Legislative Update: Trade Court Halts Trump’s Tariff Orders, Administration Plans Appeal

Trade Court Halts Trump’s Tariff Orders, Administration Plans Appeal

The U.S. Court of International Trade (CIT) on May 28  blocked President Donald Trump’s attempt to impose sweeping tariffs under the International Emergency Economic Powers Act (IEEPA), ruling that his actions exceeded the statutory authority granted by Congress. The Court found that the IEEPA does not permit the imposition of unlimited tariffs on imports from nearly every country, stating that such a broad delegation of power would constitute an improper transfer of legislative authority to the executive branch. The court invalidated both the global and retaliatory tariffs issued via executive order, as well as a series of so-called “trafficking tariffs” targeting specific countries, including China, Mexico, and Canada.  Notably, existing and potential Section 232 tariffs and Section 301 tariffs are not affected by this judgment.  The CIT’s judgment gives the government 10 days to implement the order.

In its 49-page decision, the three-judge panel concluded that the emergency declarations used to justify the tariffs were unsupported and failed to address the specific threats cited in the orders. The ruling emphasized that trade imbalances are not valid grounds for invoking emergency powers under IEEPA. The decision came in response to two lawsuits—one brought by a coalition of states arguing that the statute was never intended to authorize tariffs, and another by affected businesses describing the tariffs as an unlawful “power grab.”

Despite the ruling, the White House quickly filed an appeal that might send the case up to the Supreme Court. The judgment casts uncertainty over Trump’s economic agenda and broader trade strategy, which relies on using tariffs as leverage to negotiate trade agreements with other countries, as well as its implementation and support in Congress.   The administration may choose to ramp up or accelerate tariffs under other statutes to blunt the impact of this order, such as under Section 232 and Section 301.

House Budget Reconciliation Bill Passes With Major Rollback of IRA Clean Energy Credits

The U.S. House of Representatives narrowly passed a revised budget reconciliation package (H.R. 1) on May 22 by a 215–214 vote, which would significantly scale back or eliminate most of the Inflation Reduction Act’s (IRA) clean energy tax credits. The bill included substantial new provisions, including language to accelerate the phaseout of clean electricity tax credits by ending eligibility for projects placed in service after 2028 or started more than 60 days after enactment.  In addition to scaling back tax incentives, the legislation seeks to repeal climate-related grants at the EPA and other agencies, as well as rescind vehicle emissions standards set by the EPA and the Department of Transportation.

The House-passed bill also includes targeted reforms to the federal permitting process, primarily benefiting fossil fuel infrastructure, while broader bipartisan permitting reform—especially for clean energy—remains unresolved. The legislation introduces an opt-in system allowing project sponsors to pay a fee equal to 125% of environmental review costs in exchange for expedited review under the National Environmental Policy Act (NEPA). It sets ambitious timelines of six months for environmental assessments and one year for environmental impact statements, both of which would be shielded from judicial review. The Congressional Budget Office projects that the changes would accelerate projects by approximately two years and increase federal revenue by $1.2 billion over the next decade.

The measure amends the Natural Gas Act to provide fast-tracked reviews for liquefied natural gas (LNG) projects for a fee capped at 1% of project costs or $10 million. Similar language originally intended to extend this system to carbon dioxide, oil, and hydrogen pipelines was removed before final passage due to concerns over reconciliation rules and bipartisan resistance, particularly in certain districts regarding hydrogen and CO₂ pipelines. Republicans also stripped a provision added during the amendment process that would have allowed the sale of certain public lands in Utah and Nevada, as well as a provision requiring additional Arctic drilling in the National Petroleum Reserve in Alaska.

The House was able to advance the bill following negotiations led by President Donald Trump, Speaker Mike Johnson (R-LA), and senior White House officials, with several Republicans holdouts looking for carveouts or other changes to provisions, such as the state and local tax (SALT) deduction cap and proposed Medicaid reforms. The legislation now moves to the Senate, where Republican senators broadly agree that significant revisions are necessary to various provisions passed by the House, including concerns among several Senators about the extent of clean energy tax credit repeals.  Several of the House rollbacks may also not withstand Senate procedural rules governing reconciliation bills.

Senate Majority Leader John Thune has set an ambitious goal of sending the bill to the President’s desk by the July 4 recess. This timeline is intended not only to expedite legislative action but also to shield members from political fallout during the recess, particularly from town halls or Democratic campaign efforts aimed at discrediting the bill. The urgency is further underscored by the bill’s role as the vehicle for raising the federal debt ceiling, with the government projected to exhaust its borrowing authority by August.

Rather than restarting the process with new committee markups, the Senate is expected to expedite the process by instead directly amending the House-passed reconciliation package and then entering bicameral negotiations to reconcile differences. Thune has not yet confirmed this is the path he will take and will likely make the decision based on whether holding a Finance Committee markup is needed to help align some of the fiscal hawks in the Caucus who are demanding additional spending cuts.  Under reconciliation rules, the bill can pass the Senate with a simple majority.

Challenge to EPA’s Chemical Frameworks Gains Traction Ahead of Trump Rewrite 

A Texas-based non-profit, the Center for Environmental Accountability (CEA), has petitioned the Environmental Protection Agency (EPA) to overhaul the Biden administration’s 2024 “framework” rule governing chemical evaluations under the Toxic Substances Control Act (TSCA). CEA, led by a former Justice Department official and former staffer for Sen. Mike Lee (R-UT), filed the petition on May 15, arguing that the rule is overly broad, legally flawed, and results in unnecessarily strict evaluations. The petition specifically calls for eliminating the Biden EPA’s “whole chemical” approach, redefining “unreasonable risk,” clarifying “conditions of use,” incorporating existing regulatory requirements, and establishing a de minimis threshold. According to CEA, the current framework undermines statutory deadlines, scientific transparency, and efficiency, while forcing industry to abandon beneficial chemicals without sufficient justification. EPA is required to respond to the May 15 petition by August 13, in accordance with TSCA’s 90-day response timeline.

The petition comes ahead of the Trump administration’s anticipated proposal to revise the framework rule in June, aligning with earlier comments by U.S. Court of Appeals for the D.C. Circuit. That court is overseeing ongoing litigation challenging the Biden-era rule, which replaced a narrower 2017 framework issued by the first Trump EPA following Congress’ 2016 TSCA amendments. EPA’s acting chemicals chief, Nancy Beck, submitted declarations pledging to rewrite the rule, which prompted the court to place the case in abeyance rather than proceed with oral arguments. While the court denied EPA’s request for a full remand, the pause effectively suspends the litigation while the agency develops its proposed revisions.

Beck has identified several key provisions under reconsideration. These include replacing the “whole chemical” approach with use-specific risk determinations, reevaluating how workers’ use of personal protective equipment (PPE) is factored into risk assessments, and reconsidering the inclusion of overburdened communities in evaluations. Additionally, Beck indicated the rewrite would explore broader procedural changes not directly related to ongoing litigation, such as clarifying how workplace safety standards are incorporated, setting rules for manufacturer-requested evaluations, and defining when EPA can re-evaluate previous risk determinations.

Senate Democrats Cautious on GOP-Led TSCA Reform Efforts

Senate Environment and Public Works (EPW) Committee Democrats are taking a cautious approach toward industry-backed efforts to revise the TSCA, even as Republicans seek bipartisan support for targeted changes to the law ahead of the 2026 expiration of its user fee authorization. While Republican staff have expressed optimism—particularly regarding reforms to Section 5, which governs pre-market reviews for new chemicals—Democratic senators, including EPW Ranking Member Sheldon Whitehouse (D-RI) and Sen. Ed Markey (D-MA), remain noncommittal and characterized discussions as “preliminary.” Markey, a key architect of the 2016 TSCA overhaul, appeared unaware of the current reform efforts when asked directly.

Republican leaders, including EPW Chair Shelley Moore Capito (R-WV) and her staff, are hopeful that bipartisan negotiations can yield changes that would streamline new chemical approvals and offer greater regulatory certainty for industry. However, any statutory revisions will require 60 votes in the Senate, making Democratic cooperation essential. The push for reform is closely tied to the reauthorization of TSCA’s user-fee provisions, which industry groups view as a strategic opportunity to advance broader, industry-friendly amendments to the 2016 law while Republicans hold congressional majorities and the presidency.

During a May 14 committee hearing, Whitehouse outlined bipartisan legislative goals focused on water resources development, transportation infrastructure, and Superfund permitting policy—but notably did not include TSCA among them.  Reforms also face an uphill battle due to the unfamiliarity of many members with the 2016 statute, which complicates efforts to craft revisions.

EPA to Use AI to Clear TSCA Chemical Review Backlog Zeldin Says  

EPA Administrator Lee Zeldin announced that the agency’s Office of Chemical Safety and Pollution Prevention (OCSPP) will deploy artificial intelligence (AI) to address long-standing backlogs in approving new chemicals under the Toxic Substances Control Act (TSCA). Speaking before the House Energy and Commerce Committee, Zeldin attributed delays to outdated technology and outlined a two-pronged strategy: integrating AI tools and reassigning scientific personnel from the Office of Research and Development (ORD) to bolster review capacity. He expressed confidence that combining expanded staffing with emerging technologies would enable EPA to meet TSCA’s statutory deadlines. The initiative aligns with the Trump EPA’s broader reorganization plan to modernize agency operations and expand the use of computational tools, including AI, to streamline regulatory processes.

CEQ Eliminates Climate, Justice Directives in Environmental Reviews

The Trump administration has officially rescinded Biden-era interim guidance requiring federal agencies to consider climate change and environmental justice in environmental reviews under the National Environmental Policy Act (NEPA). The White House’s Council on Environmental Quality (CEQ) published a notice on May 28 stating the guidance—originally issued in 2023—was inconsistent with President Trump’s January executive order aimed at accelerating domestic energy development. The move is part of a broader administration effort to streamline NEPA reviews, with agencies such as the Interior Department already implementing drastically shortened review timelines for energy projects.

Congress Overturns Biden-Era Rule on Industrial Air Emissions

Just before adjourning for the Memorial Day recess, the House passed legislation (S. J. Res. 31) repealing a Biden-era Environmental Protection Agency (EPA) rule that imposed strict limits on seven hazardous air pollutants—including mercury, lead, and PCBs—emitted by chemical plants, oil refineries, and other industrial facilities. The resolution, passed narrowly in a 216–212 vote on May 22, had already cleared the Senate on May 1 and now awaits President Trump’s signature. Sponsored by Sen. John Curtis (R-UT) under the Congressional Review Act (CRA), the measure targets EPA regulations issued in September 2023 that required facilities to maintain their classification as major sources of pollution, even after emissions had been significantly reduced.

Supporters of the repeal, primarily Republicans, argued that the rule imposed unnecessary regulatory burdens and failed to reward facilities for investing in cleaner technologies. Rep. Randy Weber (R-TX) criticized the “once in, always in” standard, stating that it discourages innovation by locking facilities into stricter classifications regardless of improvements. Rep. Rick Allen (R-GA) emphasized that the resolution simply reinstates more flexible Trump-era guidelines, allowing facilities to move to a less burdensome regulatory category under the Clean Air Act if emissions fall below certain thresholds.

EPA to Repeal Power Plan Emissions Rule from Biden-Era Climate Agenda  

The U.S. Environmental Protection Agency (EPA) is preparing to repeal a key element of the Biden administration’s climate agenda by rescinding greenhouse gas emissions standards for fossil fuel-fired power plants, according to a report by The New York Times. The EPA confirmed the move on May 24, following reports that a draft proposal had been submitted to the White House Office of Management and Budget for review earlier in the month. While the proposal has not yet been made public, the agency stated that it is in the process of reconsidering the rule due to widespread concerns that it was overly restrictive and could threaten the affordability and reliability of the U.S. power grid. The EPA’s statement emphasized that the finalized proposal will be published after completing interagency review and receiving the administrator’s approval.

Executive Order Revives Trump-Era Science Standards and Transparency Requirements

President Donald Trump issued a sweeping executive order on Friday titled “Restoring Gold Standard Science,” mandating a comprehensive overhaul of how federal agencies manage and apply scientific research. The order criticizes agencies for eroding public trust in science through their handling of issues such as the COVID-19 pandemic, climate policy, and fisheries management. Within 30 days, the White House Office of Science and Technology Policy must issue new guidance requiring agencies to prioritize transparency, reproducibility, and integrity in scientific processes.

The order also directs all agencies to review and potentially revise regulations issued during President Joe Biden’s tenure (2021–2025) to ensure consistency with the new science policy framework. Additionally, agencies must revert to the scientific integrity policies in place as of January 2021, the end of Trump’s first term, while they develop new protocols.