Policy Risk Monitor – February 13, 2025
A weekly news scan of key policy areas to help firms identify and monitor policy risks.
Trade
Trump Imposes Tariffs on Steel and Aluminum
President Donald Trump imposed 25% tariffs on all U.S. imports of steel and aluminum, effective March 12, 2025. Trump said the U.S. steel and aluminum industries have been harmed by “unfair trade practices and global excess capacity.” Trump’s proclamation reinstates the earlier 25% tariff on steel imports and increases tariffs on aluminum imports from 10% to 25%. He warned that tariffs could go higher. EU officials said the bloc would impose “firm and proportionate countermeasures” in response to the tariffs. See Trump Imposes Tariffs on Steel and Aluminum.
Trump Announces Reciprocal Tariffs
President Donald Trump signed a memorandum calling for "fair and reciprocal" trade tariffs on every country that charges duties on U.S. imports. “[W]hatever countries charge the United States of America, we will charge—no more no less,” Trump said. The memo orders the Secretary of Commerce and U.S. Trade Representative to begin a country-by-country review of tariffs, taxes, including value-added taxes, regulatory requirements, exchange rates, and other barriers to U.S. exports to these markets. The memo orders a report within 180 days assessing whether "remedies" are necessary to ensure reciprocal trade relations.
The reciprocal tariffs are likely in place of his campaign pledge of universal tariffs of 10% to 20% that he proposed during his campaign. The tariff action marks a key plank in the Trump administration’s plan to “level the playing field” with countries on trade. As with the other tariffs, Trump enacted them through executive action.
Trump Delays De Minimis Suspension for Packages from China
President Trump temporarily delayed tariffs on low-cost packages from China. He delayed the suspension of the de minimis provision, which allows duty-free imports of items worth $800 or less.
China’s Tariffs on U.S. Imports Takes Effect
China’s tariffs on $14 billion of U.S. imports took effect February 10. China announced the retaliatory tariffs after President Donald Trump imposed additional tariffs of 10% on all Chinese goods.
United States Could Use Trade to Target EU ESG
The United States may use “trade tools” to retaliate against European ESG regulations, commerce secretary nominee Howard Lutnick said. The EU’s Corporate Sustainability Due Diligence Directive could bring the risk of litigation for U.S. companies if their value chains are not in compliance with EU ESG standards. Lutnick said he would “consider using all available trade tools at the Department’s disposal, as appropriate,” according to Bloomberg.
Tax
House and Senate Outline Budget Plans to Fund Trump Agenda
Senate Republicans released their own budget resolution as the groundwork for a budget reconciliation bill focused on border security, defense, and energy priorities. House Speaker Mike Johnson had requested the Senate to allow the House to take the lead. House Republicans prefer to pass “one big bill” that would also include the extension of the expiring provisions in the Tax Cuts and Jobs Act and potentially a debt ceiling suspension. Senate Republicans want tax legislation in a second reconciliation bill. House Budget Committee Chair also reportedly proposed a budget framework.
Trump Outlines Tax Priorities for House Republicans
President Donald Trump explained his tax priorities to a group of House Republicans. These priorities include increasing taxes on some financial firms; eliminating a tax break for owners of sports teams; renewing the expiring provisions in the Tax Cuts and Jobs Act; eliminating taxes on overtime pay, tips, and Social Security; reducing the corporate tax rate to 15% for companies that make products domestically; adjusting the state and local tax deduction; and ending the lower tax rate for carried interest.
Global Tax
France Will Keep Digital Tax on U.S. Tech Firms
France will not repeal its digital tax that hits major US tech multinationals despite risks of retaliation, Finance Minister Eric Lombard said. Trump earlier ordered protective measures if an investigation finds tax rules that are “extraterritorial or disproportionately affect American companies.” Lombard said the tax “is not a negotiating tool, we have it already in place. It’s not changing.”
U.S.-China
China is Making List of U.S. Tech Companies to Target
Chinese officials are making a list of U.S. technology companies to target with antitrust probes and other investigations. China is trying to gain leverage in expected negotiations with the Trump administration over U.S.-China issues.
Climate and Energy
SEC Will Not Defend Climate Reporting Law
The Securities and Exchange Commission (SEC) will not defend a rule requiring publicly held companies to disclose climate-related risks. The Enhancement and Standardization of Climate-Related Disclosures for Investors rule required emissions disclosures when that information might affect an investment decision. “The Rule is deeply flawed and could inflict significant harm on the capital markets and our economy,” acting SEC Chair Mark Uyeda said in a statement.
Trump Stops EV Charger Expansion
The Trump administration directed states to stop spending money for EV charging infrastructure. Then the Federal Highway Administration told states in a letter to that it is suspending approval of funds for the states from the National Electric Vehicle Infrastructure Formula Program. The administration will develop new guidelines for the program.
Foreign Investment
Trump Says Nippon Will Invest in U.S. Steel
President Trump said Japan’s Nippon Steel will invest in U.S. Steel instead of acquiring the company. Japanese Prime Minister Shigeru Ishiba also said Nippon would invest in U.S. Steel and not acquire the company. He said Japan would provide technology for the company to manufacture better quality products in the United States. Former President Biden blocked Nippon’s $14.9 billion acquisition of the company for national security reasons.
Trump Eases Enforcement of Ban on Bribery of Foreign Officials
President Trump ordered the Department of Justice to relax the enforcement of the Foreign Corrupt Practices Act, which prohibits U.S. companies from bribing foreign officials. Trump also directed U.S. Attorney General Pam Bondi to review current and past actions and prepare new guidelines for enforcement. The change in policy shift is to improve the competitiveness of U.S. businesses, as businesses in other countries are often not bound by similar rules. Opponents of the policy shift argue that it could hurt the U.S. business reputation.
Geopolitics
Trump and Putin Begin Negotiations to End Ukraine War
President Donald Trump and Russian President Vladimir Putin agreed to begin negotiations to end the war in Ukraine. Trump posted on Truth Social that he and Put had “agreed to have our respective teams start negotiations immediately.” Trump also said he will probably meet Putin in Saudi Arabia in the “not-too-distant future.” Earlier, Defense Secretary Pete Hegseth told NATO members that the United States would not contribute peacekeeping troops, that NATO membership for Ukraine was unrealistic, and that Ukraine would probably have to accept the loss of territory, according to Bloomberg.
U.S. Sees Ukraine as Source of Rare Earth Minerals
President Trump said the United States should receive “rare earth” elements from Ukraine in exchange for military assistance. “I told them [Ukraine] that I want the equivalent like $500B worth of rare earth. And they've essentially agreed to do that so at least we don’t feel stupid,” Trump said. Ukrainian President Volodymyr Zelensky said he is willing to make such an agreement. Treasury Secretary Scott Bessent will travel to Ukraine to discuss U.S. access to Ukraine's rare earth minerals, energy resources, and energy assets.
Vance Says United States to be AI “Gold Standard”
Vice President JD Vance criticized the EU for its regulatory approach to social-media platforms and artificial intelligence (AI) during a trip to France and said the Trump administration will work to make the United States the “gold standard worldwide” for AI. “The Trump administration is troubled by reports that some foreign governments are considering tightening the screws on U.S. tech companies with international footprints,” Vance said, according to Bloomberg. “Now America cannot and will not accept that, and we think it’s a terrible mistake, not just for the United States of America, but for your own countries.” Vance warned countries against helping foreign adversaries gain access to AI technology.
Google Warns that United States is Facing a Power Crisis to Support AI
Google’s energy executive said the United States is facing a power capacity crisis while the tech sector competes against China for dominance in artificial intelligence (AI). Google determined that the deployment of renewables was potentially causing grid instability. The company is using nuclear power after learning that utilities were investing in natural gas to back up renewables.