D.C. Insider March 2025: Tariffs, Federal Gov’t Shutdown and More

In the March 2025 edition of The ICR D.C. Insider, we share our insights and analysis about developments in Washington that could have an immediate and long-term impact on your business.

Tariffs

• Mexico & Canada – President Trump imposed 25% tariffs on goods from Mexico and Canada – and Canada responded with plans to impose 25% tariffs on nearly $100 billion of U.S. imports. Mexico’s president said the country would retaliate with a range of moves to be announced later in March.
• Reciprocal Tariffs – President Trump signed a plan to impose reciprocal tariffs on all trading partners, but delayed their implementation as the Administration launches negotiations with individual countries. The Office of the U.S. Trade Representative (USTR) announced that it would accept public comment on this issue until March 11^th. A report is due by April 1^st with the tariffs expected to go into effect on April 2^nd.
• Steel & Aluminum The President also raised tariffs on steel and aluminum imports to a flat 25% “without exceptions or exemptions.”
• European Union – The President announced that the Administration will soon announce the details of its planned 25% tariffs on goods from European Union (EU) member nations.
• To Counteract Foreign Taxes on U.S. Technology Companies – President Trump signed a presidential memo directing the Administration to evaluate placing tariffs on trading partners that levy taxes and regulations against American tech companies, taking aim at a major trade irritant for the largest U.S. technology companies. The memo directs the USTR’s office to renew tariff investigations started during Trump’s first term on countries – including certain EU member nations, as well as Canada, India, and others – that impose digital services taxes.
• China
• • Another 10% Tariff – President Trump upped the pressure and the tariffs on Chinese imports with the announcement that he has doubled the amount to 20%. In turn, China swiftly announced retaliatory tariffs on U.S. agricultural goods, and other measures against American companies. These steps include imposing extra tariffs of 15% on U.S. chicken, wheat, corn and cotton; and 10% on sorghum, soybeans, pork, beef, seafood, fruits, vegetables and dairy. These charges kick in on March 10^th.
  • Chips & Technology – The Trump Administration is also drafting a plan to expand Biden-era restrictions against China’s chip industry and is hoping other countries will do the same. The draft states, “Trump officials recently met with their Japanese and Dutch counterparts about restricting Tokyo Electron Ltd. and ASML Holding NV engineers from maintaining semiconductor gear in China.” Still, “it could take months before the talks” are productive as the Administration continues to staff up, and “it also remains to be seen whether allies will be more receptive to the new leadership in Washington.”
  • De Minimis Exception – Via an Executive Order (EO), President Trump paused the closing of the de minimis trade exemption, a provision that allows packages valued at under $800 to avoid inspection and enter the country duty free. The exemption will again be eliminated after the Secretary of Commerce establishes a system to “fully and expediently process and collect tariff revenue.”
  • Shipping – A proposal, unveiled by the United States Trade Representative (USTR), would impose millions of dollars in new fees each time a Chinese shipping company or any Chinese-built vessel enters a U.S. port. Chinese shipyards accounted for more than half of the cargo ships, tankers, and other ocean vessels that were built in 2023. The proposal is open to public comments until a March 24^th hearing, when the Trump Administration will decide whether the new fees will be imposed. The plan is in response to a S. probe that began under President Biden in March 2024.

Federal Government Shutdown

• Budget – With the current Federal government budget scheduled to expire on March 14^th, Congress continues with its efforts to secure future funding. The talks have been complicated by President Trump’s view that he can ignore spending laws passed by Congress, suspend foreign aid, and unilaterally fire tens of thousands of federal workers. The standoff has appropriators warming to a long-term Continuing Resolution, or CR, which would extend federal funding at current levels through the fiscal year rather than passing individual funding bills for each major department.

Regulatory Agencies

• White House Seeks to Control Independent Agencies – President Trump signed an EO that seeks to give his Administration far-reaching control over government agencies that Congress established to operate with some independence of the White House – and one that is likely to attract significant legal challenges. The EO is expected to affect a range of independent agencies, including the Securities and Exchange Commission (SEC), Federal Trade Commission (FTC), National Labor Relations Board (NLRB), the Federal Reserve’s regulatory and supervisory functions, and other agencies. It requires independent agencies to submit major regulations to the White House Office of Management and Budget (OMB) for review, asserts a power to block these agencies from spending funds on projects or efforts that conflict with presidential priorities, appoint politically-designated White House liaisons, “regularly consult with and coordinate policies and priorities” with the White House Domestic Policy Council and National Economic Council, and bar them from taking legal positions different from those asserted by the president or Attorney General Pam Bondi.
• New Leadership Named – New leaders for a series of key financial regulatory agencies have now been named:
  • CFTC – Former Commodity Futures Trading Commission (CFTC) Commissioner and cryptocurrency policy lead at venture-capital firm a16z, Brian Quintenz, has been nominated to run the derivatives market regulator. He served as a CFTC commissioner between 2017 and 2021, and led the agency’s technology advisory committee that hosted public policy discussions and briefings.
  • CFPB – OMB Director, Russ Vought, is currently serving as the Acting Director of the Consumer Financial Protection Bureau (CFPB), which the Administration says it plans to downsize, but not completely close. Jonathan McKernan, a former Federal Deposit Insurance Corporation (FDIC) board member, is President Trump’s pick to permanently lead the CFPB.
  • FDIC – Travis Hill is the Acting Chairman of the Federal Deposit Insurance Corporation (FDIC). He was previously the Vice Chairman.
  • OCC – Jonathan Gould has been nominated to be Comptroller of the Currency (OCC), which oversees the nation’s largest banks. Currently in private legal practice, during his previous tenure at the OCC Gould took a leadership position in many fintech and crypto initiatives. Rodney Hood, a former Chair of the National Credit Union Administration (NCUA), is the current Acting Comptroller of the Currency.
  • USTR – Jamieson Greer was confirmed by the Senate as the new U.S. Trade Representative (USTR). He previously served as chief of staff to Trump’s first-term trade chief.

SEC

• New Guidance For Asset Managers On Investor Activism – The Securities and Exchange Commission’s (SEC) new guidance on investor activism and engagement with portfolio companies has thrown asset managers into confusion, with some of the industry’s largest firms, including BlackRock and Vanguard, putting a temporary pause on shareholder engagement meetings. The SEC issued staff guidance regarding beneficial ownership reporting requirements around Schedule 13D and 13G filings – required when an investor beneficially owns more than 5% of a class of registered voting equity. The new guidance requires investment firms that “pressure” companies over Environmental, Social and Governance, ESG, matters to file the more extensive Schedule 13D.
• Rules Now Make it Easier for Companies to Dismiss Shareholder Proposals on Hot-Button Political Issues – The Commission issued new guidance that will make it harder for activists to demand shareholder votes on proposals that touch on charged social issues. The move, a reversal of Biden-era policy, comes as activist groups turn to the corporate sphere to fight culture-war battles on topics such as climate, guns, and abortion. Under the new guidance, corporations will now be able to block more proposals on some socially and ethically charged issues from being included in proxy statements, effectively stopping them from being put to a general shareholder vote. Businesses will also have more avenues by which to argue that shareholders are trying to “micromanage” their operations, another way they can block votes from going forward.
• The Likely End of the Climate Disclosure Rule – Acting Chair Mark Uyeda directed SEC staff to request that the Eighth Circuit Court of Appeals not schedule an oral argument in the pending litigation surrounding the “The Enhancement and Standardization of Climate-Related Disclosures for Investors,” otherwise known as the Climate Change Rule. During this pause the SEC’s commissioners will deliberate on its next steps.

CFTC

• New Program Outlines Benefit of Self-Reporting Misconduct – The Commodity Futures Trading Commission (CFTC) said it would give companies that voluntarily report potential misconduct more lenient penalties under a new enforcement advisory. The CFTC’s enforcement division will assign a company’s efforts one of three following rankings – “no self-report,” “satisfactory self-report” or “exemplary self-report” – based on information the company submits.

FTC

• Inquiry on Tech Censorship Launched – The Federal Trade Commission (FTC) launched a public inquiry to better understand how technology platforms deny or degrade users’ access to services based on the content of their speech or affiliations, and how this conduct may have violated the law. The review, open for public comment until May 21^st, is interested in understanding how consumers – including by potentially unfair or deceptive acts or practices, or potentially unfair methods of competition – have been harmed by the policies of tech firms.
• Merger Guidelines In Effect – FTC Chair Andrew Ferguson along with Omeed Assefi, the acting head of the Department of Justice’s Antitrust Division, announced that the strict 2023 Merger Guidelines developed under the previous Administration will continue to be used.