As we head toward Valentine’s Day 2025, everywhere you look, love is all around. Washington, D.C., is no exception—the White House and government agencies seem to be proudly displaying their ardor for changing the country’s national security policies and practices.
In addition to anticipating chocolate and flowers in the coming weeks, we also anticipate continued shifts in U.S. national security regulation. Indeed, venture investors and technology companies may feel a sting as their passion for lessened regulation, oft reciprocated in the early spring bloom of a relationship with a new Republican administration, may end up unrequited when it comes to export controls, foreign investment, and similar arenas. With the onslaught of new national security-related executive orders and agency actions, as well as the change in administration, national security lawyers are looking to the U.S. government and asking will they or won’t they make various changes under discussion.
To celebrate our love for national security law as we approach February 14, the following 14 predictions are designed to anticipate key areas in which the regulatory landscape may change during the first year of the Trump administration.
1. Be careful where you invest your heart, and where you invest your dollars when it comes to key tech transactions outside of the U.S. In January 2025, new “outbound investment” regulations took effect, restricting U.S. persons (and indirectly the foreign subsidiaries thereof) from a broad array of transactions with businesses that both have certain direct or indirect ties to China and that are involved in any of three key technology areas: semiconductors, quantum computing, or artificial intelligence. This year, we will likely see the U.S. Treasury Department’s (the Treasury) first enforcement actions with respect to these new regulations, which impose new diligence obligations on many U.S. tech transactions. The Trump administration has signaled that it will review the current rules but has left expansion, contraction, or leaving the rules as they are all on the table. In addition, there are efforts in the U.S. Congress to codify and expand the current regulations, which may or may not pan out.
2. While love knows no borders or bounds, the U.S. will continue to enforce the existing barriers to cross-border investments into American companies. The Committee on Foreign Investment in the U.S. (CFIUS)—the U.S. government committee composed of multiple government departments and agencies, chaired by the Treasury and tasked with reviewing foreign investment into the United States—will continue to exercise its broad discretionary power to determine whether those investments pose national security risks. Under the Biden administration, CFIUS’s enforcement team was heavily focused on investment related to China. Despite many policy differences between President Trump and former President Biden, President Trump’s CFIUS is likely to continue the Biden era focus and pay close attention to foreign investments from China. However, companies in search of capital with long time horizons may see a salutary lessening of the Biden-era focus on heavy CFIUS reviews of sovereign wealth investment from other nations.
3. Love means never having to say you’re sorry. Far more than China, Russia, Iran, or any other ideological adversaries, the foreign policy conversations of the presidential transition period were dominated by Canada, Mexico, the Panama Canal, and—most prominently—Greenland. As the Trump administration takes over the reins of the U.S. government in 2025, we will be looking to see whether historical U.S. friends will overlook Trump’s comments to maintain a unified Western front to counter China and Russia, or if the on-again-off-again alliances that Biden sought to restore and nurture after the first Trump administration look like they’ll be heading for another break-up.
4. Love is free, but goods may become more expensive thanks to new tariffs. President Trump has long professed his love for tariffs, and recently announced an intent to place an additional 10 percent tariff, on top of the already high tariffs, on all merchandise from China as well as additional 25 percent tariffs on all imports from Mexico and Canada. Furthermore, President Trump threatened to place 100 percent tariffs on the nine BRICS countries (Brazil, Russia, India, China, South Africa, Ethiopia, Egypt, Iran, and the United Arab Emirates) unless they commit to refraining from replacing the U.S. Dollar as global reserve currency. Given that current legal authorities, including the International Emergency Economic Powers Act (IEEPA), provide the President with significant discretion to undertake unilateral action to implement tariffs or other trade restrictions deemed necessary for U.S. national security or foreign policy interests, President Trump would have significant leeway to act decisively on these matters (as demonstrated with respect to his threatened tariffs on Colombia during the first days of his administration).
5. Friendshoring (with benefits). Amidst the broader rightward political shift in the Western world, leaders ideologically aligned with President Trump may be beneficiaries of the few reprieves from the rising tariff and non-tariff barriers many expect the Trump administration to impose. In late 2024, Argentina’s President Javier Milei announced plans to pursue a free trade agreement with the U.S. in 2025 as part of his free-market reforms that he said President Trump supports. In December 2024, South America’s Mercosur trading bloc (including Argentina, Bolivia, Brazil, Paraguay, and Uruguay) also reached an agreement with the European Union that, if ratified, would create one of the world’s largest free trade areas at a time when trade liberalization has largely been on the decline.
6. Much ado about Russia sanctions. A cornerstone of the Biden administration’s approach to Russia’s invasion of Ukraine involved the drastic tightening of sanctions on key Russian oligarchs and industries—including last-minute sanctions targeting Russia’s energy sector in the last weeks of Biden’s presidency. While the first Trump administration was a strong proponent of sanctions to achieve certain foreign policy goals, President Trump’s rhetoric during the 2024 campaign signaled his openness to dropping U.S. sanctions on Russia as part of a deal to resolve the conflict in Ukraine. However, while the President has indicated skepticism of the effectiveness of sanctions generally, he also threatened during the first week of his administration to continue and even expand their use against Russian parties if a deal over Ukraine isn’t reached.
7. Love is a powerful force, but sanctions may not be far behind. Despite President Trump's ambivalence toward the Russia sanctions, as described in prediction #6, we may still see President Trump increase his use of sanctions targeting individuals and companies to achieve his policy goals. For instance, the Trump administration may use the SDN List or the Entity List to target Chinese entities as leverage in an effort to accomplish a grand bargain. The new administration may also strengthen sanctions targeting Iran, which is already comprehensively sanctioned. Even though President Trump has communicated a general desire to shrink government spending, there may be an increase in resources for enforcement with respect to sanctions on Iran and others.
8. Playing hard-to-get with critical technologies. The Bureau of Industry and Security (BIS) started the year hot and heavy with its new controls to regulate the global diffusion of advanced AI models and limit processing power exports. BIS is unlikely to slow down in the year ahead and will continue to keep the spark alive by implementing additional controls on AI, quantum computing items, semiconductors, and biotech. Enforcement efforts will likely continue apace to crack down on entities that are involved in exports to China of controlled technologies; indeed, the Trump administration has already ordered a review of potential areas for the tightening of compliance. As a result, companies would be well advised to examine their export controls compliance policies and procedures before sky-high penalties sweep them off their feet. China is on the same wavelength and imposing its own retaliatory controls on exports, particularly of rare earth minerals and other materials.
9. ICTS distance probably won’t make BIS’s heart grow fonder. BIS signaled to Chinese and Russian connected vehicle importers and manufacturers that it wasn’t meant to be when it released a final rule on connected vehicles in mid-January 2025, with additional rules on connected commercial vehicles and unmanned aircraft systems under consideration. While foreign adversary participation in Information and Communications Technology and Services (ICTS) transactions may be out of sight, it is not quite out of BIS’s mind as companies may see final agency action on unmanned aircraft systems, Infrastructure as a Service, and cloud computing this year. The Trump team’s early demand is for Commerce to step back from existing in-process rulemakings and consider where and whether additional new ICTS industry-specific rules are really needed. However, ICTS is a broad but flexible regime created by an executive order in the first Trump administration; if the Trump team ultimately does decide to use those powers widely, ICTS has the potential to be deployed to regulate a wide range of industries, as it's challenging to think of a significant technology sector that does not contain ICTS components in 2025.
10. "Roses are red, violets are blue, CMMC compliance is something you must do." Implementation of the Cybersecurity Maturity Model Certification (CMMC) Program, which aims to protect the defense industrial base from cyberattacks by imposing enhanced controlled unclassified information (CUI) protections and cybersecurity requirements on Department of Defense (DoD) contractors, will continue in earnest this year. Indeed, many of those CUI protections and cybersecurity rules will apply more broadly, outside of DoD. It is likely that there will be an increased focus on scrutinizing and reducing foreign participation in the defense supply chain. Relatedly, depending on how the Department of Government Efficiency (DOGE) approaches its goal of improving the procurement system, there may be more government contracting activity, including to outsource government functions.
11. On again, off again relationship with the Corporate Transparency Act (CTA). It’s unlikely that the CTA’s beneficial ownership reporting requirements will see significant support with the new Trump administration and a Republican majority in Congress. If the U.S. Court of Appeals for the Fifth Circuit or the U.S. Supreme Court hold that the CTA is constitutional, there may be attempts in Congress to repeal the CTA. Given that the Trump administration is making eyes at the cryptosphere, new or more pervasive anti-money laundering regulations or compliance requirements are unlikely to be a significant federal priority in the year ahead.
12. Federal Communications Commission (FCC) to swipe left on Chinese telecom providers? It's possible that this will be the year in which the FCC puts more money and effort into breaking up with Chinese telecom providers and equipment. The FCC could update its “Covered List,” which is a list of communications equipment and services that pose an unacceptable risk to U.S. national security, to include more products from China, and it may decide to initiate enforcement actions against the Chinese telecom providers already banned from operating in the U.S. Congress may also rekindle its interest and fully fund the FCC’s “Rip and Replace” program, which reimburses communications providers for expenses incurred to remove, replace, and dispose of telecommunications equipment from certain Chinese companies designated as U.S. national security threats.
13. Love has no rules, but the U.S. Government has many if you have U.S. bulk sensitive data. The U.S. Department of Justice (DOJ) broke a lot of hearts in early January 2025 when it released its final rule that restricts or outright prohibits U.S. persons from engaging in certain classes of transactions that pose a risk of giving countries of concern or covered persons access to U.S. bulk sensitive personal data and U.S. government-related data. As affected entities figure out how to adapt and move forward, the DOJ's Foreign Investment Review Section will also have to figure out its specific license application process and issue advisory opinions and FAQs. Additional guidance will likely be released by the DOJ in the near term to ease some of the compliance burdens and heartache of affected entities, including issuing general compliance guidance, updates on possible general or wind-down licenses to facilitate implementation of the regulations for existing contracts, and clarifications on the specific license process.
14. National Security regulations are like a box of chocolates; we don’t know what we’re gonna get with the new administration in 2025. The end of the Biden administration saw a flurry of new regulations, shifting the landscape of national security law. With the change in administration, and President Trump's robust use of executive action in the early days of his second term, we are likely to see a second series of significant changes this year—many of which are almost certain to surprise us by taking policy in unexpected directions before next Valentine's Day. Like any classic love story, we don't know where it will go.
