Industrials Regulatory News and Trends - June 13, 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.

Rare earth magnet shortage. In an apparent breakthrough, Chinese officials have reportedly granted rare earth magnet export licenses to some suppliers of US automakers Ford, GM, and Stellantis. Such magnets are essential to an array of products, ranging from electronics and HVAC systems to medical devices and fighter jets. In automaking, they are used in such parts as sensors, windshield wipers, transmissions, seat belts, anti-lock braking systems, entertainment systems, cameras, and power steering. China overwhelmingly dominates the global production of rare earth magnets; Reuters reports that Chinese export curbs imposed in early April have resulted in drastic shortages for US manufacturers. In recent days, suppliers for US automakers have been warning that without fresh supplies, their factories could be forced to close in the next few weeks. On May 29, Ford announced that it is pausing production of Explorer SUVs at its Illinois plant as a result of the magnet shortage. Notably, media reports note that to date China has only granted a few rare earth magnet export licenses since it imposed the export ban.

Trump Administration continues tariff-driven trade policy despite legal challenges. While litigation over tariffs imposed by President Donald Trump under the authority of the International Emergency Economic Powers Act (IEEPA) continues to advance, the President has issued a proclamation increasing existing tariffs on steel, aluminum, and certain steel and aluminum derivative products. Our alert discusses how these developments affect the trade landscape and what companies may keep in mind.

Survey: Most manufacturers are passing tariff costs on to their customers. A study released early this month by the New York Federal Reserve has found that most companies are raising consumer prices in response to the broad array of new tariffs imposed by President Trump. The Fed study of company actions in May concluded that about 77 percent of service firms and about 75 percent of manufacturers it surveyed have passed at least some of the price increases to clients. In fact, the study said, more than 35 percent of manufacturers and nearly 40 percent of service firms raised their prices within a week of seeing tariff-related cost increases. Further, a “significant share” of companies the Fed surveyed reported that they had increased the prices of products not impacted by the new tariffs. For instance, the report stated, ““A heavy construction equipment supplier said they raised prices on goods unaffected by tariffs to enjoy the extra margin before tariffs increased their costs.”

Maritime shipping of cars declines. The volume of automobiles being shipped to the US via ocean shipping has precipitously dropped as a result of Trump Administration tariffs, reports Automotive News. The publication reports a 72.3 percent drop in maritime import volume for motor vehicles entering the US in May 2025 compared to the same period in 2024, stating, “The 25 percent auto tariffs that took effect in April may have prompted companies shipping completed automobiles overseas to hold off.” The statistics for the Automotive News reporting were provided by the trade database Descartes Datamyne, which maintains a database of import-export trade of 50 countries across five continents. In its coverage of this story, Kelly Blue Book commented, “Automakers can afford to slow down the rate of imports. Most of their dealers still have cars for sale that they imported at pre-tariff prices.”

GM CEO says company is taking steps to do more manufacturing in the US. On May 28, General Motors CEO Mary Barra said the company is continuing to take steps to bring more of its manufacturing and supply chain back to the United States. In the last five years, Barra said, the company has responded to the COVID-19 pandemic and the global semiconductor shortage by moving more of its manufacturing operations to the US. It is working to leverage some excess capacity that it has on US shores, she continued, including through an $888 million investment at a New York propulsion plant to manufacture a next-generation V-8 engine. Fewer than three percent of the automaker's “direct parts” now come from China, she said. “There’s still more deals to do, so we're waiting for that,” she added. “But there are certain moves that we're already making to strengthen our North American manufacturing, because we can do that with the clarity we already have.”

NHTSA issues interpretive rule on CAFE standards. On June 6, the National Highway Traffic Safety Administration issued an interpretive rule which asserts that current Corporate Average Fuel Economy (CAFE) standards erroneously considered electric vehicles in setting vehicle fuel efficiency standards. The new ruling states that NHTSA “is issuing this interpretation as the foundation for resetting its Corporate Average Fuel Economy (CAFE) and medium- and heavy-duty fuel efficiency (MDHD) programs.” Commenting on the rule, Transportation Secretary Sean Duffy stated that the Biden Administration had “illegally used” CAFE standards “as an electric vehicle mandate.” The interpretive rule would not directly affect EPA’s vehicle tailpipe standards, but those are currently under attack in the courts and may be modified through the FY 2026 budget process via the reconciliation bills currently pending in the US House and Senate.

Energy Department proposes cancellation of decarbonization projects, an end to OCED. On May 30, the US Department of Energy, in a budget request, proposed canceling billions of dollars in awards granted in 2024 to reduce industrial carbon emissions in the US. The proposed budget would also eliminate all funding for the Office of Clean Energy Demonstrations, which partners with the private sector to accelerate deployment and market adoption of clean energy technologies, and would drastically slash funding for other DOE offices that work to advance energy technologies. Among the projects losing their grants are a polyethylene terephthalate recycling plant to be built in Longview, Texas and a low-carbon cement manufacturing plant to be built in Holyoke, Massachusetts. A total of 24 awards are reportedly being cancelled.

DOGE to review unclassified defense contracts. In a move that may affect thousands of defense contractors, Defense Secretary Pete Hegseth recently issued a memorandum stating that the Department of Government Efficiency (DOGE) will be allowed to assess nearly all unclassified defense contracts before they are awarded. DOGE will have “the opportunity for review of the Performance Work Statement/Statement of Work, accompanying estimates, deliverable descriptions, and requirements approval/validation documents.” Further, “procurement actions already in process… shall also be made available for review.” This authority will initially apply to communications and utilities contracts with DOD, as well as advisory, IT, and professional support services.

US government announces intent to fund nuclear energy projects. The Trump Administration recently issued four Executive Orders focused on nuclear technologies that, collectively, aim to “unleash the domestic nuclear base,” “reestablish the United States as the global leader in nuclear energy,” and “bring advanced nuclear technologies into domestic production as soon as possible.” In addition to streamlining regulatory requirements and environmental reviews, the EOs discuss a number of funding opportunities for companies performing work in the nuclear energy sector, including through procurement contracts, grants, pilot programs, and loans. This alert provides an overview of the ways companies may pursue those opportunities.