Prospects for Latin American Finance Under a Second Trump Administration
Latin American economies are uniquely positioned due to their geographical proximity to the United States, extensive economic integration, significant immigration patterns and potential for growth. The U.S. serves as the dominant market for exports from the region, while millions of Latin American migrants contribute substantial remittance flows to their countries of origin. As the region prepares for potential changes under a second Trump administration, there could be profound implications for Latin American economies, regional trade, and financing available from international sources.
One of the primary concerns surrounding Donald Trump’s return to the White House is the resurgence of high tariffs that characterized his previous administration. These tariffs, often imposed on key trading partners, could disrupt Latin American economies by increasing the cost of exporting goods to the U.S. But beyond that, the new administration has begun to make significant changes that will have considerable effects on the financial markets and the access to capital in Latin America.
Banking Markets
Under President Trump, the expected revival of U.S. banking sector deregulation might have ripple effects on Latin American banks. If the Trump administration continues to emphasize its expansionist view and priorities, Latin American banks could see increased competition, especially from U.S. institutions looking to expand their footprint in the region. This could lead to more favorable lending conditions for Latin American borrowers, provided they meet stringent compliance and creditworthiness standards that may be utilized by U.S.-based banks.
U.S. banks could see renewed interest in Latin America as they seek to diversify their portfolios and tap into emerging markets. The potential for infrastructure projects, especially in countries like Brazil and Mexico, should attract U.S. bank financing. This scenario could also lead to increased lending activity, particularly for sectors such as energy, agriculture and technology. The ability to navigate regulatory challenges and foster relationships with U.S. banks could unlock new avenues for financing.
Additionally, international credit providers might be more inclined to engage in syndicated loans with Latin American banks, particularly those demonstrating resilience in their financial metrics. This may well result in a more robust banking market and tighter spreads available to Latin American borrowers.
Bond Markets
The second Trump presidency could have both negative and positive implications for Latin American issuers in the bond markets. On one hand, a strong dollar policy may deter Latin American issuers from accessing international markets as it would be more expensive for Latin American countries to issue bonds in U.S. dollars. In addition, the levels of uncertainty that in many ways characterized the first as well as the current Trump administration could have a chilling effect on the financial markets, where stability typically favors more robust issuance levels. However, if the Trump administration pursues policies that favor economic growth, commodity prices could increase, thereby enhancing the scenario for commodity-dependent Latin American nations. This could also lead to a resurgence in demand for sovereign bonds, especially from more frequent issuers such as Mexico and Brazil.
The bond markets may experience a surge in issuance from Latin American sovereigns and corporates looking for capital from international investors. A favorable U.S. interest rate environment could encourage more capital flow into Latin American bonds, especially if U.S. yields remain low. Furthermore, an increase in the issuance of project bonds could result from increased interest by U.S. authorities or, in the absence of U.S. interest, multilateral institutions, in prioritizing infrastructure projects in the region. This trend could also see increased participation from ESG-focused investors, as Latin American issuers adapt to global sustainability trends while U.S. based issuers move away from ESG in line with the administration’s priorities.
As Latin American economies seek to grow, there may be increased opportunities for securitization of various cash flows—such as those from infrastructure, real estate, and consumer finance. This could attract international investors seeking higher yields. A robust structured finance market may be available to potential borrowers when there are less than favorable financial terms available in the more traditional debt and credit markets. These types of transactions are typically executed in the bank market or as a private placement of securities to a small group of investors, although in some instances where the deal size exceeds $100 million, sponsors have chosen to tap the Rule 144A market for a wider distribution to investors and increased liquidity.
Finally, the potential for increased U.S.-Latin America trade agreements could bolster confidence among international investors, resulting in more favorable yields for bond issuers. Regional governments may capitalize on this by issuing longer-term bonds to finance infrastructure projects, thus attracting more foreign capital.
Equity Markets
In the equity markets, Latin American companies could benefit from a favorable investment climate if the Trump administration takes steps to foster a business-friendly approach. Increased foreign direct investment from the U.S. could lead to a surge in initial public offerings (IPOs) and secondary offerings for issuers in the region. Sectors that could see significant interest include technology, renewable energy, and agribusiness, as investors seek to diversify their portfolios.
However, equity markets in Latin America could face volatility under a second Trump presidency, driven by fluctuating U.S.-Latin America relations. Despite and as a result of the volatility, international investors could find investment opportunities in emerging tech companies and renewable energy initiatives, especially in countries like Chile and Colombia, which are positioning themselves as leaders in these sectors. The Brazilian markets have been particularly slow after a flurry of activity during the COVID pandemic, although penned up need for capital and investor interest are expected to contribute to a more active market in 2025.
Geopolitical tensions, particularly between the U.S. and China, could further complicate matters for Latin American companies that rely heavily on export markets. A number of tariffs have been levied on various countries and industries during the early days of the second Trump administration, demonstrating that the administration will continue to use tariffs and the threat thereof as a foreign policy tool. Potential equity issuers and investors will certainly monitor how the Trump administration’s policies influence trade relationships and the macroeconomic environment.
ESG Finance
The return of Donald Trump to the White House has resulted in concerns about significant shifts in U.S. climate policy. Although the green bond market for Latin American corporate issuers is expected to grow, diminished political support for ESG investing in Washington could challenge the lending strategies of U.S.-based banks. President Trump has openly criticized ESG regulations, and his administration has advocated for the reversal of climate-related disclosure mandates. The administration is also anticipated to reduce the regulatory authority of federal agencies on issues like air quality, potentially resulting in increased greenhouse gas emissions. Signing a presidential executive order withdrawing the United States from the Paris Agreement was one of President Trump’s first actions as President, which could impact the decarbonization goals of the world’s largest economy.
While climate policy might not be prioritized under President Trump, Latin American companies’ investments in decarbonization and sustainability efforts are likely to ensure a consistent supply of green and other labeled bonds from the region. Global investor demand is expected to remain strong, particularly from investors located outside of the United States. European portfolio managers often have mandates to incorporate ESG fixed income into their portfolios. However, this does not preclude investors—whether in the U.S. or Europe—without such mandates from investing in green bonds, especially if they foresee long-term returns. The demand for these bonds is expected to continue, with a robust buyer base potentially enhancing their performance in secondary markets.
Expectations of inflation under President Trump, partly due to protectionist trade policies, could exert upward pressure on U.S. Treasury yields, affecting Latin American issuers of both ESG and conventional bonds. While rising yields may slightly increase funding costs, they are not anticipated to close the market for Latin American issuers.
One area of concern is the potential impact on multilateral development banks (MDBs) from an anticipated shift away from climate finance under the Trump administration. Given the significant influence of the U.S. on major multilateral lenders, these institutions may face pressure to reduce their focus on ESG strategies. Many market participants have suggested that priorities may shift away from climate issues towards other areas, such as poverty alleviation. This shift would likely reflect changes in priorities from the U.S. Treasury, which holds substantial voting power at institutions like the International Monetary Fund and the World Bank, as well as the Inter-American Development Bank (IDB), where it possesses 30% of the voting shares.
Despite these potential changes, the World Bank Group and the IDB are looking to enhance their role in mobilizing private-sector support for climate-friendly infrastructure projects in the region. However, challenges such as contingent risks associated with infrastructure projects may hinder public-private financing arrangements. These risks raise concerns about repayment flows, which can deter private sector participation in these initiatives.
Finally, Wall Street banks are likely to remain engaged in the ESG market despite potential political shifts in the U.S. This suggests that regardless of the political climate, the financial sector may continue to facilitate the growth of the green bond market in Latin America, driven by global investor interest in sustainable investments.
Securities Law Considerations
Under a second Trump administration, changes in U.S. trade and economic policies could significantly impact the securities markets in Latin America. U.S. federal securities laws, primarily governed by the Securities Act of 1933 and the Securities Exchange Act of 1934 regulate the issuance and trading of securities. Latin American issuers seeking to raise capital from U.S. investors must navigate these regulations, including registration requirements and exemptions such as Rule 144A for private placements to qualified institutional buyers and Regulation D for less widely distributed private placements.
The Trump administration’s expected emphasis on deregulation could lead to a more favorable environment for cross-border investments, potentially easing regulatory constraints for Latin American companies accessing U.S. capital markets. Additionally, the U.S. Securities and Exchange Commission (SEC) might adopt a more lenient stance on compliance requirements, encouraging more Latin American companies to seek U.S. listings or engage in debt offerings to U.S. investors. In the early days of the Trump administration, the SEC has shifted resources away from crypto enforcement and has taken steps to dramatically reduce staff which should result in less regulatory overview with respect to the securities markets. These initiatives, as well as others, highlight the dynamic pace of change within the SEC and should result in a shifting regulatory landscape for issuers and market professionals.
Banking Law Considerations
In the banking sector, U.S. federal laws like the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Bank Holding Company Act regulate the operations of U.S. banks and their international transactions. A deregulatory approach under the Trump administration could reduce compliance burdens, making it easier for U.S. banks to operate and extend credit in Latin America. This may enhance competition and lead to more dynamic banking relationships between U.S. and Latin American financial institutions. Since assuming office in January 2025, Trump has signed a number of executive orders that indicate an aggressive agenda that will have significant effects on the banking industry. The administration has focused on rescinding diversity, equity and inclusion (DEI) initiatives within federal agencies, sought to ease the use of digital assets in the financial system and implemented a freeze on regulatory rulemaking while the administration evaluates its regulatory priorities. These various initiatives could affect the landscape applicable to Latin American borrowers seeking to access the credit markets.
Latin American banks looking to partner with U.S. entities must carefully consider compliance with anti-money laundering (AML) and know-your-customer (KYC) regulations, which are likely to remain stringent regardless of broader deregulatory trends. These regulations ensure the integrity of international banking operations and prevent illicit financial activities.
Conclusion
The return of Donald Trump to the U.S. presidency has already introduced significant shifts in trade, economic, and financial policies affecting Latin America. While increased tariffs and restrictive immigration policies may pose challenges, opportunities in banking, securities, and structured finance could arise from a deregulatory environment and a renewed focus on U.S.-Latin American relations.
Latin American economies will need to strategically navigate these changes to optimize their financial and trade engagements with the U.S. Enhanced cooperation with U.S. financial institutions, coupled with a focus on sectors aligned with global sustainability trends, could create opportunities for Latin American issuers and borrowers.
Ultimately, the ability of Latin American economies to adapt to evolving U.S. policies will be crucial in maintaining economic stability and fostering long-term development in the region. International investors and Latin American issuers and borrowers should remain vigilant, balancing the benefits of increased capital access and investment opportunities with the potential risks posed by geopolitical shifts and regulatory changes. By leveraging strategic partnerships and maintaining robust compliance frameworks, Latin American companies and financial institutions can position themselves to capitalize on emerging trends and mitigate the anticipated challenges.
Context for the Five Pillars of EPA’s ‘Powering the Great American Comeback Initiative’
On February 4, new US Environmental Protection Agency (EPA) Administrator Lee Zeldin announced EPA’s “Powering the Great American Comeback Initiative,” which is intended to achieve EPA’s mission “while emerging the greatness of the American Economy.” The initiative has five “pillars” intended to “guide the EPA’s work over the first 100 days and beyond.” These are:
Pillar 1: Clean Air, Land, and Water for Every American.
Pillar 2: Restore American Energy Dominance.
Pillar 3: Permitting Reform, Cooperative Federalism, and Cross-Agency Partnership.
Pillar 4: Make the United States the Artificial Intelligence Capital of the World.
Pillar 5: Protecting and Bringing Back American Auto Jobs.
Below, we break down each of the five pillars and present context what these pillars may mean to the regulated community.
Pillar 1: “Clean Air, Land, and Water for Every American”
The first pillar is intended to emphasize the Trump Administration’s continued commitment to EPA’s traditional mission of protecting human health and the environment, including emergency response efforts. To emphasize this focus, accompanied by Vice President JD Vance, Zeldin’s first trip as EPA Administrator was to East Palatine, Ohio, on the two-year anniversary of a train derailment. While there, Administrator Zeldin noted that the “administration will fight hard to make sure every American has access to clean air, land, and water. It was an honor to meet with local residents, and I leave this trip more motivated to this cause than ever before. I will make sure EPA continues to clean up East Palestine as quickly as possible.” After surveying the site of the train derailment to survey the cleanup, Zeldin and Vance “participated in a meeting with local residents and community leaders to learn more” about how to expedite the cleanup.
Taken alone or in conjunction with Administrator Zeldin’s trip to an environmentally impacted site in Ohio, Pillar 1 appears consistent with past EPA practice.
Read in the context of the Trump Administration’s first-day executive orders (for more, see here) and related actions such as a memoranda from Attorney General Pam Bondi on “Eliminating Internal Discriminatory Practices” and “Rescinding ‘Environmental Justice’ Memoranda.” Pillar 1 should be construed as meaning that EPA no longer intends to proactively work to redress issues in “environmentally overburdened” communities. Consequently, programs under the Biden Administration that focus on environmental justice (EJ) and related equity issues are ended. (For more, see here.)
Pillar 2: Restoring American Energy Dominance
Pillar 2 focuses on “Restoring American Energy Dominance.” What this means in practice is little surprise given President Trump’s promises during his inauguration to “drill, baby, drill.” Two first-day Executive Orders provide further context to this pillar:
The Executive Order “Declaring a National Energy Emergency” declares a national energy emergency due to inadequate energy infrastructure and supply, exacerbated by previous policies. It emphasizes the need for a reliable, diversified, and affordable energy supply to support national security and economic prosperity. The order calls for immediate action to expand and secure the nation’s energy infrastructure to protect national and economic security.
The Executive Order on “Unleashing American Energy,” seeks to encourage the domestic production of energy and rare earth minerals while reversing various Biden Administration actions that limited the export of liquid natural gas (LNG), promoted electric vehicles and energy efficient appliances and fixtures, and required accounting for the social cost of carbon. (For context on the social context of carbon, see here and here.)
Pillar 3: Permitting Reform, Cooperative Federalism, and Cross-Agency Partnership
Pillar 3 focuses on government efficiency including permitting reform, cooperative federalism, and cross-agency partnerships. As with Pillar 1, two of these goals (cooperative federalism and cross-agency partnership) are generally consistent with typical agency practice across all administrations even if administrations approach them in different ways.
“Permitting reform” generally means streamlining the permitting processes so that the time from permitting submission to conclusion is shorter.
Current events, most notably three court decisions involving the National Environmental Policy Act (NEPA), require a deeper exploration of “permitting reform.” NEPA is a procedural environmental statute that requires federal agencies to evaluate the potential environmental impacts of major decisions before acting and provides the public with information about the environmental impacts of potential agency actions. The Council on Environmental Quality (CEQ), an agency within the Executive Office of the president, was created in 1969 to advise the president and develop policies on environmental issues, including ensuring that agencies comply with NEPA by conducting sufficiently rigorous environmental reviews.
Energy-related infrastructure ranging from transmission lines to ports needed to ship LNG often require NEPA reviews. During his first term, President Trump sought to streamline NEPA reviews. As we previously discussed, in 2020, CEQ regulations were overhauled to exclude requirements to discuss cumulative effects of permitting and, among other things, to set time and page limits on NEPA environmental impact statements. During the Biden Administration, in one phase of revisions, CEQ reversed course to undo the Trump Administration’s changes, and, in a second phase, the Biden Administration required evaluation of EJ concerns, climate-related issues, and increased community engagement. (For more, see here.) Predictably, litigation followed these changes. Additionally, we are waiting on the US Supreme Court’s decision in Seven County Infrastructure Coalition v. Eagle County, Colorado, which addresses whether NEPA requires federal agencies to identify and disclose environmental effects of activities which are outside their regulatory purview.
These two recent decisions add to the ongoing debate about whether CEQ ever had the authority to issue regulations that have been relied upon for decades. These include the DC Circuit’s decision in Marin Audubon Society v. FAA (for more, see here) and a second decision by a North Dakota trial court in in Iowa v. Council on Environmental Quality.
Pillar 4: Make the United States the Artificial Intelligence Capital of the World
EPA’s Pillar 4 seeks to promote artificial intelligence (AI) so that America is the AI “Capital of the World.”
AI issues fall into EPA’s purview because development of AI technologies is highly dependent on electric generation, transmission, and distribution. EPA plays a key role in overseeing permitting and compliance activities related to facilities like these. As we have discussed, AI requires significant energy to power the data centers it needs to function, and a study indicates that the carbon footprint of training a single AI natural language processing model produced similar emissions to 125 round-trip flights between New York and Beijing. Because data center developments tend to be clustered in specific regions, more than 10% of the electricity consumption in at least five states is used by data centers. (Report available here.)
Pillar 5: Protecting and Bringing Back American Auto Jobs
Pillar 5 focuses on supporting the American automobile industry. As was discussed in relation to Pillar 2, EPA seeks to support the American automobile industry. Regarding this sector, EPA intends to “streamline and develop smart regulations that will allow for American workers to lead the great comeback of the auto industry.” Additionally, the US Office of Management and Budget released a memo on January 21, clarifying that provisions of the “Unleashing American Energy” Executive Order were intended to pause disbursement of Inflation Reduction Act funds, including those for electric vehicle charging stations.
While the particulars of this pillar are less clear than some others, we expect that EPA’s efforts in this area will involve some combination of permitting reform and rollback to prior EPA decisions related to vehicle emissions.
United States: Unsustainable—Acting SEC Chairman Signals Reconsideration of Climate Risk Disclosure Rules
In March 2024, the SEC adopted The Enhancement and Standardization of Climate-Related Disclosures for Investors final rule, which required companies to make disclosures regarding climate risks and disclosures of Scope 1 and 2 emissions information (the Climate Risk Reporting Rule). The Climate Risk Reporting Rule was promptly challenged by several lawsuits that were ultimately consolidated in the Eighth Circuit Court of Appeals.
With the change in presidential administration, it has been widely expected that the Climate Risk Reporting Rule would be rescinded and that the SEC, under new leadership, could alter its litigation strategy. On 11 February 2025, Acting SEC Chairman Uyeda did just that. He issued a statement noting that, due to “changed circumstances,” he had directed the SEC staff to request that the Eighth Circuit delay the litigation to provide time for the SEC to “deliberate and determine the appropriate next steps in these cases.” In his statement, he noted that both he and Commissioner Peirce (who now represent a majority of the SEC Commissioners) had voted against the Climate Risk Reporting Rule, and he explained his concerns regarding whether the SEC had the statutory authority to adopt the rule, the necessity of the rule, and whether the SEC had followed the appropriate procedures required under the Administrative Procedure Act.
In response to the statement put out by Acting Chairman Uyeda, Commissioner Crenshaw released a statement that the SEC did not act outside of its remit by passing the Climate Risk Reporting Rule and that Acting Chairman Uyeda acted without the full Commission’s input in making this decision.
While Acting Chairman Uyeda’s statement does not necessarily have a practical impact on the rule itself, it is an affirmative signal that this Commission is not supportive of the Climate Risk Reporting Rule and will likely take future action to rescind it. This statement, coupled with earlier statements from Paul Atkins, the President’s nominee for SEC Chairman, that were critical of the Climate Risk Reporting Rule, likely serve as confirmation of the expectations that the Climate Risk Reporting Rule will not go into effect.
SEC Asks Court to Put Climate Change Litigation on Hold
As previously reported in our last post, The Fate of the New U.S. Climate Change Rules Under the New Republican Administration, legal challenges to the SEC’s rules mandating extensive new climate change disclosure is ongoing in the 8th Circuit U.S. Court of Appeals, and has been fully briefed and awaiting oral arguments.
Today, the Acting Chairman of the SEC reiterated his prior position that the agency lacked authority to promulgate the rules, and announced that he would ask the court to pause the litigation so that the SEC can consider its next steps. The Acting Chairman likely wishes to await Senate confirmation of the permanent Chairman before taking action. It remains unclear what the SEC will ultimately do, although today’s announcement suggests that the SEC would likely withdraw the new rules in due course. If the SEC decides to materially amend the rules, in light of international pressure, it would withdraw the current rules and re-commence the process for issuing new rules.
Doubt as to the future of the SEC’s climate disclosure rules is likely to accelerate efforts in some states to follow California’s lead and adopt their own rules. For further information on California climate change rules, please see here: Climate Reporting in 2025: Looking Ahead
California’s Fashion Environmental Accountability Act: Proposed Regulations for Sustainability in the Fashion Industry
Fashion Industry
On February 4, 2024, California legislators introduced a bill, the Fashion Environmental Accountability Act (AB 405), which would require fashion brands to disclose their environmental impact, carbon emissions, water use, and waste. The proposed regulation would apply to brands with total annual revenue over $1 billion and that do business in California. The law would not apply to retailers that sell used fashion goods and does not include multibrand retailers, unless the total annual gross receipts of all of the private labels under the retailer exceeds $100 million.
Starting in 2026, fashion brands would be required to publicly disclose, and annually thereafter, their scope 1 and scope 2 greenhouse gas emissions, and their scope 3 greenhouse gas emissions in 2027.
Additionally, the proposed bill would require fashion brands to carry out effective environmental due diligence that complies with certain environmental guidelines. These guidelines, at a minimum, require fashion brands to embed responsible business conduct into their policies and management systems, identify areas of significant risk for societal and ecological harm, and assess and mitigate the adverse impacts of those risks. Beginning July 1, 2027, the bill would also require brands to submit an Environmental Due Diligence Report to the department and state board, outlining their environmental diligence efforts and certain information related to their greenhouse gas emissions. By January 1, 2028, fashion sellers will also be required to ensure significant tier 2 dyeing, finishing, printing, and garment washing suppliers annually report wastewater chemical concentrations and water usage in the due diligence report.
AB 405 now awaits referral to its first policy committee. This proposed legislation appears to be part of a broader effort to address the environmental impacts of the fashion industry, as California has already passed and signed into law the Responsible Textile Recovery Act (SB 707) on September 22, 2024.
Calling All Apprentices: National Guidelines for Apprenticeship Standards Approved by DOL for Renewable Energy Projects
Nearly two and a half years after the Inflation Reduction Act of 2022 (IRA) became law, developers and contractors continue to adjust to the new normal for renewable energy projects: compliance with prevailing wage and apprenticeship requirements. As most renewable industry participants are aware, under the IRA, compliance with these requirements is necessary to realize the full value of federal investment tax credits, production tax credits, and commercial buildings’ energy efficiency tax deductions.
On January 13, 2025, the U.S. Department of Labor certified National Guidelines for Apprenticeship Standards, developed jointly by the Interstate Renewable Energy Council (IREC) and the Solar Energy Industries Association (SEIA). The first set of guidelines are for the occupation of construction craft laborer, but guidelines for other occupations commonly utilized by solar companies are under development.
The new guidelines establish a framework for developing registered apprenticeship programs that will have common standards to ensure that apprentices across the country receive a baseline of similar education and training, while also providing space for any specific training required by a geographic area. They are presented as “a blueprint for developing an apprenticeship program” and focus on the following eight components:
The Apprenticeship Approach – utilizes a time-based approach (as opposed to competency-based or hybrid) focusing on the apprentice’s skill acquisition through completion of on-the-job learning and related instruction tasks and corresponding hour requirements.
Term of Apprenticeship – establishes the duration — number of hours of on-the-job learning (2000 hours annually; 4000 hours total) and related instruction (144 hours annually; 300 hours total) — that must be completed by an apprentice to complete the program.
Ratio of Apprentices to Journey workers – uses a 1:1 apprentice-to-journey worker ratio (this may vary by project location and state law).
Apprentice Wage Schedule – provides a general template for wage increases at defined intervals as apprentices progress through the program and gain knowledge/skills (to be filled in by a registered apprenticeship program sponsor).
Probationary Period – notes that programs should require a probationary period that should not exceed the lesser of one year or 25% of the apprenticeship term (term to be filled in by a registered apprenticeship program sponsor).
Selection Procedures – notes that program sponsors have flexibility to determine selection procedures so long as they are consistent with general nondiscrimination obligations and federal Uniform Guidelines on Employee Selection Procedures (i.e., no discrimination based on race, color, religion, national origin, sex, sexual orientation, genetic information, disability or age, and compliance with equal opportunity requirements of Title 29 of the CFR, part 30).
Work Process Schedule for On-the-Job Learning – outlines a work process schedule for on-the-job learning tasks to be completed by apprentices to demonstrate proficiency that must be satisfied before a completion certificate can be awarded. For construction craft laborers, supervised work experience is devoted to safety and work habits (400 hours), use and care of tools/equipment (600 hours), construction activities (2,000 hours), preparation and quality assurance (600 hours), and code/drawing review and utilization (400 hours).
Related Instruction – describes coursework on theoretical and technical subjects to be completed by apprentices (minimum of 175 hours of core skill training and 125 hours of elective coursework). Solar-specific instruction in the elective section includes 20 hours for introduction to solar construction, 10 hours for solar site assessment study, 40 hours on solar design and installation, eight hours on utility vegetation management, four hours on erosion control, 20 hours on renewable energy systems, and eight hours on battery basics. It provides for other educational methods, including classroom/online/self-study courses for apprentices (each program must include at least 144 hours of related instruction annually).
Overall, the National Guidelines for Apprenticeship Standards provide additional, practical guidance and support for contractors committed to creating high-quality apprenticeship programs compliant with IRA requirements.
PFAS and Consumer Class Actions: The New Wave of PFAS Litigation
With a new year has come a new wave of litigation involving PFAS (per- and poly-fluoroalkyl substances), also known as “forever chemicals.” While PFAS litigation up to this point has often involved either claims of personal injury or those concerning damage to natural resources and municipal water systems, an increasing trend of class actions is emerging implicating consumer protection laws. Recently, several large companies in the United States dealing in consumer goods have found themselves the targets of class action suits brought by plaintiffs asserting claims of consumer fraud involving PFAS.[1] The allegations asserted in these suits have a common thread in that the plaintiffs are arguing that the presence of PFAS in certain of the companies’ products was never disclosed to the consumer. The plaintiffs are, therefore, seeking to prohibit these companies from allegedly making misleading advertisements or selling these products without proper disclosures in the future.
“Forever Chemicals” Everywhere
These cases result from an increased awareness of PFAS, their wide range of uses and presence in daily life, and their alleged association with negative health and environmental effects. However, it is the widespread use of PFAS that could lead to a significant increase in consumer protection claims, as PFAS can be found in everything from clothing to furniture, pizza boxes and food wrappers, our cellphones, pots and pans, mattress pads, household dust, and even in every drop of rain.
A New Trend
Over the past couple of years, these types of lawsuits have been growing and diversifying in terms of the targeted industries. Since 2022, class action consumer lawsuits involving PFAS have been brought in courts across the country (i.e., New York, New Jersey, Illinois, California, etc.) against numerous entities in the cosmetics industry; the food, beverage and packaging industries; apparel companies; and those dealing with both regular and feminine hygiene products.[2]
Furthermore, a recent increase in legislation aimed at eliminating or at least limiting PFAS from consumer products is likely to fuel continued litigation. Over the past few years, more than 20 states, including Maine, Minnesota, and California, have enacted or are in the process of enacting consumer protection legislation addressing PFAS. At the federal level, the Toxic Substances Control Act (“TSCA”) now imposes record-keeping and reporting requirements on companies that manufacture, import, and sell products containing PFAS in the United States.
Although there has been an increase in these types of cases, many of the class actions related to PFAS consumer fraud claims have been dismissed by different courts, often either on the basis of a failure to state a claim when the specific PFAS compound at issue was not identified, or because the complaint did not establish the plaintiff’s reasonable reliance on the alleged deceptive representations.
Despite these dismissals, however, plaintiffs are not being deterred. With each dismissal, the plaintiffs’ bar is adapting and becoming more sophisticated and, thus, new lawsuits with more facts and more specific representations concerning PFAS are more likely to survive early dismissals as has been seen recently with several California cases where the courts denied motions to dismiss on the basis that consumers rely on a manufacturer’s health and wellness statements when making purchasing decisions.[3] Therefore, while early losses for plaintiffs may have originally stemmed the tide of mass PFAS consumer class actions, numerous cases are now working their way through the courts and are far more prepared for defensive challenges.
Conclusion
Considering that many states are in the process of enacting legislation responsive to PFAS, and that there is still no federal law banning the manufacture or sale of consumer products containing PFAS, the increase in related consumer class actions is all but guaranteed to continue. Therefore, those in the consumer goods industries, including their insurers and investment companies, will need to keep a close eye on this emerging trend and potentially put litigation risk mitigation plans in place in the event the trend continues to grow. These mitigation plans could include providing notice of PFAS in product labeling and any marketing strategies to ensure appropriate disclosure, finding suitable substitutes for PFAS where possible, and retaining firms like Blank Rome with significant experience in PFAS matters and defending class action suits. There is still much to be determined, but we will continue monitoring this emerging litigation trend closely.
[1] See Brown v. Cover Girl; Davenport v. L’Oreal; Azman Hussain v. Burger King; Bedson v. Biosteel; Esquibel v. Colgate-Palmolive Co.; Gemma Rivera v. Knix Wear Inc.; Anthony Ray Gonzalez v. Samsung Electronics America, Inc.; Dominique Cavalier and Kiley v. Apple Inc.
[2] See natlawreview.com/article/apples-pfas-consumer-fraud-lawsuit-latest-growing-trend
[3] See id.
EPA Postpones Addition of Nine PFAS to Toxics Release Inventory for Reporting Year 2025
On February 5, 2025, the U.S. Environmental Protection Agency (EPA) delayed until March 21, 2025, the effective date of a January 2025 rule adding nine per- and polyfluoroalkyl substances (PFAS) to the list of chemicals subject to toxic chemical release reporting under the Emergency Planning and Community Right-to-Know Act (EPCRA) and the Pollution Prevention Act (PPA). 90 Fed. Reg. 9010. As reported in our January 13, 2025, blog item, the January rule updates the regulations to identify nine PFAS that must be reported pursuant to the National Defense Authorization Act for Fiscal Year 2020 (FY2020 NDAA). The PFAS added to the Toxics Release Inventory (TRI) are:
Ammonium perfluorodecanoate (PFDA NH4) (Chemical Abstracts Service Registry Number® (CAS RN®) 3108-42-7);
Sodium perfluorodecanoate (PFDA-Na) (CAS RN 3830-45-3);
Perfluoro-3-methoxypropanoic acid (CAS RN 377-73-1);
6:2 Fluorotelomer sulfonate acid (CAS RN 27619-97-2);
6:2 Fluorotelomer sulfonate anion (CAS RN 425670-75-3);
6:2 Fluorotelomer sulfonate potassium salt (CAS RN 59587-38-1);
6:2 Fluorotelomer sulfonate ammonium salt (CAS RN 59587-39-2);
6:2 Fluorotelomer sulfonate sodium salt (CAS RN 27619-94-9); and
Acetic acid, [(γ-ω-perfluoro-C8-10-alkyl)thio] derivs., Bu esters (CAS RN 3030471-22-5).
In the February 5, 2025, notice, EPA states that it is delaying the effective date of the rule in response to President Trump’s January 20, 2025, memorandum entitled “Regulatory Freeze Pending Review.” The memorandum directed the heads of executive departments and agencies to consider postponing for 60 days from the date of the memorandum the effective date for any rules published in the Federal Register that had not yet taken effect for the purpose of reviewing any questions of fact, law, and policy that the rules may raise.
EPA Administrator Zeldin Announces Five Pillar Initiative to Guide EPA; What Does It Mean for OCSPP?
U.S. Environmental Protection Agency (EPA) Administrator Lee Zeldin on February 4, 2025, announced the “Powering the Great American Comeback Initiative” (PGAC Initiative). It consists of five pillars and is intended to serve as a roadmap to guide EPA’s actions under Administrator Zeldin.
The five pillars are:
Clean Air, Land, and Water for Every American;
Restore American Energy Dominance;
Permitting Reform, Cooperative Federalism, and Cross-Agency Partnership;
Make the United States the Artificial Intelligence Capital of the World; and
Protecting and Bringing Back American Auto Jobs.
Administrator Zeldin explained Pillar 3 by stating, “Any business that wants to invest in America should be able to do so without having to face years-long, uncertain, and costly permitting processes that deter them from doing business in our country in the first place.” [Emphasis added.] We agree and would urge Administrator Zeldin to consider the years-long new chemical approval process under the Toxic Substances Control Act (TSCA).
There has been much discussion about the Trump Administration’s desire to reduce the size of the government by reducing the federal workforce and restore common sense to the decision-making process. What is getting lost in the discussion and actions taken to “right-size” the government is that chemical manufacturers and formulators rely on EPA action to bring new products to market. The public seldom hears about how agencies like EPA play a vital role in promoting innovation and supporting job creation. Instead, political rhetoric has been about reducing agency headcounts and budgets, but not enough about how to improve agency performance and efficiency.
This is not new. Dr. Richard Engler and I wrote in November 2024 about the newly unveiled Department of Government Efficiency (DOGE), “If DOGE can identify ways to improve the operation and efficiency of [EPA’s Office of Chemical Safety and Pollution Prevention (OCSPP)] (e.g., by ensuring appropriate resources and updated technology), this could lead to economic gains, greater investment, innovation, and sustainability, and yes, more jobs in the United States.” I would expand what we wrote in November to include the PGAC Initiative.
American businesses need OCSPP, a critically important EPA office charged with conducting safety reviews of existing products and the gatekeeper for new chemical products, to be properly resourced (with funds, people, and technology), operate efficiently and effectively, and be held accountable for performance. If the PGAC Initiative and DOGE efforts lead to OCSPP’s proper resourcing, it would go a long way in reversing the trend of fewer new chemicals being submitted to EPA for approval in the United States and reducing the commercialization of innovative new chemistries overseas instead of here in the United States.
McDermott+ Check-Up: February 7, 2025
THIS WEEK’S DOSE
Key Nominations Move Forward. Having advanced from the Senate Finance Committee this week, Robert F. Kennedy Jr.’s nomination for secretary of Health & Human Services will now go to the Senate floor.
Pathway on Reconciliation Is Uncertain. While the House Budget Committee was expected to start the reconciliation process this week with a markup of a budget resolution, that did not happen.
House Energy & Commerce Health Subcommittee Holds Hearing on Drug Threats. Members examined solutions to the opioid crisis.
Trump Issues EO Modifying the Regulatory Process. The executive order (EO) calls for fewer regulations and rescinds changes to the regulatory cost-benefit analysis.
Administration Modifies Public Health Data. The Centers for Disease Control & Prevention scrubbed its websites of mentions of gender identity and diversity, equity, and inclusion.
Legal Challenges Continue in Response to Trump Administration Actions. Federal judges have taken additional actions to block efforts to freeze certain federal funding, and a lawsuit was filed in response to a Trump EO on care for transgender youth.
CONGRESS
Key Nominations Move Forward. The Senate Finance Committee advanced Robert F. Kennedy (RFK) Jr.’s nomination to lead the US Department of Health & Human Services (HHS) in a 14 – 13 vote along party lines. The nomination now moves to the Senate floor. If every Democrat opposes the nomination in the floor vote, RFK Jr. could lose up to three Republican votes and still be confirmed as HHS secretary.
The Senate confirmed Russell Vought as director of the Office of Management & Budget (OMB) by a 53 – 47 vote. The Senate voted to confirm Doug Collins to lead the US Department of Veterans Affairs in a vote of 77 – 23. Dr. Mehmet Oz, President Trump’s nominee to lead the Centers for Medicare & Medicaid Services (CMS), began meeting with senators on Capitol Hill this week, the first step in his nomination process. He has not spoken publicly on Medicaid much before, but he was quoted this week as saying, “We have to take care of the most vulnerable among us. It’s a social calling for all of us . . . that funding freeze was not designed to affect Medicaid at all.”
Pathway on Reconciliation Is Uncertain. While the House was expected to start the reconciliation process with a markup of a budget resolution in the Budget Committee this week, that did not happen. House Republicans continue to negotiate with one another about the level of spending cuts and held a meeting at the White House with President Trump, after which they announced they were moving closer to an agreement. Because this will be a partisan process, Republicans need to be largely unified in order to proceed. During this uncertainty, Senate Budget Committee Chairman Lindsey Graham (R-SC) made it clear that the Senate is prepared to move forward with its own budget resolution, which would begin a two-bill approach to reconciliation, with an immigration, energy, and defense bill completed first and a tax bill tackled later in the year. Senate Republicans are set to meet with President Trump Friday night at Mar-a-Lago to promote this approach. The budget resolution is a necessary first step in the reconciliation process, and healthcare programs are expected to be on the table for spending cuts. For an overview on the budget reconciliation process and its impact on health policies, read our +Insight.
House Energy & Commerce Health Subcommittee Holds Hearing on Drug Threats. The hearing discussed the importance of expanding access to addiction and mental health services and ensuring wide availability of Narcan. Republican members primarily focused on the importance of border security in combatting the opioid crisis, and Democratic members emphasized the funding freeze’s adverse impacts on medical research and the critical roles that Medicaid and federally qualified health centers play in enabling access to care for substance use disorders.
ADMINISTRATION
Trump Issues EO Modifying the Regulatory Process. This EO requires that whenever an agency promulgates a new rule, regulation, or guidance, it must identify at least 10 existing rules, regulations, or guidance documents to be repealed. The EO tasks the director of OMB with ensuring standardized measurement and estimation of regulatory costs, and it requires that, for fiscal year 2025, the total incremental cost of all new regulations, including repealed regulations, be significantly less than zero. It is unclear what this 10 – 1 ratio means in practice or how it will be implemented.
Administration Modifies Public Health Data. To comply with President Trump’s EOs related to gender identity and diversity, equity, and inclusion, the Centers for Disease Control & Prevention first removed, then uploaded a modified version of, public information and data related to HIV and health information for teens and LGBTQ+ people on both its data directory and main webpage. In response, a medical advocacy group has sued multiple health agencies, stating that the removal of data deprives physicians and researchers of access to necessary information.
COURTS
Legal Challenges Continue in Response to Trump Administration Actions. Following legal challenges last week to the Trump administration’s now-rescinded OMB memo directing agencies to freeze certain federal funding, more federal judges have acted to halt the federal freeze. On January 31, a federal judge in Rhode Island granted a temporary restraining order to block the freeze, following a lawsuit from Democratic attorneys general from 22 states and the District of Columbia. On February 3, a federal judge in the District of Columbia issued a similar injunction in a lawsuit filed by several coalitions of nonprofits.
PFLAG National, GLMA, and transgender individuals and their families filed a federal lawsuit against the Trump administration’s EO “Protecting Children from Chemical and Surgical Mutilation.” The EO states that federal agencies shall not “fund, sponsor, promote, assist, or support the so-called ‘transition’ of a child from one sex to another.” Plaintiffs in the lawsuit, filed in the US District Court for the District of Maryland, argue that the EO will create harm by denying access to physician-prescribed, medically recommended care. Read the press release here.
In response to a lawsuit brought by unions representing federal workers, a federal judge in Massachusetts paused the deadline for the administration’s buyout program for federal workers. There is another hearing set for next week.
QUICK HITS
HHS OCR Announces Action on Anti-Semitism. The HHS Office for Civil Rights (OCR) will initiate compliance reviews related to reported incidents of anti-Semitism at four medical schools.
House Democratic Leaders Send Letter to GAO on Medicare Drug Price Negotiation. In the letter, Energy & Commerce Ranking Member Frank Pallone (D-NJ), Ways & Means Ranking Member Richard Neal (D-MA), and Education & Workforce Ranking Member Bobby Scott (D-VA) urged the US Government Accountability Office (GAO) to monitor the Medicare Drug Price Negotiation Program to ensure the Trump administration complies with the Inflation Reduction Act, which directed and authorized the GAO to conduct oversight of the program.
CMS Releases Statement on DOGE Collaboration. The short statement notes that two senior CMS officials are working with Elon Musk’s Department of Government Efficiency (DOGE).
NEXT WEEK’S DIAGNOSIS
Both chambers will be in session next week. The House Veterans’ Affairs Health Subcommittee will hold another hearing on community care, the House Ways & Means Health Subcommittee will hold a hearing on modernizing healthcare, and the Senate Special Committee on Aging will hold a hearing on optimizing longevity. As noted, the House Budget Committee may mark up a budget resolution that would start the budget reconciliation process, or the Senate could move first. The full Senate is on track to approve RFK Jr.’s nomination, and we expect the administration to continue taking executive action related to healthcare.
EPA Releases Third Triennial Report to Congress on Biofuels and the Environment
The U.S. Environmental Protection Agency (EPA) announced on January 21, 2025, the availability of a final document entitled “Biofuels and the Environment: Third Triennial Report to Congress” (Third Report). 90 Fed. Reg. 7135. The document was prepared by EPA’s Offices of Research and Development (ORD) and Air and Radiation (OAR), in consultation with the U.S. Departments of Agriculture (USDA) and Energy (DOE). The report builds on the first and second triennial reports, released in 2011 and 2018, respectively. According to EPA, it reinforces the broad conclusions from those reports on biofuels in general and further evaluates the attribution of those effects to the Renewable Fuel Standard (RFS) Program more specifically. The Third Report updates the previous assessments of the environmental impacts of the RFS Program and includes new analyses to separate better the effects of the RFS Program from the broader set of factors influencing biofuels. According to EPA, in the first two reports, it could not separate the effects of the RFS Program from the impact of other factors (e.g., market or other policy effects). The Third Report includes an “attribution analysis” that better separates the effects of the RFS Program from other factors that affect biofuels production and consumption in the United States. The Third Report concludes that the RFS Program had a modest positive effect on biofuel production and consumption and thus had a modest negative effect on the environment. EPA states that these endpoints include air and water quality, water quantity, ecosystem health and biodiversity, soil quality, invasive species, and international impacts. The impacts of the RFS Program overlap with the more significant effects of biofuels as an industry.
The New Administration and Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) Developments — A Conversation with Jim Aidala [Podcast]
This week, I sat down with Jim Aidala, Senior Government Affairs Consultant at B&C and its consulting affiliate, The Acta Group (Acta®), to discuss the early days of the new Administration, what changes we can expect at the U.S. Environmental Protection Agency (EPA) generally, and key issues the Office of Pesticide Programs (OPP) can be expected to tackle. Jim’s unique perspective as a former Assistant Administrator of what is now called the Office of Chemical Safety and Pollution Prevention (OCSPP) and keen understanding of the pesticide world always make for a wonderful and insightful conversation.