instability. In the long run, confidence in the market depends on clear direction, even when strategies require short-term ambiguity. #MarketTrends #TradePolicy #EconomicUncertainty #InvestorConfidence #GlobalMarkets