D.C. Insider May 2025: U.S. Investment Accelerator, Tariffs, Call for Proxy Process Reform and More

In the May 2025 edition of The ICR D.C. Insider, we share our insights and analysis about developments in Washington, D.C., including an update on tariffs, the U.S. Investment Accelerator, possibly proxy process reform, an ESG rule on the chopping block, and the latest on China. Learn what that could have an immediate and long-term impact on your business.

Tariffs

• As President Trump moved passed his first 100 days in office, changes and negotiations on tariffs continued. Notably, the President moved to soften the impact of the automotive tariffs, preventing duties on foreign-made cars from stacking on top of other tariffs that have been imposed and easing some levies on foreign parts used to manufacture cars in the U.S. The tariffs on China, however, will continue applying on top of the auto and parts tariffs. The White House also pointed to billions of dollars in investment commitments by companies to build factories and other facilities in the U.S.
• At the same time, China warned countries who enacted anti-China trade policies that they could face reciprocal measures should any trade deal between the U.S. and another nation negatively impact its trading. A spokesperson for China’s Commerce Ministry said: “Appeasement does not bring peace, and compromise does not earn respect.”
• John Moolenaar (R-Mich.), the Chairman of The House Select Committee on the Chinese Communist Party praised President Trump and highlighted the Restoring Trade Fairness Act, bipartisan legislation he introduced with Rep. Tom Suozzi (D-N.Y.), as the path forward for Congress to support tariffs. The bill would:
  • End China’s Most Favored Nation (MFN) status.
  • Create a separate tariff column for Chinese imports.
  • Impose tariffs of up to 100% on critical industries like semiconductors and defense-related technology.
  • Set a 35% baseline tariff on other Chinese goods.
  • Reinvest tariff revenue to rebuild America’s industrial base and strengthen national security.

The U.S. Investment Accelerator

• New Office to Facilitate Investment – As part of the Trump Administration’s broader “America First” agenda that aims to reinvigorate U.S. production and manufacturing while reducing reliance on imports, former Morgan Stanley Silicon Valley executive Michael Grimes is leading the effort to encourage domestic and foreign companies to invest money in the U.S. The Accelerator (as part of the Commerce Department) doesn’t plan to be an investor itself. Instead, the plan is for Grimes to provide white-glove service to companies that commit to investing $1 billion or more in the U.S. – and the office is responsible for overseeing the implementation of the Chips Act passed in the previous administration.

SEC

• Paul Atkins Sworn in as SEC Chairman – Paul Atkins was sworn into office as the 34^th Chairman of the Securities and Exchange Commission (SEC). With decades of experience at the Commission and in the private sector, Atkins is expected to pursue a deregulatory agenda that could entail crafting new rules for the cryptocurrency industry, clearing the way for more companies to go public in the U.S., and opening the private markets to more investors. Importantly, following his swearing in, Atkins said:
  • “It is time for the SEC to end its waywardness and return to its core mission that Congress set for it: investor protection, fair, orderly and efficient markets, and capital formation. A top priority of my chairmanship will be to provide a firm regulatory foundation for digital assets through a rational, coherent, and principled approach.”
  • On crypto: “Innovation, unfortunately, has been stifled for the last several years due to market and regulatory uncertainty that unfortunately the SEC has fostered. We have, I think, a large gambit of ability to operate. It’s always good to have Congress’ input, and if there’s a statute to back up what we’re doing, then all the better, but I think we have ample room to maneuver.”
• BRT Calls For Proxy Process Reform – The Business Roundtable (BRT) is urging the SEC and Congress to quickly reform the shareholder proposal process for public companies, including banning activists’ proposals relating to environmental, social, and political issues. The group, which is comprised of more than 200 CEOs of American businesses, published a white paper that recommends various policy updates intended to address what it described as a “deeply flawed” system “beset by ideology-driven shareholder proposals” and “unaccountable proxy advisory firms.”
• House Republicans Call for More Proxy Advisor Oversight – House Financial Services Republicans are calling for additional SEC oversight and regulations of proxy advisers and proxy voting, specifically the two firms that dominate the proxy advisory market, the political influence of the firms, and ESG metrics. Financial Services Capital Markets Subcommittee Chair Ann Wagner (R-Mo.) said it was “troubling” that not only do two firms – Institutional Shareholder Services (ISS) and Glass Lewis – control 97% of the proxy advisory market, and that it was concerning “how their influence goes far beyond their research” and that there are “clear conflicts of interest.”

FTC

• Targeted Advertising Reevaluated – Christopher Mufarrige, the newly appointed Director of the Federal Trade Commission’s (FTC) Bureau of Consumer Protection, said that using pejorative labels, like “surveillance advertising,” for example, “does nothing to help us understand the practice.” In a recent speech, he added: “Targeted advertising, like any practice, can be good, it can be bad – it depends on how it’s used. We shouldn’t be dogmatic in the way we approach these things; we should use evidence to understand what’s going on in the marketplace and then choose regulatory approaches that make sense for consumers.”
• FTC Launches Public Inquiry into Anti-Competitive Regulations – The FTC launched a public inquiry into the impact of federal regulations on competition, with the goal to identify and reduce anticompetitive regulatory barriers. The FTC launched this inquiry in response to President Trump’s Executive Order on Reducing Anticompetitive Regulatory Barriers. The public comment period is open through May 27, 2025.

Labor

• ESG Rule on the Chopping Block – The Department of Labor is considering rescinding its Biden-era rule that permits retirement plan fiduciaries to consider environmental, social, and governance factors when selecting investments. Also, the Department has requested that the Fifth Circuit Court of Appeals suspend litigation over this rule.

China

• China Exempts Some U.S.-Made Semiconductors from Tariffs – China quietly lifted 125% tariffs on at least eight classifications of U.S.-made semiconductors, according to import agencies in Shenzhen, as the country looks to shield its tech sector from the trade war fallout. China also removed tariffs on U.S. aircraft parts, including engines and landing gear, according to a company involved. Earlier changes spared chips designed by American firms but made outside the U.S., like Nvidia, and products manufactured by Taiwan Semiconductor Manufacturing Company (TMSC). The latest exemptions focus on logic chips, while memory chips, an area led by South Korean firms, remain under higher tariffs.
• House Select Committee on China Urges U.S. Underwriters to Abandon IPO of Chinese Company – The House Select Committee on the Chinese Communist Party, Chairman John Moolenaar (R-Mich.), called on JPMorgan Chase and Bank of America to withdraw from their roles in the upcoming Hong Kong initial public offering (IPO) of Contemporary Amperex Technology Co., Limited (CATL), an electric vehicle battery giant. In letters sent to the banks, Rep. Moolenaar warned that the banks’ participation would aid a company identified by the Department of Defense (DOD) as linked to the Chinese military under Section 1260H of the National Defense Authorization Act (NDAA). By underwriting CATL’s offering, Bank of America and JPMorgan Chase are exposing themselves and their American investors to “serious regulatory, financial, and reputational risks,” Moolenaar noted.
• Port Fee Update – The Trump Administration decided to shield domestic exporters and vessel owners servicing the Great Lakes, the Caribbean, and U.S. territories from port fees to be levied on China-built vessels to help revive shipbuilding. The Federal Register notice posted by the U.S. Trade Representative (USTR) was watered down from a February 2025 proposal for fees on China-built ship of up to $1.5 million per port call. The fees will be applied once each voyage on affected ships a maximum of six times a year.