Policy Risk Monitor – February 28, 2025

A weekly news scan of key policy areas to help firms identify and monitor policy risks.

Trump Executive Orders

Trump Order Agencies to Work with DOGE on Cost-Cutting Initiatives

President Trump issued an executive order requiring all agencies to cooperate with the Department of Government Efficiency (DOGE) on various cost-cutting efforts. It requires agencies to work with DOGE to build a “centralized technological system within the agency to seamlessly record every payment issued by the agency pursuant to each of the agency’s covered contracts and grants, along with a brief, written justification for each payment submitted by the agency employee who approved the payment.” The order requires agencies to justify contracts and grants, review covered contracts and grants and the related review and approval process, and to justify non-essential travel. It also freezes agency credit cards and begins a process for selling real estate that is no longer needed.

Tax

House Passes Budget Resolution

The House of Representatives passed a Republican budget plan with $4.5 trillion in tax breaks over 10 years and $2 trillion in spending cuts. Passage of the resolution starts the process toward negotiating a tax deal by the end of the year. The Senate passed its budget resolution last week. President Trump endorsed the House’s approach to pass “one big, beautiful bill” that would include tax cuts, spending cuts, and national security spending.

Treasury Secretary and Republican Leaders to Begin Weekly Tax Cut Discussions

Treasury Secretary Scott Bessent and Republican congressional leaders will begin weekly meetings to develop a tax cut package by the end of the year. Senate Majority Leader John Thune, House Speaker Mike Johnson, House Ways and Means Chair Jason Smith, and Senate Finance Chair Mike Crapo will participate.

Trade

Trump Says Tariffs on Canada, Mexico, and China Coming March 4

President Trump said tariffs on Canadian and Mexican imports will be implemented March 4, 2025 due to the failure to limit the flow of fentanyl into the United States. “The tariffs are going forward on time, on schedule,” Trump said. Trump had stated earlier that the tariffs would take effect April 2. Trump said the additional 10% tariff on Chinese imports will take effect March 4, 2025.

Trump posted on social media that drugs from Mexico and Canada are still entering “at very high and unacceptable levels.” “We cannot allow this scourge to continue to harm the USA, and therefore, until it stops, or is seriously limited, the proposed TARIFFS scheduled to go into effect on MARCH FOURTH will, indeed, go into effect, as scheduled. China will likewise be charged an additional 10% Tariff on that date.”

Trump Tells Mexico to Implement Tariffs on China

The Trump administration told Mexico to impose tariffs on Chinese imports in a U.S. effort to limit further China’s trade in North America. Mexico is considering tariffs on Chinese imports to avoid 25% tariffs from the United States.

Trump Says He Will Announce 25% Tariffs on EU

President Trump said he will announce a 25% tariff on imports from the European Union. "We have made a decision, and we'll be announcing it very soon, and it'll be 25% generally speaking, and that'll be on cars, and all of the things," Trump said.

EU Threatens Retaliation if U.S. Imposes Tariffs on Steel and Aluminum

The EU threatened retaliation against the United States if the Trump administration impose tariffs on all steel and aluminum imports. The bloc is broadening the list of U.S. goods it will target with retaliatory tariffs if the United States imposes tariffs on steel and aluminum exports, Bloomberg reported.

Europe Says it Will Respond to Any “Unjustified” U.S. Measures Against Technology Rules

The European Commission said it would respond “swiftly and decisively” if President Donald Trump takes any “unjustified measures” against the EU over its rules on technology companies. Trump earlier stated in a memo that he is considering tariffs on countries that impose digital services taxes on U.S. technology firms.

Senate Confirms Greer as USTR

The Senate confirmed Jamieson Greer to be U.S. Trade Representative. Greer served in Trump’s first term as chief of staff to USTR Robert Lighthizer.

USTR Proposes $1.5 million Fee for Chinese Entry into U.S. Ports

The office of the U.S. Trade Representative proposed a port-entry fee of up to $1.5 million for Chinese-built vessels. The proposed fee is part of the USTR’s investigation into China's domination of the global shipbuilding, maritime, and logistics sectors. USTR will hold a public hearing about the proposed actions on March 24, 2025. Analysts warned that the fees would likely have significant and widespread economic impacts.

Trump Orders Tariff Investigation into Copper

President Trump directed Secretary of Commerce Howard Lutnick to investigate the need for possible tariffs on copper for national security purposes. Trump ordered the investigation under Section 232 of the Trade Expansion Act of 1962, which he also used to impose tariffs on steel and aluminum during his first term. “Like our steel and aluminum industries, our great American copper industry has been decimated by global actors attacking our domestic production,” Lutnick said in a statement. “To build back our copper industry, I will investigate the imposition of possible tariffs. Tariffs can help build back our American copper industry if necessary and strengthen our national defense.” Trump ordered the investigation under

U.S.-China

U.S. Developing Tougher Semiconductor Restrictions

The Trump administration is developing tougher restrictions on U.S. semiconductor exports, Bloomberg reported. The administration is also pressuring allies to toughen their restrictions on Chinese semiconductors. The moves are part of a U.S. expansion of efforts to limit China’s technological influence.

Geopolitics

Ukraine Agrees to Minerals Deal with U.S.

Ukraine agreed to jointly develop its natural resources with the United States. Ukraine’s President Volodymyr Zelenskyy rejected a proposal last week from Secretary of the Treasury Scott Bessent, stating that the agreement was not in Ukraine’s best interest. The deal would have given the United States 50% ownership of the rights to Ukraine’s rare earth and critical minerals in exchange for past military assistance. The current agreement drops the U.S. demand for the right to $500 billion in potential revenue from the minerals development. Bessent, writing in the Financial Times, argued that an economic partnership would benefit both countries.

U.S. Imposes New Sanctions on Oil Shipments from Iran

The United States imposed new sanctions on Iran's oil industry, targeting more than 30 brokers, tanker operators, and shipping companies for selling and transporting oil from Iran, Reuters reported. Trump wants to eliminate Iran's oil exports, which are a top source of government revenue.

Energy and Climate

Congress Votes to Repeal Methane Fee on Oil and Gas Producers

Both the House and Senate passed resolutions under the Congressional Review Act to repeal a Biden administration fee on oil and gas producers for methane emissions. President Trump will likely sign the resolution.

EU to Fund Clean Manufacturing

The EU will create an Industrial Decarbonization Bank with €100 billion ($105 billion) in funding to support clean manufacturing. The EU Clean Industrial Deal will support energy-hungry industries that face “high energy costs, unfair global competition and complex regulations.”