2025 U.S. Presidential shift: water policy impact and industry implications
The re-election of Donald Trump in 2024 will likely lead to a notable shift in U.S. water policy, steering away from the sustainability-focused initiatives of the Biden administration. This change is expected to reshape key sectors within the water industry — including infrastructure development, water quality standards, climate change strategies, and water utility operations — by prioritizing economic growth and regulatory relaxation over federally driven environmental protections. As the administration pivots toward a market-centred approach, industry stakeholders are preparing to navigate new challenges and opportunities that will likely emerge from this policy shift. Given the scale of these changes, the implications may extend beyond U.S. borders, potentially influencing global standards and investment trends in water management. This article examines the anticipated adjustments in water policy and how various actors – state and local governments, utilities and companies – might adapt to this evolving regulatory environment.
Lee Zeldin's appointment to the EPA
In a pivotal move underscoring this new direction, President-elect Donald Trump has selected Lee Zeldin, a former congressman from New York, to serve as the next administrator of the Environmental Protection Agency (EPA). Zeldin, known for his strong legal background and alignment with Trump’s “America First” policies, is set to oversee efforts to reverse many of the environmental regulations enacted during the Biden administration. This includes the potential rollback of key water policies, which could redefine the role of federal oversight in water management and environmental protection.
“Lee, with a very strong legal background, has been a true fighter for America First policies,” Trump announced in a statement. “He will ensure fair and swift deregulatory decisions that will be enacted in a way to unleash the power of American businesses, while at the same time maintaining the highest environmental standards.”
Zeldin’s track record reflects limited experience in environmental policy, though during his tenure in Congress, he supported measures to protect Long Island Sound and joined the Conservative Climate Caucus to promote Republican engagement in climate policy discussions. However, his overall environmental voting record has drawn criticism, with groups like the League of Conservation Voters assigning him a lifetime score of 14% for his frequent opposition to environmental legislation.
President-elect Donald Trump has selected Lee Zeldin, a former congressman from New York, to serve as the next administrator of the EPA
Reacting to his appointment, Zeldin expressed enthusiasm on social media, stating: “We will restore US energy dominance, revitalize our auto industry to bring back American jobs, and make the US the global leader of AI. We will do so while protecting access to clean air and water.”
Zeldin’s leadership will be critical in shaping the EPA’s policies under Trump, particularly as the administration emphasizes deregulation and economic growth over federally driven sustainability measures. His appointment is likely to signal a significant shift in how water quality standards, infrastructure investments, and climate change policies are addressed during Trump’s second term.
Lee Zeldin
Infrastructure: transitioning from federal support to private investment
Under the Biden administration, modernizing the nation’s water infrastructure was a priority, with significant federal investments aimed at improving water access, quality, and resilience. Through the Bipartisan Infrastructure Law, the Environmental Protection Agency (EPA) earmarked $3.6 billion in 2024 to upgrade water systems, part of a broader $50 billion commitment. This approach emphasized public health and environmental protection, targeting pressing issues such as lead contamination, ageing pipelines, and enhanced service reliability, particularly in underserved communities.
Water infrastructure was a priority for the Biden administration, with significant investments going to water access, quality, and resilience
By contrast, Trump’s first term prioritized deregulation and emphasized economic growth by easing regulatory restrictions on various development projects. His policies included rolling back some protections under the Clean Water Act, narrowing the definition of protected waters, and granting states more control over permitting, effectively expanding areas open for industrial development while reducing federal oversight.
With Trump’s return to office, a shift in financial responsibility for water infrastructure is expected, focusing on state and local authorities and private investors rather than federally funded projects. This could reduce the scope for large-scale federal projects focused on sustainability and resilience, instead favouring projects that promise immediate economic returns. For companies, this shift signals an emphasis on private partnerships, shorter-term returns, and a reduced focus on environmental impact.
Trump’s approach may also include cutting funding for clean water initiatives, and redirecting efforts to projects aligned with his economic agenda, such as those supporting resource extraction and manufacturing. This emphasis on profitability may sideline projects focused on long-term public health and environmental goals. For stakeholders in infrastructure, this pivot implies a transition to a market-driven model, affecting project priorities, funding availability, and environmental outcomes.
Water quality: balancing deregulation and public health
The Biden administration made water quality a high priority, implementing stringent regulations to address contaminants in drinking water. Notably, the Environmental Protection Agency (EPA) set the first national drinking water standards for per- and polyfluoroalkyl substances (PFAS), also known as "forever chemicals". Additionally, Biden’s EPA pursued a 10-year plan to replace all lead service lines in the U.S., aiming to eliminate lead contamination from the water supply. This initiative formed part of a broader environmental justice agenda focused on vulnerable communities often disproportionately affected by water quality issues.
In contrast, the Trump administration's approach centred on reducing regulatory burdens for industries, reflecting a preference for economic flexibility over environmental oversight. During his previous term, the 2020 Navigable Waters Protection Rule replaced the 2015 Waters of the United States (WOTUS) rule established under the Obama administration. This new rule redefined “waters of the United States”, effectively removing federal protections for certain small streams, wetlands, and other water bodies, increasing their vulnerability to industrial pollution. This shift has raised concerns about decreased water quality, as contaminants in deregulated areas may flow into larger, connected water systems.
Trump’s first term prioritized deregulation and emphasized economic growth by easing regulatory restrictions on various development projects
Recent reports suggest that Trump may consider eliminating fluoride from public drinking water, a policy potentially influenced by figures like Robert F. Kennedy Jr. Fluoridation has long been supported by health authorities as a preventative measure against dental decay, particularly benefiting low-income communities. If pursued, this change would align with Trump’s previous scepticism toward some federal health mandates and could spark a public debate about the potential impacts on public health, particularly for underserved populations.
If Trump pursues a deregulatory agenda, U.S. water quality standards may lean toward reduced oversight, providing industries with greater flexibility but potentially increasing community exposure to harmful contaminants. Local governments and water utilities may have to bear the responsibility for pollution monitoring and mitigation, filling gaps left by reduced federal oversight.
Climate change: adapting to a new regulatory landscape
Addressing climate change was central to Biden’s policy, with substantial efforts directed toward reducing emissions and strengthening resilience against climate-related threats to water security. Biden rejoined the Paris Agreement, dedicating $4.9 billion to water security and sanitation infrastructure to prepare communities for challenges such as droughts, floods, and water shortages. His administration promoted green infrastructure and water conservation, with particular emphasis on regions vulnerable to climate pressures like the Western U.S.
In contrast, Trump has historically downplayed climate change concerns, focusing on energy independence and reducing regulatory barriers for fossil fuel industries. His return is expected to bring expanded oil drilling, reduced environmental regulations, and possibly a U.S. exit from international climate agreements. This stance disregards climate-related risks — such as severe droughts and floods — that strain water resources, especially in states like California and Arizona, where water scarcity is a growing concern.
With less federal support for climate resilience, local governments and utilities may face the financial and operational responsibility for preparing for climate impacts. This shift could lead to elevated costs for securing water supplies and adapting infrastructure to severe weather conditions. In this landscape, state and private partnerships may become essential to filling the gap left by reduced federal support for climate resilience. State-level programs and local initiatives could help to fund climate adaptation efforts, but the approach may lead to uneven outcomes across regions, with wealthier states or communities better positioned to adapt than others. This shift signals a reliance on state autonomy and market-driven solutions, potentially creating disparities in climate preparedness across the U.S.
Impact on water utilities: navigating operational flexibility and risk
Trump’s anticipated deregulation could bring short-term financial relief for water utilities by reducing compliance costs and easing federal oversight. This allows utilities more flexibility to redirect resources to other operational priorities, accelerating project approvals and minimizing bureaucratic delays. However, greater operational freedom could also pose long-term risks, particularly for utilities with ageing infrastructure or those located near industrial zones.
In a more deregulated environment, utilities will need to weigh short-term cost benefits against potential environmental and public health risks
During Trump’s first term, the rollback of certain Clean Water Act provisions allowed states more control over water quality standards, leading to inconsistent regulatory requirements and operational inefficiencies across states. While some utilities saw short-term savings, others incurred higher costs addressing contamination incidents that arose from lenient standards. This underscores a potential downside to deregulation, where immediate savings may eventually be offset by the cost of environmental cleanup.
The anticipated decrease in federal climate resilience funding poses additional challenges for utilities, which may need to secure alternative financing for critical infrastructure vulnerable to extreme weather events. Funding shortages could increase financial strain on utilities in high-risk regions, leading them to seek private partnerships or state grants for necessary improvements.
In a more deregulated environment, utilities will need to weigh short-term cost benefits against the potential environmental and public health risks. Adopting proactive approaches — such as investing in predictive monitoring technologies and diversified funding sources — may help utilities navigate the risks associated with reduced regulatory oversight while continuing to deliver safe and reliable water services.
Implications for water-related industries: adjusting to a deregulated landscape
With water policy shifting from federal mandates to private-sector-driven initiatives, various water-related industries may need to adapt. Reduced federal support for sustainability and climate resilience projects could alter demand within sectors such as engineering, water treatment, and digital solutions, moving from compliance-focused solutions to market-driven approaches.
Engineering and construction firms
With a reduced emphasis on federally mandated projects for green infrastructure and flood resilience, engineering and construction firms may expect fewer public-sector contracts focused on sustainability. Instead, they are likely to seek private-sector partnerships with industries needing efficient, cost-effective solutions for immediate needs. Sectors like resource extraction, which require substantial water management but prioritize cost control, present a promising market.
To counter reduced domestic demand, U.S. firms might expand internationally, targeting regions with strict environmental regulations and growing infrastructure investments. For instance, the European Union and parts of Asia are investing in sustainable infrastructure, providing opportunities for American firms to export expertise in areas like stormwater management and wastewater treatment.
Water treatment sector
The water treatment industry may also experience lower domestic demand due to relaxed regulations, reducing the need for advanced treatment technologies. However, industries with stringent internal standards — such as pharmaceuticals, food and beverage, and manufacturing — will still require high-quality water treatment solutions.
International markets offer growth opportunities for U.S. water treatment companies. Regions with strict water quality standards, like the EU, Japan, and the Middle East, as well as rapidly urbanizing areas in Africa and Southeast Asia, continue to prioritize water infrastructure improvements. By focusing on these markets, U.S. firms can diversify and offset potential declines in domestic demand.
Digitalization and technology solutions
Deregulation may decrease demand for compliance-based digital tools in the U.S., as sectors focused on regulatory reporting may cut investment in such technologies. Nonetheless, digitalization remains crucial for operational efficiency, resource management, and cost control — particularly in agriculture, manufacturing, and resource extraction.
Focus on cost-effective operations may spark interest in tools for water monitoring, leak detection, and predictive maintenance
The emphasis on cost-effective operations is likely to drive interest in tools that monitor water usage, detect leaks, and support predictive maintenance. By highlighting these economic benefits, digital solution providers can align their products with the administration’s market-focused approach.
Once again, U.S. firms can take advantage of additional opportunities in global markets that do prioritize environmental protection and compliance. The EU's strong commitment to sustainability supports demand for advanced water management technologies, while emerging economies see value in digital tools that improve water efficiency in sectors like agriculture and urban planning.
Positioning for growth in a deregulated landscape
For water-related industries, Trump’s policy shift presents both challenges and opportunities. As companies adapt to a deregulated U.S. environment, expanding into international markets with stringent environmental standards offers a way to maintain growth. As described above, engineering, water treatment, and digital technology firms may need to diversify their services, emphasizing cost efficiency domestically while capturing demand in international regions that prioritize sustainable water management.
Navigating this evolving landscape requires adaptability. Some companies may embrace the streamlined regulatory environment, focusing on cost-effective, market-oriented solutions and quick project turnarounds. Others may voluntarily uphold high environmental standards, appealing to a growing public interest in sustainable water management. By balancing economic goals with environmental responsibility, U.S. companies have the potential to lead both in the domestic and global water sectors, positioning themselves for long-term growth.