D.C. Insider October 2025: Shutdown Begins — No End In Sight

In the October 2025 edition of The ICR D.C. Insider, the Federal Government shutdown begins, the Supreme Court to rule on President Trump’s broad tariff power and allows removal of the FTC’s lone Democrat commissioner, China export controls blacklist is expanded, and more. Our insights and analysis of developments in Washington and what could have an immediate and long-term impact on your business.

Federal Government Shutdown

• Shutdown Begins With No End In Sight – The Federal Government has entered its first shutdown in nearly seven years after Congress could not agree on a funding package, halting all but essential government functions. With about 750,000 federal employees now furloughed, virtually all key agencies are effectively closed meaning that the Securities and Exchange Commission (SEC) will not be approving transactions, so too for the Federal Trade Commission (FTC) and the Department of Justice (DoJ). Economic data will also not be released by any government agency. The timeline for a resolution is unclear.
  • Only 393 of the SEC’s roughly 4,300 employees — 9 percent of the staff — keep coming to work during a shutdown, according to its latest contingency plan. The Commodity Futures Trading Commission (CFTC), meanwhile, is keeping just under 6 percent of its staff during the shutdown. In its contingency plan, the derivatives regulator said it “will severely curtail its operations” and “expects that the vast majority of the agency’s operations will cease.”

Tariffs

• Supreme Court to Rule on President Trump’s Broad Tariff Power – In November, the Supreme Court hear the Trump Administration’s case to preserve its sweeping global tariffs, setting the stage for a final ruling on a cornerstone of the president’s economic agenda. The tariffs, which were dealt a string of defeats in the lower courts, are set to remain in place until the case is decided. At issue is a 1977 law – the International Emergency Economic Powers Act (IEEPA) – that the Administration says allows it broad powers to impose baseline levies of 10% on virtually every country, and much higher rates for countries that don’t cut deals with the U.S., as well as an additional set of tariffs for Canada, China and Mexico.
• New Tariffs on Lumber, Cabinets and Furniture – Via a provision of a national security law, known as Section 232 (which differs from the IEEPA discussed above) President Trump imposed new tariffs on imports of lumber, kitchen cabinets, and certain furniture products. Starting October 14^th, the U.S. will impose 10% tariffs on imported timber and lumber, according to an Executive Order, and 25% tariffs on upholstered wooden furniture products and kitchen cabinets. Tariffs on the furniture products will rise to 30% at the start of 2026, and tariffs on the cabinets will rise to 50%, according to the EO, with the Commerce Department authorized to further alter the tariffs in the future.

SEC

• Mandated Quarterly Reporting Examined – Following President Trump’s comments on Truth Social that companies should no longer be required to report their earnings on a quarterly basis, and instead, report every six months, Securities and Exchange Commission (SEC) Chairman Paul Atkins said his agency will propose a rule change. Atkins said if the rule change is approved, it will be left to companies to decide whether they switch to semiannual or stay with quarterly, “For the sake of shareholders and public companies, the market can decide what the proper cadence is,” he said. The SEC can implement the change with a simple vote of the Commissioners (where there is a 3-1 Republican majority). Today, foreign private issuers already adhere to semiannual reporting. Atkins also said the agency will look at what type of information companies need to disclose to investors.
• Shareholders Will Now Have to Arbitrate Rather Than Use Class Actions – In a major policy shift, the SEC will now allow public companies to require shareholders to arbitrate their claims v. filing class action litigation. With a 3-1 vote, the Commission issued the new policy stance that states that it does not view the inclusion of a mandatory arbitration clause in a company’s governance documents as inconsistent with decades-old U.S. investor protection laws. Chairman Atkins said that this change would bolster the market for new listings by freeing start-ups of burdensome compliance requirements. Allowing mandatory arbitration is a first step of an effort “to make I.P.O.s great again.”
• Task Force to Investigate Securities Fraud by Foreign Companies – The SEC launched a task force to identify and combat cross-border fraud harming U.S. investors. The Cross-Border Task Force will focus initially on investigating potential U.S. federal securities law violations related to foreign-based companies, including potential market manipulation, such as “pump-and-dump” and “ramp-and-dump” schemes.  The task force also will focus enforcement efforts on gatekeepers, particularly auditors, underwriters, and firms that work on China-related deals, which help these companies access the U.S. capital markets. In addition, it will examine potential securities law violations related to companies from foreign jurisdictions, such as China, where governmental control and other factors pose unique investor risks.
  • Nasdaq announced that it plans to strengthen its listing requirements, including a higher minimum public float for some new listings and a faster process to delist thinly traded companies. As part of proposed changes, companies operating primarily in China will need to raise at least $25 million in initial public offerings to get listed. The SEC must approve the changes.
• Foreign Companies Face Possible Changes in Financial Reporting – Chairman Atkins said the SEC may reconsider a nearly two-decade-old decision that allows global companies to rely on international accounting rules when reporting their results to U.S. investors. Current rules allow foreign companies to file financial statements using International Financial Reporting Standards (IFRS) accounting standards due to the IFRS Foundation’s formation and backing of the International Sustainability Standards Board (ISSB). Efforts to craft global climate reporting rules risk diverting resources and attention away from setting accounting rules that investors depend on, Atkins said according to prepared remarks to an Organization for Economic Cooperation and Development event in Paris.
• Foreign Issuer Rules Not Meant to Deter Listings – Proposed changes to the SEC’s definition of a foreign private issuer should not deter overseas companies from accessing U.S. capital markets, Chairman Atkins said. In June, the commission approved a concept release seeking public comment on a possible definition for foreign private issuers who are exempt from certain SEC disclosure requirements.
• Rulemaking Agenda Announced – The SEC unveiled its rulemaking agenda for the upcoming months, which could see broad proposals to revamp cryptocurrency regulations, reduce compliance burdens, explore new safe harbors, and a series of other fundamental changes. The items on the agenda represent the Commission’s renewed focus on supporting innovation, capital formation, market efficiency, and investor protection. Chairman Atkins noted that the agenda “covers a number of envisioned deregulatory rule proposals to reduce compliance burdens and facilitate capital formation, including by simplifying pathways for raising capital and investor access to private businesses. It discusses amending existing rules to improve and modernize them as well as address disclosure burdens.” He concluded his statement by saying: “[the agenda} reflects our withdrawal of a host of items from the last Administration that do not align with the goal that regulation should be smart, effective, and appropriately tailored within the confines of our statutory authority.” Key priorities include:
  • Digital asset regulation
  • Focus on capital formation
  • Material disclosures
  • Reducing required ESG-related disclosures
  • Updates to the shareholder proposal process
• Key Change to Enforcement Approach – Chairman Atkins announced the Commission will return to a practice of allowing companies to request waivers from follow-on consequences of enforcement actions while they pursue settlement discussions to resolve their case.

FTC

• Supreme Court Allows Removal of Lone Democrat Commissioner & Agree to Hear Case on Presidential Power to Remove Officials at Other Independent Agencies – While granting President Trump’s emergency request to remove the Federal Trade Commission’s (FTC) sole remaining Democratic commissioner, Rebecca Kelly Slaughter, over the dissent of three liberal justices, the Supreme Court said that it would formally reconsider a 90-year-old precedent (1935 decision known as Humphrey’s Executor) that has barred presidents from removing officials of independent agencies absent misconduct or other cause. The justices said they would hear oral argument in December over whether federal law protecting some officials from arbitrary removal infringes on the president’s constitutional power over the Executive Branch. 
• Non-Compete Agreements – The Trump Administration abandoned the government’s legal defense of a rule adopted under former President Joe Biden that had banned non-compete agreements. The FTC voted 3-1 to dismiss the appeal and take steps to vacate the rule.
  • Nevertheless, following that decision, FTC Chairman Andrew Ferguson made clear that the FTC would stay vigilant “enforcing the antitrust laws aggressively against noncompete agreements” including by “patrolling our markets for specific anticompetitive conduct that hurts American consumers and workers, and taking bad actors to court,” including warning letters to healthcare companies and staffing agencies and an October workshop on protecting workers from anticompetitive non-compete agreements.

China – Technology – Export Controls

• Export Controls Blacklist Expanded – The Commerce Department, through the Bureau of Industry & Security (BIS), unveiled a rule that will automatically add subsidiaries of listed companies to a U.S. trade blacklist, in a move aimed at preventing firms in China from bypassing Washington’s export controls. The interim final rule broadens the list of restricted entities to cover subsidiaries that are at least 50 percent owned by one or more listed entities, significantly expanding the number of firms on the blacklist. Not only ownership, but also significant ties among entities such as overlapping board members will trigger additional scrutiny as will any entity with a relationship to a person named on Treasury’s Specially Designated Nationals and Blocked Persons list.