Election Law / Legislative News – Page 27

Navigating Tariff Threats Under the Trump Administration, Challenges Ahead for the EV and Battery Supply Chain

As President-elect Donald Trump prepares to assume office on January 20, numerous tariff proposals have already been put forward that could significantly impact the electric vehicle (EV) and battery supply chain industry. Differentiating between the potential for immediate tariff actions and those requiring more time to implement is critical for companies that are in preparation of such actions.
In general, the imposition of new duties or tariffs typically requires congressional oversight and findings from relevant government agencies, a process that can extend over several months. This includes mechanisms such as the Section 301 tariffs on imports of China-origin products, where tariffs on EVs, battery parts, and critical minerals were recently increased, along with future increases on semiconductors, natural graphite, and permanent magnets that are scheduled for action. Expanding these existing actions would take time for the administration to implement.
However, President-elect Trump may seek to expedite tariff impositions through alternative legal avenues such as the International Emergency Economic Powers Act (IEEPA). While unprecedented, these actions would align with the upcoming administration’s proposals, including potential duty increases on imports from Mexico and Canada, where reports suggest implementation as early as the President-elect’s first day in office.
Such measures could significantly impact the EV supply chain and related industries, necessitating close monitoring of these developments during 2025.
What to Watch in 2025 and Beyond
1. Tariff Increases and Trade Policies: The Trump Administration’s trade policies are expected to focus on increasing tariffs, particularly on imports from China. The continuation or expansion of Section 301 tariffs on EVs, battery parts, and critical minerals could raise costs and disrupt supply chains. The administration may expedite tariff impositions through legal avenues like the IEEPA, potentially impacting imports from a host of US trading partners. Close monitoring of policy developments is the first step. Understanding their transactional impact can mitigate tariff exposure and corporate uncertainty.
2. Global Competitiveness and Supply Chain Dependencies: The administration’s protectionist stance may bolster domestic production but could also increase manufacturing costs and limit vehicle choices. The emphasis on “decoupling” from China suggests a continuation of aggressive tariff strategies, particularly on critical minerals essential for EV batteries. Industry stakeholders seeking to explore a diversified supply chains will need strategic advice prior to launching new production sites or supply partners.
3. USMCA: The United States-Mexico-Canada Agreement (USMCA) is scheduled for a trilateral review and renegotiation during 2026. Key provisions in the pact are particularly important for the EV supply chain into the United States. Some of President-elect Trump’s tariff proposals on Mexico and Canada could be tactics for leverage in the lead-up to these negotiations and provide opportunities for the Trump Administration to negotiate Free Trade Agreements (FTAs) with other countries, potentially affecting the EV and battery supply chain. Industry leaders should take stock of their current use of the USMCA tariff preference opportunities and what potential changes in the minutiae of trade rules could mean for both suppliers and customers. While 2026 is the year of USMCA talks, 2025 will be the year of industry consultations by Ottawa, Washington, and Mexico City.
4. FTAs and Trade Negotiations: The Trump Administration may prioritize renegotiating existing FTAs and pursuing new agreements with countries that align to the administration’s goals for domestic EV and battery production. The direction of such potential FTA developments will likely be impacted by the upcoming USMCA renegotiations. The US-Japan Trade Agreement could also serve as a framework for limited bilateral FTAs with new partners. FTA’s bring tariff preferences but they also require a sophisticated understanding of country-of-origin rules and other trade calculations that are far from intuitive. Stakeholders may wish to seek our advice on particular FTAs with key US trade partners to be best prepared to understand company-specific implications and to work with Washington during the negotiation stages.
5. Legal and Political Challenges in Trade Policy: While the president has some authority to influence trade agreements, unilateral withdrawal from FTAs could face legal and political challenges from Congress. The administration may use national security exceptions to modify duty-free provisions, but such actions would require careful justification. The potential for uncertainty and long-term risk exposure is high for companies involved in the EV manufacturing industry.

New Year Resolutions Triggered by Senate Bill 382

After the North Carolina General Assembly overrode Governor Cooper’s veto of Senate Bill 382, which became Session Law 2024-57 (the “New Law”), we published a client alert describing the state-wide effect of the New Law.
With the General Assembly’s 2024 Session concluded, some interested parties hope the General Assembly might repeal or amend the New Law in 2025. But regardless of the General Assembly’s future action, the New Law controls today.
Our first alert detailed the new limitations imposed on local government zoning authority, highlighting that the New Law applies to all zoning laws adopted after June 14, 2024 (the “Effective Date”).
This alert identifies practical New Year Resolutions for local governments and property owners to consider making because of the New Law.
Resolutions for Local Governments
Because the New Law invalidates all “down-zonings” adopted after the Effective Date and a down-zoning is a law which (1) reduces density, (2) reduces the number of permitted uses, or (3) creates a nonconformity on non-residential property, local governments should consider the following:
1. Review and Categorize: Consider identifying zoning regulations adopted after the Effective Date and divide them into three categories: (A) laws that are down-zoning under the New Law, (B) laws that might be down-zoning under the New Law, and (C) laws that are not down-zoning under the New Law. For laws falling into category (A), the local government should direct staff to not enforce these laws at this time. For regulations falling within category (B), the answer is uncertain, but enforcement of these regulations may trigger litigation, including claims for attorney fees and monetary claims.

Simple. Right? Of course not!
Note the Distinctions: Some local land use regulations are authorized by the General Assembly as zoning regulations and as local police authority regulations. For example, the General Assembly adopted statutes enabling local floodplain regulations and water supply watershed regulations.
Authorized by the General Assembly (N.C.G.S. §160D-103), many local governments have simplified and unified local land use regulations for citizen convenience through adopting and codifying all land use regulations together in a unified development ordinance. The New Law applies to “zoning regulations,” but does the New Law apply to zoning regulations when such regulations are separately authorized by the General Assembly? The New Law does not expressly answer this question.
2. Consider Moratoria: While waiting (and perhaps hoping) for action by the General Assembly, development moves forward. Under the New Law, the right to develop is vested as permitted on the Effective Date. Can the General Assembly later modify this right? The answer is beyond the scope of this alert.
But let’s assume the General Assembly has authority to remove or modify this right by new legislation. For projects where an applicant has submitted an application for a development permit or approval after the Effective Date, the applicant secures a separate, independent vested right via the permit choice statutes.
Is there anything a local government can do to, perhaps, minimize vesting under the New Law by permit choice while the General Assembly might be considering changes to the New Law? Local governments may consider adopting a targeted moratorium on issuing development approvals to lessen obvious adverse impacts to public health and safety.
The possible advantage of adopting a moratorium would be to stay processing of applications for development approvals and issuing development approvals. As N.C.G.S. § 160D-107 is worded, permit choice may only apply to complete applications submitted before the moratorium became effective.
When, specifically, might a moratorium be appropriate? When a local government adopted new FEMA flood maps after the Effective Date. Local governments do not create these federal government maps but do adopt them so their citizens may purchase federal flood insurance. A moratorium provides “breathing room” for local governments to adopt standalone flood hazard regulations outside the reach of the New Law while awaiting clarifying action by the General Assembly.
But even a moratorium doesn’t provide breathing room for all development within newly identified flood prone areas. Local governments lack authority to adopt a moratorium on “development regulations governing residential uses.” N.C.G.S. § 160D-107.

Therefore, local governments have many potential New Year Resolutions but none of them restore the status quo existing before the New Law.
Resolutions for Property Owners and Developers
Local governments have many New Year Resolutions to consider, but for property owners and developers, New Year Resolutions are fewer and simpler:
1. Verify Zoning Laws: Property owners have a vested right in the zoning laws existing on the Effective Date. Like a contract, these laws establish specific rights. While most times, an electronic copy of zoning regulations is available on local government websites, frequently they are not completely current. Property owners should consider seeking a certified copy from the local government of all land use laws existing on the Effective Date. These are the terms of the property owners’ contract.
2. Expedite Development Plans: Property owners and developers who started designing a development and who like the terms of their contract should consider expediting their design and planning activity to submit a complete application and vest their development rights via permit choice. This will provide certainty that they can move forward under the version of zoning regulations existing on the Effective Date.

Like most significant changes in law, the New Law adds to the “to do” list for a New Year and the New Year brings potential for changes to the New Law. Stay tuned.
Jordan Love contributed to this article

5 Trends to Watch: 2025 Energy Regulation and Development

As a new administration takes office in 2025, several new energy policy trends are expected to emerge, reflecting the inherent tension that often exists between political desires and economic realities. For example, while the incoming Trump administration has expressed a desire to claw back subsidies made available under the Inflation Reduction Act (IRA), Republican states have also been significant beneficiaries under the IRA. In other areas such as import tariffs, bipartisan support could emerge, with each party supporting the same result for entirely different reasons. Five trends that could result are discussed below.

Carbon-Related Tariffs Could Reshape Global Trade and Business Strategy. The convergence of increased bipartisan support for import tariffs, albeit for different reasons, could result in a significant shift in international trade dynamics and potential costs for energy companies. President-elect Donald Trump has frequently expressed support for import tariffs as a tool to boost domestic manufacturing, increase revenues, or to create leverage for international negotiations. Democrats have supported adoption of carbon tariffs and mechanisms like the Carbon Border Price Adjustment Mechanism (CBAM) that is being implemented in the European Union to level the playing field for businesses investing in emissions reduction. Adoption of the European Union’s CBAM has created new operational challenges for companies throughout the world, and similar measures in the United States would add to that already complex legal and business landscape. Companies invested in renewable energy projects or reliant on imported components like solar panels and batteries should ensure transparency and awareness of their supply chains, monitor ongoing developments, and prepare for potential cost increases and supply chain disruptions.
IRA Tax Credit Future Critical for Energy Investment Decisions. While Trump has expressed opposition to the IRA, the established tax credits present a complex economic and political challenge. Republican-controlled states have been significant beneficiaries of investments generated by IRA tax credits, and many traditional energy companies have already made substantial investments based on these incentives, particularly in energy production and carbon sequestration projects. This creates significant economic pressure to maintain existing credits. However, uncertainty looms over funds yet to be distributed by the government, as well as details of future Internal Revenue Service guidance on IRA tax credits. This creates the potential to impact short- and mid-term investment decisions and may create a temporary chilling effect on new investments as stakeholders await additional clarity on implementation guidelines. Companies should closely monitor these developments, particularly those with pending applications or planning future projects dependent on IRA incentives.
Support for Clean Hydrogen Production Tax Credit Requires a Balancing of Interests. The clean hydrogen market has experienced record investment growth, catalyzed by the IRA’s tax credits. Many of these investments are being made by traditional energy companies. However, uncertainty remains over whether and to what extent the IRS will adopt stringent requirements advocated by many environmental organizations. These would require the renewable electricity to be produced from newly constructed generation (additionality), in the same hour as hydrogen is produced (temporal matching), and in the same region as hydrogen is produced (geographic matching). How the IRS resolves these issues could have a material impact on future green hydrogen investments. Here, the Trump administration will again be confronted by tension between its more general desire to claw back IRA incentives and the economic reality of significant investment to date along with support by traditional energy companies for continued future investments and increased financial certainty. This balancing of interests may result in adoption of technology neutral policies that are intended to reduce barriers to entry and increase economic certainty for investors.
Carbon Sequestration Gains Momentum Across Political Spectrum. Carbon sequestration offers traditional energy companies and carbon emitters a rare point of bipartisan consensus in energy policy, offering traditional energy companies a pathway to sustainability while maintaining core operations. With former North Dakota Gov. Doug Burgum, a prominent carbon capture and storage (CCS) advocate, announced as Trump’s nominee to lead the Interior Department, the technology could see expanded support. Carbon sequestration appeals to many environmental advocates seeking emissions reductions and to fossil fuel companies seeking to leverage their existing expertise in pipeline construction and drilling to create new opportunities in a transitioning energy market. This dual benefit of maintaining energy security while reducing carbon footprint positions CCS as a critical component in the energy transition landscape and will continue to attract support from both environmental advocates and traditional energy producers in 2025.
Renewed Support for Conventional Energy Production. A significant transformation in federal energy policy is anticipated in 2025, with renewed support for conventional energy development, including through expanded availability of federal oil leases, reduced regulation, and reconsideration of regulations that have been adopted to increase the cost of fossil fuel energy production. The Bureau of Land Management’s current restrictions on coal mining are expected to be reversed, while federal leasing for oil, uranium, and other mineral resources is likely to accelerate. This shift extends beyond mere leasing policies, however, as the Department of Justice will likely adopt a more industry-friendly stance overall. For example, enforcement of environmental regulations, particularly regarding methane emissions and associated royalty payments, is likely to become less stringent. These changes could substantially reduce operational costs for natural gas producers and other conventional energy operators, potentially stimulating increased domestic energy production.

New Year, New Leave Laws – Understanding State Leave Law Updates Effective January 1, 2025

When did you last look at your employee leave policies? As the calendar turns to a new year, new changes often arrive, and 2025 is no exception. Employers should take note of the recent updates to state leave laws that went into effect on January 1, 2025.
Here are some states have implemented new or expanded leave laws as of January 1, 2025:
Connecticut
Employers with 25 or more employees working in the state of Connecticut must provide paid sick leave to all employees. Employees can accrue one hour of paid sick leave for every 30 hours worked, up to a maximum of 40 hours per year. Employers now have the option to frontload the paid sick leave at the beginning of each year, rather than being required to carry over unused leave to the next year. This leave can be used for the diagnosis, care, or treatment of an employee’s or their family member’s illness or injury, or for specific needs related to family violence or sexual assault.
Delaware
Employers with 10 or more employees primarily working in Delaware must begin making payroll deductions for the Delaware Paid Family and Medical Leave Program. Employers are required to contribute 0.8% of wages, and they can require their employees to pay up to 50% of the cost of the program. The first contribution payment is due by April 30, 2025.
Maine
Maine employers are also required to begin making payroll deductions to the state’s Paid Family and Medical Leave Program. Unlike Delaware, the law applies to any employer with at least one employee based in Maine. Employers with 15 or more employees must contribute 1% of wages to the program, with the option to deduct up to 50% of this contribution from employees’ wages. Employers with fewer than 15 employees must contribute 0.5% of wages, and they can deduct the entire contribution from employees’ wages. Employers covered by this law must ensure they are registered in the Maine Leave Contributions Portal to start making payments. The first payment is due by April 30, 2025.
New York
New York now requires employers to provide all employees residing in the state with an additional 20 hours of paid prenatal personal leave for any healthcare services related to pregnancy. This includes services such as physical exams, medical procedures, testing, consultations with healthcare providers, end of pregnancy care, and fertility treatment. This leave is available only to the pregnant employee receiving healthcare services and does not extend to spouses, partners, or other support persons. Pregnant employees using this leave will be paid at their regular rate of pay or the applicable minimum wage rate, whichever is greater. Once the pregnancy concludes, the employee is no longer eligible for this additional leave.
Upcoming Changes in Other States
These are just a few of the state leave laws that took effect at the start of 2025. However, additional changes are on the horizon, including Michigan’s Earned Sick Time Act, effective February 21, 2025; Missouri’s paid sick leave law, effective May 1, 2025; and Nebraska’s paid sick leave law, effective October 1, 2025. As more laws are introduced throughout the year, staying informed about these changes is essential for ensuring compliance and effectively supporting employees.
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H-1B Visas: Will Trump 2.0 Be a Turning Point for Employers Needing Skilled Foreign Workers?

Takeaways

A second Trump administration may align U.S. immigration policy with U.S. workforce needs on this particular aspect more than the first one did.
Despite limitations, the H-1B visa program has been instrumental in sustaining U.S. dominance in technology and innovation.
Employers will need to stay on top of potential changes to the program.

Trump Tariffs Survival Guide: 10 Strategies for U.S. Importers

Tariffs remain the focus of the incoming Trump Administration. Over the past several months, the announcements from president-elect Trump and his transition team have been dynamic. We expect the Trump trade policy team to use creative methods to deliver aggressive new tariff policies this year.
There are several strategies U.S. importers may consider to cope with the anticipated tariff increases. Some of the strategies are lessons learned during the first Trump Administration (e.g., to mitigate the impact of the Section 301 tariffs on Chinese-origin imports). The key to success remains to plan ahead, understand the laws, and weigh all options.
Potential New U.S. Import Tariffs
Before turning to strategies, we outline the potential types of tariffs that have been shared by Trump insiders. For each type, we cover the potential tariff action, timing for such imposition, and our assessment of the potential likelihood of imposition. Exporters, please note that we may expect to see other countries impose retaliatory tariffs against imports from the United States following the increase of U.S. import tariffs. China, Canada, Mexico and the EU have all threatened such tariffs.

Chinese-Origin Goods.

Potential Tariff Action: Currently, the Section 301 tariffs on most imports of Chinese-origin goods are largely in the 25-50 percent range. During the Trump presidential campaign, we heard about a 60 percent tariff on all Chinese-origin goods. At the end of November 2024, president-elect Trump announced immediately upon taking office, tariffs on imports from China would increase by 10 percent. When coupled with the existing Section 301 tariffs, that action would result in a 35 to 60 percent tariff on such imports.
Timing: Such a tariff could be imposed using the same Section 301 of the Trade Act of 1974, but that method would take several months to implement. The wild card option under consideration (leaked on January 8, 2025) would be to use the president’s emergency authority under the International Emergency Economic Powers Act of 1977 (IEEPA), which would enable the incoming Administration to impose tariffs almost immediately. IEEPA has not been used previously to implement tariffs, so any such tariff action could be a bit of the Wild West.
Likelihood: Very likely.

Chinese-Owned or Operated Ports.

Potential Tariff Action: During the Trump presidential campaign, we heard brief threats about the imposition of tariffs on any goods, regardless of country of origin, that entered the United States through any Chinese-owned or operated ports.
Timing: Such a tariff could be implemented quickly after inauguration. Congress has delegated broad authority to the Executive Branch to impose tariffs for reasons of national security. Thus, the same IEEPA-type action could authorize such tariffs immediately upon inauguration, or potentially even Section 232 of the Trade Expansion Act. Any Section 232 action would require several months.
Likelihood: Not likely.

Mexico and Canada.

Potential Tariff Action: Trump has all but promised a 25 percent tariff on all imports from United States-Mexico-Canada Agreement (USMCA) partners Canada and Mexico. The USMCA was negotiated by the first Trump Administration. The agreement has a national security carveout (a theme here) that enables a party to the agreement to apply measures it considers necessary for protection of its own essential security interests. Thus, the USMCA gives the incoming Administration the pretext it needs to impose such tariffs.
Timing: Such a tariff could again be implemented quickly using IEEPA or much longer should negotiations drag on related to any such tariff. The immediate imposition of such a tariff would be aggressive, though not impossible. There is a decent chance the threat is being used as a negotiating tool (or stick) ahead of the 2026 joint review of the USMCA by the member parties.
Likelihood: Possible, but more likely used as negotiating leverage.

Universal Tariff.

Potential Tariff Action: The incoming Administration has also announced the potential for a 10 or even 20 percent universal tariff. Such a tariff would apply to all imports from all countries. However, in recent weeks, we have seen leaks that such a universal tariff would be targeted to imports relating to national security as follows: defense industrial supply chain (through tariffs on steel, iron, aluminum and copper); critical medical supplies (syringes, needles, vials and pharmaceutical materials); and energy production (batteries, rare earth minerals and even solar panels).
Timing: Such a tariff could again be implemented quickly using again using national security arguments. There are also recent reports that it would be phased in gradually to minimize disruption to supply chains and financial markets.
Likelihood: A broad universal tariff is not likely, but also not impossible. A universal tariff targeting imports relating to national security considerations is fairly likely.

Antidumping and Countervailing Duties.

Potential Tariff Action: President-elect Trump’s team is committed to the fair trade end of the free trade/fair trade spectrum. The main tool in that arsenal is an old one: antidumping duties and countervailing duties (AD/CVD). We expect the use of the AD/CVD laws to increase steadily during the incoming Trump administration. One major focus will be anti-circumvention proceedings that are designed to punish imports from countries where foreign manufacturers under AD/CVD orders may try to shift their production.
Timing: AD/CVD cases are slow by nature. No real changes will be noticeable until 2026 or 2027.
Likelihood: Very likely.

Top 10 Tariff Coping Strategies
The potential for new tariffs is substantial. We provide the following for consideration in preparing for such actions. Any plan requires tailoring to specific supply chains, products, and compliance realities. Sometimes a combination of the below strategies may be necessary.

Contract Negotiation: Review supplier and customer contracts to assess the assignment of liability for tariff increases; and negotiate favorable tariff burden-sharing.
Supply Chain Management: Consider suppliers in countries subject to lower tariffs, but be aware of the potential for AD/CVD and circumvention issues. Also consider sourcing a different product or raw material subject to a lower tariff rate. Don’t forget to examine whether manufacture in a third country using raw materials from a high tariff country creates a “substantial transformation,” such that the end product would be considered to originate in the third country. And of course, to the extent possible, review the possibility of sourcing from domestic suppliers.
Trade Agreements: Consider sourcing from countries subject to free trade agreements with the United States, which would enable duty-free imports. But do not assume that Canadian and Mexican goods will be duty-free; be aware of the potential of a national security-based tariff or renegotiated USMCA.
Trade Preference Programs: Keep an eye on potential programs that provide duty-free imports. For example, past programs included the Generalized System of Preferences (GSP) and the Miscellaneous Tariff Bill (MTB). But be aware that the GSP and MTB programs have been languishing without reauthorization by Congress for years.
In-Bond Shipments and Foreign Trade Zones (FTZ): If a company’s supply chain involves goods transiting through the United States, for sale elsewhere, consider use of in-bond shipments or an FTZ, where tariffs do not normally apply. But be aware that in-bond and FTZ schemes can involve high storage fees, rigorous accounting procedures, and other costs.
Duty Drawback: If manufacturing products in the United States for export, consider making use of a drawback program. Drawback enables importers to obtain refunds of certain U.S. duties paid on the imported component goods or materials. Section 301 duties are eligible for drawback, but AD/CVD are not.
Exclusions: If new tariffs are issued under Sections 301 or 232, consider seeking a tariff exclusion if such an administrative process is provided.
Comments: If Sections 301 or 232 are used, we expect to see a notice and comment period as part of the rulemaking, which should provide interested parties an opportunity to comment on the economic impact of the proposed tariffs.
Congressional Relations: Consider whether outreach to congressional delegations could help in any tariff mitigation strategy.
Litigation: We expect multiple lawsuits challenging the authority to impose certain tariffs. But U.S. courts have generally been receptive to the national security justifications offered for such tariffs, and the timeline to resolve such actions requires years.

In sum, while the imposition of additional tariffs will be challenging for U.S. importers, there are several possible strategies that may reduce certain negative impacts of these tariffs. All importers must carefully analyze any supply chain changes under the applicable laws, and each decision should be well documented and supported by the company’s written import policies and procedures.

Supreme Court Won’t Consider Federal Contractor Minimum Wage Mandate

The Supreme Court on Monday, Jan. 13, 2025, declined to take up a decision addressing the president’s authority under the Procurement Act to issue a minimum wage mandate for employees working on federal government contracts. The denial of the petition for certiorari keeps a circuit split intact, and leaves federal contractors to navigate the wage mandate’s uncertain legal status while complying with the latest minimum wage hike to $17.75 per hour, which took effect Jan. 1.
President Biden issued Executive Order (EO) 14026 in 2021, which increased from $10.95 to $15 the minimum hourly wage for employees working on federal government contracts, and provided for annual increases to the minimum wage. In 2022, the U.S. Department of Labor (DOL) issued regulations implementing the EO.
In the case rejected by the Supreme Court, a Colorado federal court refused to grant a preliminary injunction barring enforcement of the wage mandate. The U.S. Court of Appeals for the Tenth Circuit affirmed. Bradford v. United States DOL, 2024 U.S. App. LEXIS 10382 (D. Colo. Apr. 30, 2024). The appeals court held the plaintiffs were not likely to show that the DOL lacked statutory authority to issue the DOL rule implementing EO 14026. The appeals court did not issue a final decision on the merits, however. The plaintiffs’ petition for certiorari asked the justices to address whether the wage mandate exceeds the president’s authority under the Procurement Act and, if not, whether the statute improperly gives lawmaking authority to the president. Their petition was denied, leaving these critical questions unresolved.
Meanwhile, two other challenges to the federal contractor wage mandate are pending.
In November, the U.S. Court of Appeals for the Ninth Circuit held that the president lacked authority under the Procurement Act to issue EO 14026. State of Nebraska v. Su, 2024 U.S. App. LEXIS 28010 (9th Cir Nov. 5, 2024). The appeals court also held the DOL regulation implementing the EO was arbitrary and capricious because the DOL failed to consider alternatives to the $15 rate, such as a lower wage rate or phasing in the $15 rate over several years.
Again, however, the Ninth Circuit also did not address the merits. Instead of invalidating EO 14026 and the implementing regulation, the Ninth Circuit sent the case back to the federal district court in Arizona, which had upheld the wage mandate in a legal challenge brought by several states. On remand, the district court is expected to issue a preliminary injunction barring application of the wage mandate, although it is not clear whether the injunction will apply to just the plaintiff states (to the extent of their relationships with the federal government as federal contractors) or as a complete ban to enforcement within the states. On Dec. 20, 2024, the DOL filed a petition for en banc rehearing of the divided Ninth Circuit panel decision.
The wage mandate is also facing an ongoing challenge in the U.S. Court of Appeals for the Fifth Circuit. The appeals court will consider the Biden Administration’s appeal of a 2023 decision invalidating EO 14026 in a case brought by the states of Louisiana, Mississippi, and Texas. The Texas district court had narrowly enjoined the wage mandate only as applied to the plaintiff state governments, refusing to issue a nationwide injunction because it did not want to “encroach” upon other federal courts that had upheld the executive order. State of Texas v. Biden, 2023 U.S. Dist. LEXIS 171265 (S.D. Tex. Sept. 26, 2023). The appeals court heard oral argument last August. The Fifth Circuit could reverse the Texas court and uphold EO 14026, setting up a split with the Ninth Circuit. This outcome is unlikely, however.
For now, the minimum wage mandate is in effect. But a broader reprieve (through a variety of avenues) may be forthcoming. The Trump Administration may opt to abandon the Fifth Circuit appeal and the bid to rehear the Ninth Circuit panel’s holding. President-Elect Trump also may opt to rescind President Biden’s executive order and decline to defend the wage mandate.

GeTtin’ SALTy Episode 44 | California 2025 SALT Outlook [Podcast]

In the latest episode of the GeTtin’ SALTy podcast, host Nikki Dobay and guest Shail Shah, both shareholders at Greenberg Traurig, discuss the complexities of California’s state and local tax landscape as 2025 begins. The episode kicks off with a surprising announcement from Governor Gavin Newsom: California has shifted from a significant budget deficit to a surplus.
The discussion delves into the implications of this fiscal roller coaster, with Shail offering insights into Governor Newsom’s positioning on taxes. The conversation explores indirect tax increases through adjustments in apportionment factors and deductions.
Nikki and Shail address the changes in California’s apportionment rules from the 2024 budget. They provide updates on legal challenges against these retroactive changes, with organizations like the National Taxpayers Union questioning the constitutionality. This litigation is likely to shape the tax landscape in 2025, with potential outcomes still uncertain.
They also tackle the topic of California’s market-based sourcing regulations, which have been in development since 2017, and the future of FTB (Franchise Tax Board) guidance.
The episode concludes with a surprise non-tax question about the perils of a malfunctioning coffee maker.

2025 Budget Reconciliation Roadmap: Impacts and Action Steps

Overview
The budget reconciliation process is a critical legislative tool that allows Congress to pass budget-related measures with a simple majority in the Senate, bypassing the filibuster and expediting passage of significant legislative priorities. Established under the Congressional Budget Act of 1974, reconciliation is designed to align revenue and spending with Congress’ annual budget resolution. This mechanism is particularly valuable when one party controls Congress and the White House, as it allows major initiatives to advance without bipartisan support. However, reconciliation is subject to strict rules, including the “Byrd Rule,” which restricts provisions to those with direct budgetary impacts, i.e., with direct impact on either spending or revenues.
Prior Uses of Reconciliation During President Trump’s first term, budget reconciliation was a key tool for advancing significant legislative priorities, including the Tax Cuts and Jobs Act of 2017, which enacted sweeping tax changes. Similarly, the Biden Administration utilized reconciliation to pass key components of its agenda, such as the American Rescue Plan Act of 2021, which provided critical pandemic relief and economic stimulus. These examples highlight reconciliation’s utility in enacting transformative policies under unified government control.
Trump and Congressional Agenda for Reconciliation For the incoming Trump administration and Republican-majority Congress, reconciliation will be instrumental in enacting an ambitious agenda, that encompasses tax provisions, border security, energy production and deregulation, and defense funding. As stakeholders in energy, maritime, transportation, trade, defense, and railway, and Native American and Alaska Native affairs, all stakeholders should prepare for significant opportunities and risks as these measures take shape.
Reconciliation Strategy: One Bill or Two?President-elect Trump’s position on the scope and structure of reconciliation has evolved in recent weeks. While initially favoring a single comprehensive package, he has expressed openness to a two-bill strategy. The first bill would focus on energy, border security, and defense, while the second would address tax provisions and broader fiscal priorities.
House Speaker Mike Johnson (R-LA) has strongly advocated for a single reconciliation bill, arguing that it is the most efficient way to advance Trump’s agenda within the first 100 days. Johnson’s approach is supported by House Budget Committee Chairman Jodey Arrington (R-TX) and House Ways and Means Chairman Jason Smith (R-MO), who believe a unified package will maximize legislative momentum. However, Senate Republicans, including Budget Committee Chairman Lindsey Graham (R-SC), have emphasized the urgency of addressing border security and defense separately to mitigate national security risks, with tax policy changes following later this year in a second bill. This internal debate could impact the timeline and scope of reconciliation efforts.
Scope of Potential Legislation
Tax ProvisionsTax changes are expected to play a significant role in the reconciliation process, with the extension of the 2017 tax cuts at its core. These extensions aim to provide continued relief for businesses and high-earner individuals while reducing corporate tax rates further to enhance global competitiveness and attract investment. Additional measures under consideration include eliminating taxes on tipped income to support the service industry, eliminating taxes on Social Security benefits, simplifying the tax code by reducing brackets, and eliminating certain deductions to streamline compliance and reduce costs. A new revenue-generating mechanism involving tariffs on imports is also being proposed.
Border Security and DefenseBorder security and defense funding are poised to feature prominently in the reconciliation agenda. Significant allocations are anticipated for border wall construction, advanced surveillance technologies, and enhanced U.S. Customs and Border Protection and Immigration and Customs Enforcement operations. Simultaneously, the military will receive increased funding to address strategic vulnerabilities and modernize equipment. These measures not only aim to provide immediate legislative wins but also to mitigate pressing national security concerns.
Energy PolicyEnergy policy will focus on streamlining permitting processes for critical infrastructure projects, such as pipelines, renewable energy installations, and oil and gas export terminals. Domestic energy production will be promoted through the reduction of regulatory barriers, particularly in the oil, gas, and nuclear sectors. Further, energy independence initiatives, including incentives for clean energy and advanced technology adoption, will be advanced. However, proposals to reform environmental protections, such as the National Environmental Policy Act (“NEPA”) review process, are expected to face legal and public opposition, even as they aim to accelerate project timelines. Whether or not permitting reform meets the Byrd Rule by saving tax revenues remains to be seen.
Debt CeilingDebt ceiling adjustments are also on the table, with plans to raise the debt limit within the reconciliation package to ensure government solvency and avoid market disruptions. To secure support from conservative members, this increase will likely be paired with $2.5 trillion in spending cuts over ten years, focused on discretionary spending and the reduction of waste and inefficiencies. It remains to be seen whether these tax cuts can be balanced out simply with discretionary spending cuts. Balancing the debt limit increase with long-term fiscal sustainability will be a key focus.
Tentative Timeline and Legislative Actions

Early February: Adoption of a budget resolution with reconciliation instructions is expected, providing the framework for committees to draft detailed legislation.
March 14, 2025: Deadline to pass final fiscal 2025 spending bills to avoid a government shutdown.
Early April: House passage of the reconciliation package, with the goal of Senate approval by the end of April or early May.
May 2025: Final reconciliation measures enacted, aligning with Trump’s first 100 days.
It is important to note that this is an ambitious one-bill strategy timeline, and dates could be delayed due to lengthy negotiations. A two-bill approach may stretch until the end of the 2025 calendar year to meet the deadline for expiration of the original Trump tax cuts.

Implications for Stakeholders
EnergyIn the energy sector, increased project approvals and decreased regulatory hurdles may present significant opportunities for developers of fossil fuels, renewables, and nuclear energy. However, potential reforms of environmental protections may lead to legal risks for stakeholders. Moreover, the introduction of tariffs on imports, aimed at funding reconciliation priorities, could disrupt supply chains for energy infrastructure projects reliant on imported materials and potentially cause consumer prices to rise, creating inflation-related risks. This may be ameliorated if the incoming Administration, as reported, focuses the tariffs on only certain critical imports. This may, though, positively impact domestic energy producers due to an increased demand for low-cost, non-tariffed energy.
Maritime and TransportationThe maritime and transportation sectors stand to benefit from infrastructure investments that could drive growth in port modernization and rail projects. Streamlined regulatory approvals are expected to accelerate construction timelines, creating additional opportunities for stakeholders involved in large-scale projects. However, proposed discretionary spending cuts could reduce the availability of federal grants that support critical transportation infrastructure upgrades.
Native American/Alaska Native AffairsFor Native American and Alaska Native communities, the reallocation of federal funding poses a significant risk to vital services, including healthcare, education, and housing programs. Advocacy will be essential to ensure equitable treatment and representation in legislative negotiations. Despite these challenges, tribes, native organizations, and corporations may find opportunities to leverage energy and infrastructure investments to promote economic development, including through federal contracts, provided their interests are safeguarded in the reconciliation process.
What to Watch
Legislative DevelopmentsThe reconciliation strategy debate between a single comprehensive package and a two-bill approach will significantly shape the legislative process. Stakeholders should closely monitor the resolution of this debate, as it will determine the sequencing, timeline, and scope of legislative priorities. The progress of key committees in drafting specific provisions will also be critical to understanding how reconciliation impacts various industries.
Stakeholder AdvocacyProactive stakeholder advocacy will play a vital role in shaping favorable outcomes. Engaging with congressional offices to advocate for specific language in reconciliation provisions, particularly those impacting energy, defense, transportation, trade, and tribal programs, will be essential. Building coalitions to amplify industry voices and address shared concerns about proposed cuts or regulatory changes can further strengthen advocacy efforts.
Market ImpactsAdditionally, stakeholders should evaluate the market implications of proposed tax policies, including corporate rate reductions and import tariffs, to understand their potential impact on profitability and supply chain operations. Assessing the implications of energy deregulation measures on project feasibility and financing opportunities will also be critical. Finally, stakeholders should prepare for potential shifts in federal funding priorities, particularly those affecting grant-dependent programs and projects, to mitigate risks while seizing new opportunities.
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Extended Producer Responsibility for Packaging: Taking Stock for 2025

The Extended Producer Responsibility (“EPR”) movement for packaging is growing in the U.S., marking a shift in how some states are approaching waste management and recycling. Rather than leaving municipalities to bear the full cost of waste management and recycling programs, states with EPR programs are poised to shift costs associated with building out recycling infrastructure to producers of products covered by EPR requirements. In 2024, there were significant legislative, regulatory, and programmatic developments in several states. We expect these trends to accelerate in 2025, as several programs reach the initial implementation phase of their EPR programs.
Legislative Developments
Since 2021, five states (Maine, Oregon, Colorado, California, and Minnesota) have passed EPR programs for packaging, and more are considering similar legislation. These programs target “producers,” typically defined as the manufacturer or brand owner for packaged products sold in the relevant state. Producers are generally required to join a Producer Responsibility Organization (“PRO”), which is responsible for collecting data regarding the volume of single-use packaging being sold into the state, charging producer fees based on their contribution, and using the funds to improve recycling infrastructure across the state.
In May of 2024, Minnesota passed legislation for a statewide EPR program addressing most types of packaging and paper products. A number of other states considered some form of EPR legislation in 2024. Although these measures were not adopted, we expect to see advances in 2025. States to watch include Massachusetts, which in December passed legislation calling for a legislative commission on EPR for several product categories, including plastics and packaging, paint, mattresses, and lithium-ion batteries; New York, which has been working on passing EPR legislation for several years; and Washington, which already imposes post-consumer recycled content and other requirements for plastic product packaging and recently considered but failed to pass a bill that would have added packaging to the state’s existing product classes subject to product stewardship programs.
Regulatory Developments
States with existing EPR programs spent the year developing regulatory programs. Colorado, Oregon, and Maine all adopted regulations in 2024. These regulations define key program terms, such as criteria for setting producer fees and conditions of reimbursing municipalities for program implementation costs. California initiated the rulemaking process in 2024, but missed the statutory deadline. CalRecycle will likely adopt final rules soon.
Key issues to watch as regulatory programs develop include covered product exemptions and ecomodulation provisions, which allow the PRO to offer fee adjustments to producers that make changes to the way in which they produce, use, and market covered products, potentially leading to lower fees for covered products with a lower environmental impact.
Programmatic Developments
Different states have different timelines for selecting a PRO, adopting a PRO plan, and requiring producers to join a PRO and begin reporting. Circular Action Alliance (CAA) has emerged as the leading Producer Responsibility Organization (PRO) for states with EPR programs. So far, Colorado and California have both selected CAA as the official PRO.

Producers in Colorado were required to register with the PRO by October 1, 2024. CAA reporting guidance is now available to registered producers, and producers will begin reporting in August 2025. CAA’s program plan for Colorado is due early this year and will detail how CAA plans to establish costs, reimburse recyclers for services, and other program details for review by the state’s EPR advisory board.
In California, producers registration with CAA is open. Producers are waiting for CAA to publish a program plan to initiate program implementation ahead of the January 1, 2027 implementation date.
In Oregon, CAA was the only organization to submit a program plan for consideration by Oregon’s Department of Environmental Quality, and will likely be selected as the official PRO early this year. Implementation is moving forward most quickly in Oregon, where producers are required to pre-register with the PRO and submit data on covered products sold into the state by March 31, 2025. CAA plans to launch a producer reporting portal during the first quarter of 2025.
In Minnesota, the producer-appointed PRO is expected to register with a with the Minnesota Pollution Control Agency by July 1 of this year. On December 30, 2024, CAA submitted an application for registration to the agency .
In late summer, Maine is expected to release a request for proposal for a potential PRO, called a stewardship organization under Maine’s terminology, and CAA is expected to respond to Maine’s request.
Early this year, Maryland is expected to publish the results of its Needs Assessment, which evaluates and provides recommendations on the state’s recycling system, including infrastructure, labor, and environmental impacts. The Producer Responsibility Advisory Council has been meeting regularly since May of 2024 to draft recommendations for the Needs Assessment.

Key Tasks for Producers in 2025
Producers should focus on the following tasks in 2025:

Evaluate applicability under the five EPR programs that are already in place, including by assessing “small producer” exemptions and exemptions for certain categories of covered materials. Importantly, some covered material exemptions apply automatically, while some will require submitting documentation to the relevant states.
If not already done, register with CAA in Colorado, California, Oregon, and Minnesota.
Develop a data collection plan.
Assess opportunities for fee reduction, including by leveraging ecomodulation provisions and lifecycle assessments.
Continue to monitor new legislation, regulatory processes, and updates from CAA.

French Insider Episode 38: Securing the Future: Cybersecurity & Data Privacy in the Trump Era with Jonathan Meyer, Liisa Thomas and Carolyn Metnick of Sheppard Mullin [Podcast]

In this episode of French Insider, Sheppard Mullin partners Jonathan Meyer, Liisa Thomas and Carolyn Metnick join host and French Desk Co-Chair, Valérie Demont, to explore the evolving landscape of cybersecurity and privacy under a new Trump administration.
What We Discussed in This Episode:

What is CISA and what is its role in cybersecurity?
What can we expect from the Trump administration regarding cybersecurity?
Could we see less regulation but greater enforcement?
Might there be more stringent regulation with respect to cyber attacks and private ransomware?
Where does the United States currently stand in terms of privacy law?
What is the current status of state and federal privacy laws in relation to the healthcare industry?
In terms of privacy, where could enforcement be headed under the incoming administration?
How do the various state attorneys general and federal agencies coordinate on enforcement?
What enforcement trends should businesses be aware of, and what do they need to focus on?
What specific enforcement trends are we seeing in the healthcare space?
Generally speaking, what types of penalties could result from enforcement actions?
Could a company’s officers and directors face personal liability, either criminal or civil?
How might class action litigation originate from a cybersecurity or privacy incident?
What should businesses prioritize in terms of cybersecurity and privacy compliance?

The Impact of Trump’s Tariffs on the Wine Industry: Past and Future

The wine industry faced significant challenges due to tariffs imposed by President Trump’s first administration. During the presidential campaign, and since his election on November 5, 2024, President Trump has made it clear that he will enact higher tariffs as a key part of the political agenda of his second administration. A few days ago, he nominated Jamieson Greer as his pick for U.S. Trade Representative as the nation’s top trade official, who served as chief of staff to Robert Lighthizer, then U.S. Trade Representative during Trump’s first term; if confirmed by the U.S. Senate, Mr. Greer is expected “to pursue an ambitious trade agenda.” This post highlights the history of Trump’s tariffs on wine, their effects, and what might be expected in his new term.
Trump’s First Term: A Retrospective
In October 2019, the Trump administration imposed a 25% tariff on still wines under 14% alcohol by volume from France, Germany, Spain, and the United Kingdom. These tariffs were part of a broader trade dispute with the European Union over subsidies to aerospace companies. The tariffs led to increased costs for importers, distributors, and ultimately consumers, causing significant disruption in the wine market.
Notable Effects of the 2019 Tariffs:

Increased Prices: The cost of European wines in the U.S. rose, leading to higher prices for consumers. The tariffs specifically targeted alcoholic beverages. However, supplies such as barrels and other equipment were not subject to them.
Market Shifts: Some European producers adjusted their products to avoid tariffs, such as by increasing the alcohol content of their wines.
Economic Impact: The tariffs strained relationships with European trade partners and led to retaliatory tariffs on American products. For instance, the European Union imposed a 25% tariff on American whiskey and Harley-Davidson motorcycles.

Potential Tariffs in Trump’s New Term
As Trump begins his new term, there is speculation about the potential for new tariffs and their impact on the wine industry. Trump has indicated a willingness to impose even higher tariffs on a broader range of products. Here are some possibilities:

Broader Tariffs: Trump has suggested tariffs as high as 100% on goods from China and 25% on goods from Mexico and Canada. When Trump imposed tariffs on China in his first administration, in April 2018, China retaliated by imposing a 15% tariff on U.S. wine. Thus, broader tariffs in Trump’s second administration could impact (directly or indirectly) the wine industry.
Economic Consequences: Higher tariffs could lead to a “long-term war” in trade, affecting thousands of jobs and causing economic instability.
Industry Response: The wine industry is already preparing for potential disruptions. Importers and retailers are considering stockpiling European wines to hedge against future price increases.

The Broader Economic Context
The potential for new tariffs comes at a time when the global economy is already facing significant challenges. The COVID-19 pandemic had already disrupted supply chains and led to economic slowdowns worldwide. In this context, additional tariffs could exacerbate existing problems and create new ones.

Supply Chain Disruptions: The wine industry relies on a complex global supply chain. Tariffs can disrupt this chain by increasing costs and creating uncertainty.
Consumer Behavior: Higher prices for imported wines may lead consumers to switch to domestic alternatives or reduce their overall wine consumption.
Global Trade Relations: Tariffs can strain relationships between countries and lead to retaliatory measures, further complicating international trade.

Industry Strategies and Adaptations
The wine industry has shown resilience in the face of past challenges and is likely to adapt to new tariffs as well. Some strategies that industry stakeholders might employ include:

Diversifying Supply Chains: Importers may seek to diversify their sources of wine to reduce reliance on countries subject to tariffs.
Product Adjustments: Producers might adjust their products to avoid tariffs, such as by changing the alcohol content or packaging size.
Advocacy and Negotiation: Industry groups may engage in advocacy efforts to influence trade policy and negotiate for more favorable terms.

Conclusion
The wine industry faces significant uncertainty as President Trump begins his new term. The tariffs imposed during his first term had far-reaching effects, and new tariffs could exacerbate these challenges. Industry stakeholders are bracing for potential economic fallout and preparing strategies to mitigate the impact. As the situation evolves, the wine industry will need to navigate these complexities to maintain stability and growth.
The future of the wine industry under Trump’s new term remains uncertain, but one thing is clear: the industry will need to remain adaptable and resilient in the face of ongoing challenges. By understanding the potential impacts of new tariffs and preparing accordingly, the wine industry can continue to thrive despite the obstacles it may encounter.