The Law and Other Anomalies

One of President Trump’s first actions in office was to issue executive orders:

banning hiring discrimination, which was deemed to include many then-extant DEI programs, and to terminate all DEI and environmental justice programs, for contractors or grantees of federal funds; and

requiring all Federal contractors and grant recipients to certify that they do not operate any programs promoting DEI that violate Federal anti-discrimination law.

Almost immediately a Federal judge issued a preliminary injunction preventing, in effect, enforcement of the key provisions of the Executive Orders.  DEI was under attack, but the risk of incurring treble damages and penalties for violation did not exist during the injunctive period.

Last Friday, the Fourth Circuit Court of Appeals struck down the injunction, thus making active and effective the provisions banning DEI programs and requiring certification that no DEI programs were in force.

The Federal Government  has a fraud initiative to assess damages and penalties against any recipient of Federal funds that violates federal civil right laws, which now bar an unclear range of DEI programs but surely prohibit racially based programs.  This suggests that holders of government contracts or grants need to audit their DEI practices.  But further, the Executive Orders ban such DEI programs generally, in the marketplace.  It is quite likely that the sheer existence of such programs will result in suit by the US Attorney General even in contracts not involving the government.

And as noted in my firm’s Alert on this subject there is lack of clarity as to what is in fact permissible in a hiring policy; see http://www.duanemorris.com and click Alerts.  It is likely now a good time to offer the self-serving suggestion that legal counsel may be helpful in navigating this dangerous area.

Tariffs are in the news for obvious reasons, and below presents a brief overview.

On Inauguration Day the President issued his America First general trade policy statement.  On February 21 he issued his Memorandum of an American First Investment Policy. Tariffs arise under these policies and under various specific laws, are impacted by trade deals and agreements, and import and export controls.

[Separately but reflecting the same “America First” bias, certain increased restrictions now exist on inbound investment under the so-called CFIUS regimen and outbound limitations under the COINS Act and the BIOSECURE Act.  A full summary would far exceed the scope of this post, but may be addressed in another post in the future.]

Tariffs set on Chinese imports, at this moment set at 10%, have been as high as 20% for much of 2025; special tariffs for Canada (now at 35% except for energy and potash) and Mexico (presently 25% except for potash) are somewhat mitigated by the US Mexico Canada Act for certain compliant products.  (Note also that the President, speaking January 14, 2026 at a Ford plant, asserted that the USMCA was “irrelevant” to the United States.)

Another class of tariffs aimed at tariff reciprocity with certain other countries, were addressed in Executive Order 14527 issued April 2, 2025, and rates thereunder were adjusted by Executive Order 14326, July 31, 2025, from 10% to 41%.

Across the board, exemptions from all tariffs for low value imports have been eliminated: for China in May of 2025, for all other countries in August of last year.

Although subject to ongoing challenge, under the general tariff laws some countries have been targeted with specific tariffs on select goods (Brazil at 40% for most goods; India at 25%).

At present there are special tariffs as high as 50% on imports of steel and aluminum (with specific impact on auto imports), copper, timber, semiconductors and some materials; current investigations are ongoing as to pharma, aircraft, silicone, unmanned aircraft, wind turbines, certain robotics and medical equipment.  Further, there are pending programs looking to higher tariffs in 2027 on Chinese semiconductors, Chinese shipping, Nicaraguan labor rights, Brazilian trade practices (ongoing), and international seafood.

The list of specific country-wide trade deals announced last year includes fifteen countries and the EU.

Federal agencies policing fair trade (US Customs Border Protection and Department of Justice) have beefed up their enforcement, have formed a Trade Fraud Task Force and are using the False Claims Act to encourage whistleblower actions.  Other initiatives are extensive and granular, relating to new rules or bans on certain territories, specific Russian companies (oil), supply chains, a National Defense Strategy to support the US Homeland and its critical interests in the Western Hemisphere.

Foregoing is my best understanding as of today.  I urge readers to be alert to the lay of the land, but do NOT rely on specific tariff provisions of today to remain accurate  in the future.  Businesses need to engage tariff advisers or law firms to determine daily specifics and to identify longer-term trade strategies.

[It has been two months since my last post; not that things of interest did not occur, but rather the pace of business, my publication of another book (my eleventh, written with my son Peter, entitled Honig & Son, is available on Amazon) and a birthday vacation to San Juan all conspired to secure my silence.]

Note first that the SEC now has only one Democratic Commission member which means, conversely, that the Republicans are fully in charge.  It is no secret that the tendency of the current Republican consensus is to regulate business less.  Consistent with this tendency, the SEC announced yesterday that it would no longer review requests from public companies relating to their proposed refusal to bring shareholder resolutions to a vote.  In the past, companies typically requested assurance, based on stated facts, that the refusal to bring nonbinding policy matters to a vote (usually involving social issues, the environment or the like) would not run afoul of SEC action.

The effect is that companies will be free to proceed without checking with the SEC– that was always the case, but readers of the tea leaves see this announced policy a evidence of a permissiveness by the SEC and a willingness to rely on corporate judgment.

There is a caveat suggesting questions under Delaware law touching on nonbinding proposals may be answered by the SEC, but that if a reporting company gets a legal opinion that the proposal is not “proper” under Delaware law then that judgment will prevail.  If you find the Delaware situation a bit confusing, you likely are correct.

Needless to say, the sole Democratic SEC commissioner stated yesterday that  this policy was “an act of hostility toward shareholders.”  The historic tension between Republicans and Democrats on the SEC Commission continues unabated, and since the President controls appointments the general views of the administration in power continues to filter down to SEC policy.