The incoming administration's ideas
1. Extending certain TCJA provisions
The Tax Cuts and Jobs Act (TCJA) increased the existing estate/gift tax lifetime exemption for US taxpayers (currently USD 13.99 million for 2025). This increase was expected to sunset to USD 5 million (indexed for inflation) on January 1, 2026. Trump is likely to extend or make permanent the increased exemption amount, benefiting US taxpayers who stood to utilize the exemption in 2026 or future years. Other provisions of the TCJA due to expire on January 1, 2026, such as the tax rates, brackets, standard deduction and personal exemptions for individuals, and the 20% deduction for certain qualified business income realized by pass-through businesses, should also fall within the scope of Trump's tax agenda and may also be extended or made permanent.
Particularly, the continuation of the increased lifetime exemption amounts would directly benefit US families and international families with members who either have a US passport or are citizens of a jurisdiction that has an estate tax treaty with the US. Under the current US federal tax rules, the lifetime exemption is only available to US citizens or domiciliaries. Non-US citizens who are not domiciled in the US are afforded a much smaller lifetime exemption equivalent to USD 60,000, unless such amount is modified by an applicable estate tax treaty with the US. For example, under the estate tax treaty between the US and Switzerland, Swiss citizens are afforded a proportionate lifetime exemption equal to the ratio of a decedent's US assets to their total worldwide assets at death multiplied by the existing lifetime exemption afforded to US citizens and domiciliaries.1
2. Creating new incentives for US production
Another major component of the TCJA was the lowering of corporate tax rates from a maximum of 35% to a flat 21%. Unlike some of the other provisions, the reduced corporate tax rate is not set to expire in 2026. Nevertheless, Trump has voiced his desire to further reduce the rate to 20% and install an even lower rate of 15% for corporations engaged in US domestic production operations.
In addition, Trump has proposed to reenact the Domestic Production Activities Deduction, which previously allowed for a 28.5% deduction on qualifying domestic production activities.
When coupled with the other business tax provisions that may be extended or reintroduced along with the extension of the TCJA provisions, the environment for businesses organized as corporations and operating in the US, particularly in manufacturing, is predicted to be quite favorable. Wealth-owning families with existing US operating businesses or potential investment and acquisition opportunities may wish to consider the potential impact of these proposed measures.
3. Imposing new tariffs
Trump has made clear his intention to use tariffs as a trade and fiscal tool. Unlike the implementation of changes to the tax regime, this form of US legislation includes provisions that would allow Trump to increase and impose new tariffs without requiring Congressional approval. As of the date of this article, Trump has proposed the following tariff measures:
- 25% tariffs on Mexico and Canada:
- 25% tariffs on all imports from Mexico and Canada unless these countries control the flow of illegal drugs, especially fentanyl, and .illegal immigrants.
- 10% tariff on China:
- Trump has proposed a 10% tariff on imports from China due to concerns about fentanyl.
- Note: During his campaign, Trump had threatened tariffs of 60% on Chinese goods. As of the date of this article, he has not expressly taken the 60% tariff off the table.
- 100% tariffs on BRICS countries:
- After announcing the 25% tariffs on goods from Canada and Mexico, Trump also threatened to levy tariffs of 100% ad valorem on all imports from the BRICS nations. This group was originally made up of Brazil, Russia, India, China and South Africa, and has been joined by Egypt, Ethiopia, Iran and the United Arab Emirates.
- Trump noted that his proposal resulted from the efforts of India and other BRICS nations to replace the US dollar as the world's reserve currency.
Tariffs are a politically charged mechanism in global trade, and critics have voiced fears that the use of tariffs will lead to retaliatory and counterproductive trade dynamics between the US and its trade partners and competitors.
Although these tariffs are addressed specifically at countries, the tariffs directly impact businesses with operations in such countries and may have farther-reaching economic effects. As a consequence, business-owning families may feel the repercussions of Trump's tariffs even though they are not the intended target.
4. Ending worldwide taxation on Americans living abroad
Trump pledged on the campaign trail to "end double-taxation" on the income of US citizens living overseas. It remains unclear what was the intended scope of this statement and how Trump would implement such a pledge. However, the policy would garner support from certain members of Congress on both sides of the aisle, as well as presumably many of the US citizens residing abroad.
It remains to be seen whether and to what extent this pledge makes its way into the new administration's proposals and, ultimately, into legislation put before Congress.
Conclusion/summary
Campaign promises and proposals are not guarantees, and Trump's intended tax policies are certain to change, face scrutiny and resistance, or to simply be discarded in favor of other provisions as part of the legislative process. While certain provisions, such as the extension of the increased TCJA exemptions, seem likely to be adopted in the near term, other policies, such as tariffs, may require expending significant political capital with less certain appeal within Congress.
Some of the policies under a Trump administration may benefit wealth-owning families and individuals, in particular those with US operating and manufacturing businesses, while other proposals may be of less benefit or even detrimental. Regardless of how Trump's second term begins, we expect a significant focus of his first year in office to be the promotion and demotion of key tax proposals in order of priority, which should give more clarity on which campaign proposals may ultimately become law.
1 To claim the increased lifetime exemption under the treaty, a US federal estate tax return must be filed and the decedent's worldwide assets must be reported on such return.
