On the evening of April 9, 2025, the Trump administration released a pair of deregulatory executive actions that could have major implications for any industry subject to federal rules — and are also likely to be a magnet for litigation. These orders come fast on the heels of an April 8 executive order, “Protecting American Energy from State Overreach,” which announces actions to curtail state and local laws and policies focused on climate change and environmental justice.
First and more straightforward of the two is a presidential memorandum titled “Directing the Repeal of Unlawful Regulations,” which directs the heads of all executive departments and agencies to “identify certain categories of unlawful and potentially unlawful regulations within 60 days” and to submit summaries of the targeted regulations to the White House within 90 days.
In so doing, agencies are directed to “evaluat[e] each existing regulation’s lawfulness” under a list of 10 Supreme Court decisions from the past 10 years. First on the list, curiously, is Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024), which reversed Chevron deference by shifting the power to interpret ambiguous statutory authority from the executive to the judicial branch. Agencies are also encouraged to repeal targeted regulations without notice and comment, “where doing so is consistent with the ‘good cause’ exception in the Administration Procedure Act.” Given that this exception has historically been read narrowly, implementation of this order may spark a wave of legal challenges.
The second action, an executive order titled “Zero-Based Regulatory Budgeting to Unleash American Energy,” directs agencies and sub-agencies that regulate energy industries to amend “all regulations” promulgated under a specified list of statutes to include a “Conditional Sunset Date” by no later than September 30, 2025.[1] Section 4(a). “Conditional Sunset Date” is defined as “the date a regulation will cease to be effective and be removed from the Code of Federal Regulations, if the agency does not extend the Sunset Date[.]” In order to extend the sunset date for a regulation, an agency must affirmatively seek public comment on “the costs and benefits of each regulation” prior to the expiration of the rule. These extensions can be offered indefinitely, but each extension can be no more than five years in duration. Section 4(d).
This order comes with a potentially significant exemption, as it “shall not apply to regulatory permitting regimes authorized by statute.” Section 5(c). However, it is unclear how the administration will define a “permitting regulation,” as many regulations are hybrids of permitting, enforcement, and other purposes. The extent to which a particular regulation is “authorized by statute” can also be ambiguous, and (as noted above) agencies are not afforded the same deference on such matters as they were in the Chevron era.
This order and its implementation could likewise face multiple legal challenges. Notably, the order creates a great deal of sophisticated new regulatory work for federal agencies at a moment when career staff are depleted and demoralized. Finally, while the logic of a sunset provision is understandable (and many energy regulations have long outlived their utility), its broad application could create major regulatory uncertainty for the very energy industries that this administration hopes to catalyze.
Troutman Pepper Locke will continue to monitor these orders as they are implemented. For questions or to discuss how these developments may impact your business and projects, please contact the authors.
[1] We note that some of the statutes listed in the order are paired with the wrong agencies—for instance, the National Marine Fisheries Service (and not United States Fish and Wildlife Service) administers the Marine Mammal Protection Act and the Magnuson–Stevens Fishery Conservation and Management Act.
On February 10, President Trump issued Proclamations 10896, “Adjusting Imports of Steel Into the United States” and 10895 “Adjusting Imports of Aluminum Into the United States,” (together, Proclamations), reasserting U.S. national security concerns and implementing additional tariffs on steel, aluminum, and their derivative products under Section 232 of the Trade Expansion Act of 1962, building upon the original tariffs imposed pursuant to Proclamation 9704, “Adjusting Imports of Aluminum Into the United States” and Proclamation 9705 “Adjusting Imports of Steel Into the United States” in 2018. These new measures not only restore duties that had been eased or suspended in recent years but also raise the tariff rate on aluminum — from 10% to 25% — and expand tariff coverage to include select derivative steel and aluminum products.
Evolution of Section 232 Tariffs
The foundation for these latest tariffs was laid in March 2018, when President Trump enacted a 25% tariff on steel imports and a 10% tariff on aluminum imports from most trading partners under Section 232. In 2020, President Trump issued Proclamation 9980, “Adjusting Imports of Derivative Aluminum Articles and Derivative Steel Articles Into the United States,” expanding the tariffs to include certain derivatives of steel and aluminum articles. Although, the U.S. had negotiated exceptions and tariff-rate quotes through bilateral agreements and proclamations for many trading partners, including Argentina, Australia, Brazil, Canada, the EU, Japan, South Korea, Mexico, and the UK for derivatives of steel, and Argentina, Australia, Canada, the EU, Mexico, and the UK for derivatives of aluminum. The Proclamations amend the earlier proclamations by expanding the scope of covered products, adjusting tariff rates, and terminating existing exemptions for these trading partners.
Effective Date
These duties apply to Covered Products that are entered into the U.S. for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. EST on March 12, 2025.
Tariff Rates
As of March 12, a 25% tariff has applied to imports of both steel and aluminum, as well as a newly expanded list of downstream derivative products. Importantly, the way the tariff is calculated differs depending on the product. For certain goods, the 25% duty is imposed on the entire value of the finished article. For others, the tariff only applies to the value of the steel or aluminum content within the final product. This distinction is especially relevant to manufacturers sourcing mixed-material goods or importing complex assemblies containing only a portion of steel or aluminum by value. Although, it is important to note that not all products containing steel or aluminum are automatically subject to this tariff — the tariffs apply only to Covered Products (defined below).
Imports of derivative aluminum products are now subject to a 200% tariff if any portion of the aluminum used in the production was smelted in Russia, or if the derivative articles themselves were cast in Russia. This steep duty targets both the origin of the raw material and the location of the final processing, effectively discouraging the use of Russian aluminum at any stage of the supply change.
U.S. Customs and Border Protection (CBP) has issued separate aluminum and steel guidance on the implementation of these additional tariffs for steel, aluminum, and their derivative products imported into the U.S., including steel and aluminum content reporting requirements, applicable duties to various classifications of steel, aluminum, and their derivative products under the Harmonized Tariff Schedule of the United States (HTSUS), and melt and pour and smelt and cast reporting requirements.
New reporting obligations under these Section 232 tariffs introduce complex requirements for importers of derivative products that contain steel or aluminum, which include disclosure of detailed information about the composition and value of those materials. For example, if the value of the steel or aluminum content is less than the entered value of the imported article, the good must be reported on two separate lines of the CBP entry summary form. One line must reflect the value of the non-steel or non-aluminum components while the other line must account for the steel or aluminum portion of the product. This requirement demands that importers have clear visibility into the material breakdown of their goods, particularly the percentage and value of steel or aluminum included. For exports and manufacturers, especially those with complex supply chains or products with embedded aluminum or steel, this creates significant compliance hurdles. Accurate documentation of the aluminum and steel content in the bill of materials is now essential for properly calculating and applying the Section 232 tariffs.
Product Scope
Products subject to this 25% tariff include steel and aluminum articles that were initially described in Proclamation 9704 and Proclamation 9705, steel and aluminum derivative articles that were initially described in Proclamation 9980, and the steel and aluminum derivative articles described in Proclamations 10896 and 10895 (collectively, Covered Products), which includes an expanded list of downstream derivative products and covers a wide array of further-processed items that incorporate steel or aluminum components. Compared to earlier iterations, the updated list represents a broader and more inclusive definition of what qualifies as a derivative article.
Section 232 duties will be collected on the value of articles classified under HTSUS Chapters 72 and 73 (for steel) or HTSUS Chapter 76 (for aluminum), or on the value of the steel or aluminum content in derivatives classified outside of HTSUS Chapters 73 and 76, imported on or after March 12, 2025.
The Trump administration has indicated that it intends to continue expanding the items on these lists through a process to be established by the Commerce Department (Commerce) on or before May 11. Commerce will open a process that will allow U.S. producers and industry associations to request that additional derivative articles be added to the tariff list.
Exclusions
Agreements that had suspended Section 232 duty relief for covered steel and aluminum imports from Argentina, Australia, Brazil, Canada, the EU, Japan, Mexico, South Korea, Ukraine, and the UK were terminated as of March 12.
The Proclamation officially ends, at least for now, the Section 232 product exclusion process that previously allowed Commerce to exempt certain steel and aluminum articles, including derivative products, from additional tariffs. Under the former system, exclusions could be granted if a product was not “in a sufficient and reasonably available amount or of a satisfactory quality,” or if national security concerns supported removing the duty. However, as of March 12, Commerce will no longer accept or review new exclusion requests or renew existing ones. Previously approved exclusions remain valid until either their expiration date or the approved import volume is reached, whichever comes first. In addition, all generally approved exclusions — which had allowed broad relief for commonly used items — were terminated in full on March 12.
If a product is manufactured outside the U.S. using steel that was originally melted and poured in the U.S. or aluminum that was smelted and cast domestically, the final product may qualify for a tariff exemption — even if additional processing took place outside the U.S. For example, a Canadian-made item derived from U.S. origin steel or aluminum could be excluded from the Section 232 tariffs, provided the origin of the core material meets the production standards.
To implement this exemption effectively, CBP is expected to issue further guidance detailing how importers should verify and document their supply chains to demonstrate compliance with smelting and casting or melting and pouring requirements. Importers of steel and aluminum derivative products will be required to submit documentation that clearly identifies the origin and composition of the aluminum and steel used in the manufacturing process. This may include melt and pour certifications for steel or smelt and cast records for aluminum, as well as other supporting materials that verify the source and content of the steel and aluminum within the imported derivative articles.
These tariffs are in addition to any other duties, fees, charges, or trade remedies (e.g., Sections 201 and 301 tariffs) applicable to such imported steel, aluminum, and their derivative products, except the reciprocal tariff framework introduced under the April 2 Executive Order, “Regulating Imports with a Reciprocal Tariff to Rectify Trade Practices that Contribute to Large and Persistent Annual United States Goods Trade Deficits,” which exempts goods covered by Section 232 tariffs from these additional “reciprocal” tariffs.
FTZ and Duty Drawback
Goods subject to these tariffs cannot be entered into the U.S. from a foreign trade zone (FTZ) in privileged foreign status unless duties are paid. In practice, this means FTZ users must either pay the applicable Section 232 duties or adjust the status of their inputs, adding complexity for companies using FTZs to manage supply chain costs.
Generally, Section 232 tariffs are not eligible for duty drawback, meaning importers cannot recover these duties even if the goods are subsequently exported. This significantly affects industries like automotive, aerospace, and heavy machinery that traditionally rely on drawback mechanisms to manage costs for global production chains.
Responses From Trading Partners
The renewed tariffs have sparked strong opposition abroad. Governments in the EU, the UK, Japan, and several other trading partners have denounced the measures, arguing that they represent a return to aggressive, protectionist trade policies that disrupt established international agreements. These countries are actively reviewing their response strategies, with some considering the launch of dispute resolution proceedings through the World Trade Organization, while others weigh the potential for retaliatory tariffs. The diplomatic fallout from these proclamations has the potential to intensify ongoing trade tensions and complicate international negotiations.
Conclusion
This alert is intended as a guide only and is not a substitute for specific legal or tax advice. Things are rapidly changing by the day and hour, and our Tariff Task Force will do its best to provide timely and relevant updates as things progress. Please don’t hesitate to reach out to us with questions.
State attorneys general increasingly impact businesses in all industries. Our nationally recognized state AG team has been trusted by clients for more than 20 years to navigate their most complicated state AG investigations and enforcement actions.
State Attorneys General Monitor analyzes regulatory actions by state AGs and other state administrative agencies throughout the nation. Contributors to this newsletter and related blog include attorneys experienced in regulatory enforcement, litigation, and compliance. Also visit our State Attorneys General Monitor microsite.
Contact our State AG Team at StateAG@troutman.com.
Multistate AG Updates
State AGs and the FTC Warn of 23andMe Risks Following Bankruptcy Announcement
By
Several state attorneys general (AGs) and the Federal Trade Commission (FTC) have begun scrutinizing ancestry tracking company 23andMe following its recent announcement that it has filed for Chapter 11 bankruptcy. As part of these efforts, the AGs have issued alerts on ways consumers can exercise their rights under state privacy laws, and the FTC has issued letters stressing potential risks to U.S. bankruptcy trustees. 23andMe, which was founded in 2006, has collected DNA and associated genetic material on seven million American customers to provide information related to those customers’ ancestry.
Single State AG Updates
Mass. AG Emerges as Key Player in Consumer Protection
By
Published in Law360 on April 4, 2025. © Copyright 2025, Portfolio Media, Inc., publisher of Law360. Reprinted here with permission.
Massachusetts Attorney General Andrea Campbell has emerged as a significant figure in the landscape of consumer protection and corporate accountability. Her actions and initiatives have positioned her as a thought leader among state attorneys general, particularly in the context of national efforts to safeguard consumer rights.
Lone Star Crackdown: Amid a Patchwork of State Regulations, Texas Moves to Ban Lottery Courier Services
By
In a significant regulatory shift, the Texas Lottery Commission has enacted an immediate ban on lottery ticket courier services in the state, effective February 24. This decisive move marks a stark departure from the commission’s previous position that it lacked jurisdiction over these couriers. State officials in Texas backing the change assert that groups who buy mass quantities of lottery tickets using unregulated lottery couriers avoid safeguards in the regulatory system and undermine public trust in the lottery system.
Crypto Investment Firm Agrees to Pay New York AG $200M to Resolve Market Manipulation Allegations Regarding Sale of Failed Token
By
On March 24, cryptocurrency investment firm Galaxy Digital Holdings (Galaxy) entered into an assurance of discontinuance (AOD) with New York Attorney General (AG) Letitia James to resolve allegations that Galaxy engaged in misrepresentations when it promoted the failed algorithmic cryptocurrency Luna from 2020 to 2022.
Massachusetts AG Indicts Health Care Providers and Owners for Submission of Allegedly False Medicaid Claims
By
The Office of Massachusetts Attorney General (AG) Andrea Campbell announced the criminal indictment of several Massachusetts-based health care providers and their owners in connection with allegedly false claims they submitted to the Massachusetts Medicaid program, MassHealth. In what Campbell characterized as a fraud and kickback arrangement, the defendants submitted more than $7.8 million in false claims for reimbursement associated with urine drug tests and home health services that were not provided, not medically necessary, or not properly authorized.
Florida AG Settles Alleged Moving Brokerage Scheme, Banning Defendants and Securing $4M in Judgments
By
On March 21, Florida Attorney General (AG) James Uthmeier’s Consumer Protection Division announced the resolution of ongoing litigation against a network of moving brokerage companies accused of misleading consumers. These companies, including Gold Standard Moving and Storage, allegedly misrepresented their services by claiming to offer professional, door-to-door moving services when they were operating as brokers, quoting low prices to secure large up-front deposits and then outsourcing the moving tasks to unvetted third-party carriers. According to the AG’s office, this practice frequently led to consumers allegedly facing additional and unexpected costs.
AG of the Week
Rob Bonta, California
On April 23, 2021, Rob Bonta was sworn in as the 34th attorney general (AG) of the state of California, the first person of Filipino descent and the second Asian-American to occupy the position.
Bonta’s parents instilled in him the lessons they learned from the United Farm Workers and the civil rights movement, inspiring his decision to become an attorney. He worked his way through college and graduated with honors from Yale University and attended Yale Law School.
As the people’s attorney, he sees seeking accountability from those who abuse their power and harm others as one of the most important functions of the job. In elected office, he has taken on powerful interests and advanced systemic change — pursuing corporate accountability, standing up for workers, punishing big polluters, and fighting racial injustice. He has been a leader in the fight to transform the criminal justice system, banning private prisons and detention facilities in California, as well as pushing to eliminate cash bail in the state. He has led statewide fights for racial, economic, and environmental justice and worked to further the rights of immigrant families, renters, and working Californians.
Prior to serving in the Assembly, Bonta worked as a deputy city attorney for the City and County of San Francisco, where he represented the city and county and its employees, and fought to protect Californians from exploitation and racial profiling.
California AG in the News:
-
On April 7, Bonta announced a multistate settlement with pharmaceutical company Mylan Inc. for its role in the opioid crisis.
-
On April 4, Bonta announced a settlement with HomeOptions, a realty company based in Oakland, that engaged in a predatory real estate scheme.
-
On April 4, Bonta reaffirmed California’s continued commitment to fight to protect grants that support K-12 teacher preparation pipeline.
Upcoming AG Events
-
April: RAGA | Energy Summit | Houston, TX
-
April: AGA | International Delegation | Rome, Italy
-
May: RAGA | ERC Retreat | Oahu, HI
For more on upcoming AG Events, click here.
More often than not, Chapter 11 debtors seek to exit bankruptcy by confirming a Chapter 11 plan of reorganization or liquidation. However, not only is this approach expensive, but it requires that the debtors have sufficient funds to pay administrative and priority claims in full in order to confirm the plan. A structured dismissal is sometimes proposed as an alternative to a Chapter 11 plan of liquidation or conversion of the bankruptcy case to Chapter 7.
This article will go over the key issues of a structured dismissal for creditors in a bankruptcy case. To access this article and read other insights from our Creditor’s Rights Toolkit, please click here.
This article was originally published on April 8, 2025 on Law360 and is republished here with permission.
This article is part of a monthly column that connects popular culture to hot-button labor and employment law issues. In this installment, we focus on the workplace anti-harassment lessons learned from the litigation involving the stars of “It Ends With Us.”
The drama of “It Ends With Us” has jumped from the book to the big screen to a real-life legal battle that offers a sharp reminder of how retaliation and digital misconduct can derail even the most powerful players in any type of workplace setting.
While the story in the book and film centered on domestic violence, the real-world fallout surrounding the film production teaches us two major workplace lessons. First, employers must take meaningful steps to prevent harassment from happening in the first place, and mitigate the risk of harassment and retaliation claims being filed against them. And second, social media must be treated as a serious risk area, never as an afterthought.
“It Ends With Us” Background
The 2024 movie, which was based on the best-selling novel by Colleen Hoover, follows the story of Lily Bloom, played by Blake Lively, and her relationship with her husband, Ryle Kincaid, played by Justin Baldoni, who also directed the movie. As the story progresses, Ryle becomes increasingly abusive to Lily, both psychologically and physically, hitting her in the face, pushing her down the stairs and ultimately even biting her.
In addition to its dark and dramatic content, the filming of the movie has created drama in the form of two lawsuits filed by the lead celebrities against each other after the movie was released. On Dec. 31, 2024, Lively filed a lawsuit against Baldoni, the studio and others for sexual harassment, retaliation, breach of contract, intentional and negligent infliction of emotional distress, and false light invasion of privacy in the U.S. District Court for the Southern District of New York.
In Lively v. Wayfarer Studios LLC, she alleges that Baldoni engaged in numerous inappropriate sexual comments and conduct during the movie’s filming. Lively alleged further that, after the film was released, Baldoni retaliated against her for complaining about his on-set conduct by planting allegedly false posts on social media in an attempt to “bury” her, i.e., destroy her reputation.
Two weeks later, Baldoni brought a separate suit against Lively, her husband Ryan Reynolds and others in the same court. Baldoni’s suit, Wayfarer Studios v. Lively, alleges that Lively’s claims of sexual harassment were false and that she cherry-picked text messages between him and others, culminating in a false story fed to The New York Times with the intent to harm his reputation.
The lawsuit alleges claims for civil extortion, defamation, false light invasion of privacy, breach of implied covenant of good faith and fair dealing, intentional interference with contractual relations, and intentional and negligent interference with prospective economic advantage, and seeks $400 million in compensatory damages.
While both cases remain pending, the complaints provide some important lessons for employers in all industries.
Reducing Harassment and Retaliation Claims
First, it is important to remember that any action, whether formal or informal, that could dissuade a reasonable person from speaking up about workplace misconduct can become part of a retaliation claim. That includes public comments, damage to reputation and even digital smear campaigns like Lively alleges in her complaint.
Employers should also remember that, even if employment has ended, post-employment retaliatory behavior still can expose them to serious legal liability. That is, an employee or former employee who engages in protected activity can raise a claim of retaliation if they are subjected to causally connected adverse actions, such as negative job references, or as here, the filing of a lawsuit against them.
Additionally, while Lively and Baldoni have differing views on the conduct that occurred in the workplace — conduct that Lively describes as harassment — all employers have an obligation to avoid creating a hostile work environment, including harassment on the basis of any protected characteristic (here, sex). Having strong harassment policies, comprehensive anti-harassment training, and a clear reporting mechanism for any violations, can go a long way toward helping employers to avoid such claims or mount a defense against them.
Here is what employers can do.
Make reporting safe and accessible.
While retaliation claims arise after someone speaks up, preventing them starts with a strong reporting infrastructure. A harassment or retaliation policy is only as strong as its reporting options.
If the alleged wrongdoer is the only listed contact for reporting harassment or discrimination to, the policy fails. Organizations must offer alternative, clearly communicated paths for reporting, even in small teams or companies with few layers of leadership.
Training from the top down matters.
It is important that all employees, including senior leadership, receive thorough and frequent harassment training. Senior leadership is not immune from claims.
On the contrary, the public-facing nature of their jobs make them even more susceptible. So executives should receive the same (or more) training on what constitutes harassment and retaliation and what does not. The higher the rank, the greater the scrutiny.
It is crucial to follow through.
Even after a complaint is resolved or employment ends, employers must continue to be cautious. Post-employment retaliation, such as negative statements or interference with future job opportunities, can still trigger liability.
The Dark Side of Digital Media
In an era of direct messages and Slack threads, misconduct can unfold far from the office floor. Targeted online messaging and public “astroturfing” (appearing like grassroots support while being privately coordinated) can all be used to intimidate, retaliate or silence complainants.
The Lively-Baldoni case brings this to life. Allegations of manipulated media campaigns, doctored communications and retaliatory leaks demonstrate how quickly social media can complicate a situation. Employers must ensure that the use of digital tools, internally and externally, is aligned with their anti-harassment and anti-retaliation policies.
There are a few best practices for managing digital risks.
Treat informal channels as formal.
Texts, messaging apps and social platforms should be considered extensions of the workplace. If it would not be acceptable in an email, it should not be allowed in a group chat. Train employees, and especially managers, to apply professional standards across all platforms.
Encourage use of company devices.
Limit business texting and encourage employees to use company-sanctioned communication tools where messages can be logged and retrieved if needed. Text messages on personal devices are hard to track and even harder to collect during litigation.
Audit your digital footprint and current policies.
It is important to know that targeted online narratives can backfire, especially if they appear retaliatory. A reputational response plan should focus on truth, transparency and professionalism, not takedowns.
Consider updating harassment policies as well. Make sure these policies explicitly address digital conduct, including cyberstalking, doxing and inappropriate content shared through workplace channels.
The Bottom Line
Preventing harassment and retaliation claims, and curbing digital misconduct, requires more than checking a box. It calls for thoughtful leadership, active policy enforcement and awareness that power, especially when amplified online, can be abused.
The real-life drama behind “It Ends With Us” serves as a cautionary tale of what can happen when workplace power dynamics, weak reporting structures and unchecked digital narratives collide. Whether you are on a film set or in a boardroom, the consequences of getting it wrong can be public and costly.
Troutman Pepper Locke’s Erin Whaley, Brent Hoard, Emma Trivax, and Timothy Shyu recently authored a Reuters Legal News article “New Legal Developments Herald Big Changes for HIPAA Compliance in 2025,” where they discuss significant privacy and security considerations facing the health care industry in 2025.
Troutman Pepper Locke’s Albert Bates, Jr. and R. Zachary Torres-Fowler recently authored a Reuters Practical Law: The Journal article, “Arbitrating Construction Disputes,” where they discuss the steps and considerations involved in arbitrating a construction dispute in the U.S., including the issues that parties should consider before arbitrating a dispute, the steps parties should take to prepare for the arbitration, and the process for presenting claims and defenses during the arbitration hearing.
Click here to read the full article in Reuters Practical Law: The Journal.
On March 26, President Trump issued Proclamation 10908, “Adjusting Imports of Automobiles and Automobile Parts Into the United States” (Proclamation), imposing a 25% additional tariff on imports of passenger vehicles, light trucks, and specific automotive parts under Section 232 of the Trade Expansion Act of 1962 (Section 232). The action revives a prior Section 232 investigation from 2019, which concluded that foreign automotive imports posed a threat to U.S. national security. Relying on that earlier determination, the current Proclamation avoids the need for a new investigation and allows for rapid imposition of trade measures. The administration has indicated that these tariffs are intended to be permanent, with no sunset date or review mechanism included. Citing national security concerns related to the U.S. automotive sector’s reliance on foreign manufacturing and technology, the administration’s action marks another demonstration of its significant shift in trade policy. The new tariffs are expected to have wide-ranging implications for automotive manufacturers, suppliers, and distributors.
The U.S. imports a significant portion of its vehicles from a few key countries, each contributing substantially to the overall market. In 2024, Mexico was the largest source, supplying approximately 22.8% of total car imports. Japan followed closely, representing 18.6%, while South Korea accounted for a market share of 17.3%. Other notable contributors include Canada with 12.9% of the import market and Germany at 11.7%. These five countries collectively dominate the U.S. automotive import sector, with Mexico, Japan, and South Korea being the top three suppliers by volume. In terms of value, Mexico led with $49.98 billion in 2024, followed by Japan at $40.76 billion, and South Korea at $38.02 billion.
Effective Dates
- Automobiles: The 25% tariff on automobiles became effective on April 3, 2025.
- Automotive Parts: The tariff on specified automotive parts will take effect on a date to be announced in the Federal Register, but no later than May 3, 2025.
Products Subject to Tariffs
All imports of articles specified in Annex I to the Proclamation or in any subsequent annex to the Proclamation are subject to the 25% tariff. This includes passenger vehicles (e.g., sedans, SUVs, crossovers, minivans, and cargo vans) and light trucks (i.e., vehicle weight up to 8,500 lbs; payload capacity up to 4,000 lbs). It also includes automotive parts, such as engines, transmissions, powertrain parts, and electrical components, with processes to expand tariffs on additional parts if necessary.
Exemptions and Exclusions
Automotive parts imported under the U.S.-Mexico-Canada Agreement (USMCA) are temporarily excluded from these tariffs. This exclusion will transition to a partial exemption based on U.S. content in the future, once the U.S. Secretary of Commerce establishes a process to calculate and apply the tariff solely to the non-U.S. content of each part and issues a corresponding notice in the Federal Register. In addition, the U.S. Department of Commerce will establish a process before June 24 for domestic producers and industry associations to request the inclusion of specific additional automotive parts in the tariff list, and has committed to making determinations on these requests within 60 days of receipt.
For automobiles that qualify for preferential tariff treatment under the USMCA, the 25% tariff will apply only to the non-U.S. content of qualifying vehicles, calculated as the vehicle’s total value minus the verified U.S. content. Importers should be aware of strict enforcement provisions built into the Proclamation when USMCA claims are made. Importers of USMCA-qualifying vehicles must submit documentation substantiating the value of U.S. content in each model. For these purposes, U.S. content is defined as the value of parts that are wholly obtained, produced entirely, or substantially transformed in the U.S. If U.S. Customs and Border Protection (CBP) determines that the non-U.S. content of a USMCA-qualifying vehicle has been understated, the 25% tariff will be applied retroactively and prospectively to the full value of the affected model. Specifically, duties will be assessed retroactively from April 3, 2025, and will continue to apply to all subsequent imports on the same model by the same importer until corrected values are verified by CBP.
These tariffs are in addition to any other duties, fees, charges, or trade remedies (e.g., Sections 201 and 301 tariffs) applicable to such imported automobiles and automotive parts, except the reciprocal tariff framework introduced under the April 2 Executive Order, “Regulating Imports with a Reciprocal Tariff to Rectify Trade Practices that Contribute to Large and Persistent Annual United States Goods Trade Deficits,” which exempts goods covered by Section 232 tariffs from these additional “reciprocal” tariffs.
Countries Affected
The tariffs apply globally to all trading partners exporting the specified automobiles and automotive parts to the U.S., subject to the USMCA-related exemptions detailed above.
Duty Drawback and FTZs
- Any automobile or automotive part subject to the 25% tariff and admitted into a U.S. Foreign Trade Zone (FTZ) on or after the effective dates (i.e., April 3 for automobiles and no later than May 3 for automotive parts) must enter under “privileged foreign status,” unless it qualifies for domestic status (i.e., all applicable duties and taxes have already been paid upon importation). When such goods are subsequently entered for consumption from the FTZ, the applicable duty rate will be based on the Harmonized Tariff Schedule of the U.S. (HTSUS) classification and rates in effect on the date of admission to the FTZ. As a result, this requirement may diminish one of the traditional advantages of FTZ operations, which is the ability to apply the lower duty rate available at the time of withdrawal.
- Duty drawback will not be available for the 25% tariff imposed pursuant to the Proclamation.
Additional Guidance
The U.S. Department of Commerce and CBP are expected to release implementing regulations, the full HTSUS product list, and certification procedures in the coming days and weeks.
Conclusion
This alert is intended as a guide only and is not a substitute for specific legal or tax advice. Things are rapidly changing by the day and hour, and our Tariff Task Force will do its best to provide timely and relevant updates as things progress. Please don’t hesitate to reach out to us with questions.
The thrill of a band putting their own spin on a beloved song is undeniable. But even more thrilling? Telling someone a song they love is actually a cover. Today on No Infringement Intended, we look at the example of Luke Combs’ chart-topping “Fast Car”, which is actually a reimagining of Tracy Chapman’s 1988 classic.
Regardless, behind the respectful nod to re-record an iconic musical number is a complex web of copyright law. Can a band simply cover another famous song, or are there legal hurdles to overcome? The answer lies in understanding the unique rules governing musical copyrights, particularly the concept of compulsory licensing.
Click here to read the full article on IP Watchdog.
On April 4, the Texas Stock Exchange’s (TXSE) Form 1 application for registration as a national securities exchange was publicly released by the U.S. Securities and Exchange Commission (SEC). The application contains a wealth of information about the proposed new exchange, including its proposed listing rules. According to its public statements, the TXSE is the first fully integrated exchange to submit for registration in 25 years, and has garnered significant attention from financial market watchers, the business community, and its competitors. In fact, since the beginning of 2025, both the NYSE and Nasdaq have announced the creation of Texas-located markets or offices, with the NYSE moving one of its electronic exchanges to the state and Nasdaq opening a new regional headquarters in Dallas. This comes against the backdrop of an assertive campaign by the state of Texas to position itself as a rival to both New York and Delaware as the financial and corporate home for publicly traded companies. Whether these efforts will be successful remains an open question.
The publication of the TXSE’s proposed listing rules allowed the first glimpse of how the TXSE expects to operate — and how it compares to rival exchanges. Upon examining the listing rules, it is clear that the TXSE is positioning itself as a direct rival to both the New York Stock Exchange and the Nasdaq Stock Market. The TXSE’s proposed rules bear a strong similarity to Nasdaq’s on a variety of topics, including: (i) requirements to notify the exchange upon the occurrence of certain events; (ii) requirements to promptly disclose material information that would be expected to affect the value of the listed company’s securities or influence investors’ decisions; (iii) corporate governance; (iv) shareholder approval; (v) events that could cause delisting (e.g., a company’s trading prices falling below $1 per share for 30 days or it failing to file SEC reports) and (vi) the exchange’s proposed trading hours, which are stated in Eastern Time and correspond to the familiar 9:30 a.m. – 4:00 p.m. trading schedule. In fact, the TXSE’s proposed corporate governance and shareholder approval rules appear to be based, virtually verbatim in certain instances, on Nasdaq’s rules, including the latter’s recent tightening of rules relating to reverse stock splits. This may be somewhat of a surprise, as many public statements seemed to suggest that the exchange might be more lenient in this area as a result of it taking a stance opposed to environmental, social, and governance (ESG) concerns driving business decisions. However, many of the governance rules, including the requirement of listed companies to maintain standing audit committees and have independent directors oversee executive compensation, are derived from statutory requirements under the Securities Exchange Act of 1934, as amended, that apply to all exchanges. In any case, investment bankers, securities counsel, experienced corporate executives and directors, and other market practitioners will certainly find many of the proposed TXSE rules familiar. The manner in which the TXSE chooses to interpret these rules and whether it exercises discretion in a manner biased toward maintaining the listed status of companies (compared to recent trends among Nasdaq and the NYSE toward delisting underperforming companies) will only become clear after the exchange’s launch.
One area where TXSE seems not to be looking to compete with Nasdaq and the NYSE American (the NYSE’s affiliated exchange that caters to companies with smaller market capitalizations than those able to list on the “big board”) is the market for small- and micro-cap companies. The TXSE’s proposed initial and continued listing requirements for domestic (non-SPAC) corporate issuers are more stringent than those of the Nasdaq’s lowest tier, the Nasdaq Capital Market. The TXSE is also not dividing itself up into tiers — another contrast with Nasdaq. In fact, the TXSE’s initial listing criteria appear to line up most closely with the NYSE’s standards.
Attached are comparisons of the initial listing criteria for the proposed TXSE Exchange to each of the NYSE and the three tiers of Nasdaq.
Troutman Pepper Locke LLP’s Capital Markets attorneys will continue to monitor developments concerning the TXSE.