Tariffs, SEC and China Moves

This month, we cover a new round of global tariffs affecting dozens of trading partners, additional duties on Canada and Brazil, SEC proposals on electronic delivery and activist investor disclosure, an accelerated DOJ merger review process and new congressional pressure to restrict Chinese companies’ access to U.S. capital markets. Get the insights and analysis about developments in Washington that could have an immediate and long-term impact on your business.

Tariffs & Trade

• New Global Tariffs Announced – The U.S. will impose tariffs ranging from 10% to 12.5% on its major trading partners as part of a new set of duties that the Trump Administration said are designed to combat forced labor. The new duties, announced by the U.S. Trade Representative (USTR), target 60 economies, or more than 80 countries, that USTR said represent about 99.4% of U.S. trade. Countries that have laws on the books to combat forced labor were given a 10% tariff, while those without such statutes were given a 12.5% tariff. The new levies are based on a frequently used section of trade law – Section 301 of the Trade Act of 1974 – that is considered more legally durable than the basis for the tariffs the Supreme Court struck down. Once in place, the levies can remain indefinitely and be unilaterally altered by the president. The new tariffs will not stack on top of existing import taxes on steel and aluminum, known as Section 232 duties, that the President imposed last year on national security grounds.

• Trump Imposes More New Tariffs on Canada – President Trump imposed an additional 50% tariff on certain goods from Canada, including wine, hockey sticks and cement. The White House said that the tariffs were a response to the country’s “discriminatory treatment of American products.” Some sectors and goods, including energy, potash and fish or critical minerals, will be exempt from the new tariffs, which will take effect 30 days after they are signed and affect about $20 billion worth of Canadian goods. These tariffs are being done under Section 338 (which had never been used for tariffs), which gives the President the power to impose tariffs of up to 50% on the goods of countries found to be discriminating against the U.S.
  • Canadian Prime Minister Mark Carney subsequently said he and President Trump have agreed to accelerate trade talks in an effort to resolve friction and avoid a new 50% U.S. tariff on a series of goods. The talks are scheduled to begin on August 19.

• Brazil Hit with New Tariffs – A new 25% U.S. tariff will hit ​a range of Brazilian goods, including farm machinery, wood products, ethanol, and apparel. The new Section 301 tariff threatens between $7 ​billion and $11 billion of Brazilian exports to the U.S., according to estimates from Brazil’s government and National Confederation of Industry (CNI), respectively. That amounts to roughly 18% ​to 26% of Brazil’s exports to the U.S. To soften the domestic effect of the tariffs, the U.S. exempted several key imports, ⁠including beef, coffee, aircraft and plane parts.

• Generic Drug Makers Could Face Heightened Tariffs – Makers of generic pharmaceuticals must onshore their manufacturing to the U.S. within two years or face a 100 percent tariff starting in 2028, President Trump wrote on Truth Social. It would go up to 200 percent in 2029.

SEC

• Update on Move Away from Quarterly Reporting – The SEC is expected to move forward with a version of its proposal to make quarterly financial reporting optional, despite being inundated with public comments – more than 200,00 in all – that overwhelmingly oppose the idea. At least 20,000 of the comments echoed an anonymous grassroots campaign that urges keeping reporting quarterly. Another 40,000 or so said something along the lines of how the proposal “prevents investors like me from accessing information about companies; lets companies hide behind closed doors; and allows fraud to fester.”

Justice Department

• Antitrust Merger Review Accelerated – Merging companies will get a shortcut to ending antitrust investigations under a Justice Department change meant to make the government review process less burdensome for businesses. In its release, the Department said that it has returned to implementing targeted Second Request investigations to expedite merger review and published a model timing agreement. The net result is that while antitrust enforcers won’t use the targeted approach in every case, the process will allow some deals to clear federal scrutiny earlier.

• New Pipeline for Whistleblowers – The Justice Department is developing a new pipeline for tips on potential fraud cases: data sleuths, including those who use AI in their efforts. As department lawyers look to file more civil charges under the False Claims Act (FCA), which is fraud committed against the government, they are looking to include those who believe they have identified wrongdoing via inspecting government spending data. The Civil Division launched an initiative to encourage more high-quality tips from data miners. The number of FCA tips filed with the department has skyrocketed recently, from 980 in fiscal year 2024 to nearly 1,300 the next fiscal year, with data miners accounting for more than 45% of filings since fiscal 2024, according to an agency report. 

Treasury Department

China

• SEC Asked to Restrict Access to U.S. Capital Markets for Some Chinese Companies – Chairman John Moolenaar (R-Mich.) of the Select Committee on China and Sen. Rick Scott (R-Fla.) sent a letter to SEC Chairman Paul Atkins requesting the agency consider restricting access to U.S. capital markets for Chinese companies listed (the 1260H list) by the Pentagon.