Industrials Regulatory News and Trends - May 16, 2025
Welcome to Industrials Regulatory News and Trends. In this regular bulletin, DLA Piper lawyers provide concise updates on key developments in the industrials sector to help you navigate the ever-changing business, legal, and regulatory landscape.
DOD proposes that US Army be granted the “right to repair” in defense contracts. The Defense Department has announced that, in a major policy change, it now wants all new and existing defense contracts to give the Army the right to repair its own weapons and equipment. The move is set out in an April 30 memo signed by Secretary of Defense Pete Hegseth which addresses his Army Transformation Initiative, a broad strategy to “build a leaner, more lethal force” and “accelerate delivery of war winning capabilities” by improving weaponry, eliminating wasteful programs and outdated equipment, and both modernizing and reducing the workforce. In the memo, Hegseth calls on the Army to “Identify and propose contract modifications for right to repair provisions where intellectual property constraints limit the Army's ability to conduct maintenance and access the appropriate maintenance tools, software, and technical data – while preserving the intellectual capital of American industry” and to “seek to include right to repair provisions in all existing contracts and also ensure these provisions are included in all new contracts.”
Trump says 10 percent is a baseline for future tariff agreements. On May 8, President Donald Trump said that, going forward, 10 percent will be the floor for his tariffs on imports from other countries that seek to reach trade agreements with the United States. “Some will be much higher because they have massive trade surpluses and in many cases they didn’t treat us right,” Trump told reporters at the White House. Trump’s comment came as he discussed a recently signed trade agreement with the United Kingdom. "The president is determined to continue with that 10 percent baseline tariff. I just spoke to him about it earlier," White House spokeswoman Karoline Leavitt told a press briefing.
Auto industry group criticizes Trump trade deal with the UK. On May 9, an industry group representing the major US-based automobile manufacturers criticized President Donald Trump's just-announced trade deal with the United Kingdom, saying that the deal would harm the US auto sector. Under the trade deal, British automakers will be given a quota of 100,000 cars a year that may be imported to the United States at a 10 percent tariff rate, compared to a 25 percent rate for Mexico, Canada, and nearly all other countries. 100,000 cars is nearly the total volume of cars that Britain exported to the US last year. “Under this deal, it will now be cheaper to import a UK vehicle with very little U.S. content than a USMCA compliant vehicle from Mexico or Canada that is half American parts," the American Automotive Policy Council, which represents the Detroit Three automakers, said.
GM: Tariffs won’t affect Cadillac’s Formula One plans. On May 3, General Motors President Mark Reuss said that reduced profit expectations and a potential $5 billion profit reduction from automotive tariffs will not affect Cadillac's Formula One debut in the 2026 racing season. GM, Cadillac’s parent company, recently cut its 2025 profit forecast because of uncertainty over the effects of US import tariffs introduced this year. The company plans to move away from Ferrari engines in favor of its own power units to compete in Formula One races, starting in 2029.
Organizations urge repeal of Chemical Excise Tax. On April 25, 15 consumer, free-market, and taxpayer organizations called on key members of Congress to repeal the Chemical Excise Tax. The group, including such organization as Heritage Action for America, the Competitive Enterprise Institute, and the National Taxpayers Union, said that the tax, created under the Infrastructure Investment and Jobs Act of 2021, was “an economic debacle that now jeopardizes numerous policy goals of this Congress and the Trump Administration.” Earlier this year, an array of business coalitions, such as the American Chemistry Council and the National Association of Manufacturers, also called for repeal of the measure, which imposes excise taxes on 42 chemicals, critical minerals, and metallic elements commonly used in manufacturing. Monies from the Chemical Excise Tax support cleanup of toxic waste sites nationwide.
IRS calls for comment on adding 9 chemicals to the Chemical Excise Tax list. Then, on May 5, the Internal Revenue Service announced it is seeking comments on proposals to add nine chemicals to the list of substances taxable under the Chemical Excise Tax. ExxonMobil had requested the addition of eight of those chemicals – such as bromobutyl isobutylene isoprene rubber, chlorobutyl isobutylene isoprene rubber, and neo pentanoic acid – to the list. Comments on these proposed additions are due to the IRS on July12.
Commerce Department opens probe regarding aircraft and jet engine imports. On May 9, the Department of Commerce’s Bureau of Industry and Security (BIS) announced that Commerce Secretary Howard Lutnick had opened an investigation into imported commercial aircraft, jet engines, and parts under Section 232 of the Trade Expansion Act of 1962. The Section 232 probe, which was opened on May 1 but not publicly disclosed previously, seeks to determine whether such imports affect the country’s national security and could be used as a basis for imposing further tariffs. Several airlines reportedly said they were unaware of the probe before it was disclosed in the media. The department said that it is seeking public comment on a series of questions including “the impact of foreign government subsidies and predatory trade practices on the competitiveness of the commercial aircraft and jet engine industry.” Under Section 232, the President has the authority to adjust imports coming into the United States should they be determined to threaten national security.
Texas Senate passes bill targeting renewable energy. On May 8, the Texas Senate approved a bill that would require all renewable-energy projects in the state, even existing ones, to buy backup power at night, largely from coal or gas plants. The Texas Association of Business estimates that the legislation, if passed, would cost the state $5.2 billion more per year and would add an estimated $225 to each individual consumer’s power bill. The measure’s fate now rests with the Texas House of Representatives. Consumption of electric power in Texas is expected to nearly double by the end of the decade, and virtually all new power generated in the past five years has come from renewables, which take about half the time of gas plants to be added to the grid.
Texas House aims to set new safety standards for chemical container storage facilities. The Texas House of Representatives has passed HB 3866, a measure that would set new safety standards for large-scale facilities that collect and recondition chemical containers, forbidding them from operating within 2,000 feet of existing private homes. The bill, with broad bipartisan support, is a response to the July 2024 Permian Basin Container fire in northern Ector County, Texas, in which a chemical storage facility that had recently begun operating in an extant residential neighborhood caught fire, burning on and off for months. Residents of the neighborhood filed suit against Permian Basin Container in August 2024. In September 2024, Ector County issued a disaster declaration for the Permian Basin Containers site. HB 3866 now heads to the state Senate.
Major layoffs at NREL. During the week of May 5, 114 employees at the National Renewable Energy Laboratory (NREL) were involuntarily laid off. Both researchers and operations staff were cut from the lab, the Department of Energy’s primary research facility for renewable energy systems. By mid-April, about 4,000 DOE employees had opted to accept the Trump Administration’s resignation buyout offers, a number that is expected to grow in the coming days. Forecasting even deeper job cuts, Energy Secretary Chris Wright told department employees via email in April that "it is increasingly likely that our department will undergo a wide-ranging RIF [reduction in force] to align with broader strategic priorities outlined by President Trump."
$7.9B in clean energy investments abandoned so far this year. E2, a national nonpartisan group of business leaders, investors, and professionals, reports that in the first three months of this year, $7.9 billion in investments in clean-energy projects - including 16 large-scale factories and other projects - has been cancelled, closed, or downsized. The E2 report ascribes the cancellation of such projects to escalating market concerns arising from Trump Administration policies and the uncertain future of critical clean energy tax credits. Among the cancelled projects are a $200 million hydrogen fuel cell factory in South Carolina and a $2.5 billion battery factory in Georgia. E2 observed, “Republican congressional districts, which have benefitted the most from the Biden-era clean energy tax credits, also are seeing the most cancellations.”
