Washington Report (February 2025)

Trade

The pace of action on international trade since President Trump took office less than a month ago has been frenetic. Last Thursday, the President announced that the Administration, through the U.S. Trade Representative (USTR), Department of Commerce and other agencies, would move forward with reciprocal tariffs on a country-by-country basis, avoiding what he characterized as a “one-size-fits-all” approach to trade arrangements. The anticipated action will follow submission of agency reports, analyzing the extent of trade imbalances between the U.S. and specific trading partners according to Administration officials. After submission of the reports, which are due April 1, the White House directive orders federal agencies to “initiate … all necessary actions to investigate the harm to the U.S. from any non-reciprocal trade arrangements adopted by the trading partners.”

Reciprocal tariffs usually refer to measures taken by both parties to ensure fairness in bilateral commerce. The goal is to offset not just a trading partner’s own tariffs on US goods, but also other factors deemed to put American manufacturers at a disadvantage, such as subsidies to businesses that are seen as unfair, regulations, value-added taxes (VATs), exchange rates and lax intellectual property protections. These so-called “non-tariff barriers” can be hard to quantify.

Reciprocal tariffs could be imposed in a number of ways: They could be applied to specific products, to entire industries, or as an average tariff on goods arriving from a specific country. In the coming days and weeks, we may see additional details about how the administration plans to implement this plan. There are a number of existing avenues to pursue, including through Section 338 of the Trade Act and an investigation by the U.S. International Trade Commission (ITC) to determine if discriminatory action has occurred. According to Section 338 of the Trade Act, an ITC investigation could view “discrimination” in a variety of relatively broad ways, including a country directly or indirectly placing the commerce of the United States at a disadvantage compared with the commerce of any foreign country. That could be through regulations, practices by or in respect to any customs, tonnage, or port duty fee, charge, exaction, classification, restriction, or prohibition on products.

This action is the latest in a series of developments on trade. The following is a brief recap--

Aluminum and Steel Tariffs: On February 10, the Administration announced it would impose a 25 percent tariff on global steel and aluminum imports, which will go into effect at 12:01 a.m. on March 12.

Canada and Mexico: Even though Canada and Mexico are subject to the product-specific tariffs on steel and aluminum, imposition of broader 25% tariffs on imports from Canada and Mexico continue to be on hold until March 1. Both countries have promised retaliatory action should tariffs move forward. Canada’s retaliatory list includes a 25 percent tariff on wood and products from the U.S.

China: 10 percent tariffs on Chinese imports to the U.S. went into effect on February 1, prompting retaliatory tariffs on a limited set of products from China, which kicked in February 10. So far, an expected conversation between President Trump and Chinese President Xi to has not yet taken place.

WIA is close to the action and will keep you apprised as more details become available.

Corporate Transparency Act
Early last week, legislation to extend the deadline for an estimated 32 million small businesses to report their beneficial ownership information (BOI) as mandated by the Corporate Transparency Act (CTA) passed the U.S. House unanimously.

The House passed  H.R. 736, Protect Small Businesses From Excessive Paperwork Act of 2025 , 408–0. The bill, which proceeds to the Senate next, extends the deadline for filing BOI reports to January 1, 2026. The deadline for most reports previously was January 1, 2025, but the reporting requirements have been caught up in numerous court cases and are now on hold.

Senate Banking Committee Chairman Tim Scott (R-SC) introduced a companion bill in the Senate on Tuesday. Both bills only affect reporting companies that existed before January 1, 2024. Companies formed after that date are not affected.

Workforce

Next week, Senators Jim Risch (R-ID) and Angus King (I-ME) are expected to reintroduce the Jobs in the Woods Act—legislation that authorizes grants to stand up training programs to attract workers into the forestry, logging and forest products manufacturing sectors. The bill is modeled after a highly successful training program developed at the University of Wisconsin-Stevens Point that features a mobile sawmill that travels to local and community colleges to allow students to obtain hands-on experience.

Provisions of the legislation were folded into the House Agriculture Committee-passed Farm Bill legislation last year which stalled before it received a House floor vote. We anticipate that the Jobs in the Woods Act legislation will ride on Farm Bill reauthorizing legislation in the 119^th Congress.

Tax

A considerable amount of activity is happening in the tax space. On the macro level, House and Senate leaders have started the budget reconciliation process which will enable them to pass GOP policy priorities through the Senate with only a simple majority vote instead of the usual 60 vote threshold. On Thursday, the House Budget Committee approved a comprehensive budget resolution by a 21-16 party-line vote. Committee approval of the resolution—the first step in moving a budget reconciliation package— provides significant momentum in the House Republican leadership’s effort to enact President Trump’s domestic policy priorities in a single bill. The measure would extend key business tax benefits of the Tax Cuts and Jobs Act (including 100 percent bonus depreciation and the research and development tax credit), as well as appropriate funds for border security and provisions that advance energy exploration and development policies. In the Senate, Republican leadership continues to pursue a two-bill approach, with the Senate Budget Committee acting last week to move a budget resolution that addresses border security and energy. Senate leaders—who may pursue Senate passage of this proposal this week--would prefer to address these issues in the first package and follow-up with a second bill dedicated solely to tax. The concern among House leaders with the 2-bill approach is that the second bill may never materialize. House Speaker Johnson is trying to manage several competing factions in his own party which currently only holds a one seat majority in the House. His current thinking is that he will only be able to hold his fragile caucus together for a vote on a single, comprehensive measure.

The House is in recess this week for the Presidents Day holiday but will be back in the capital the following week, during which it is expected to consider the House Budget Committee-passed resolution. 

In other tax news, Senate Majority Leader John Thune (R-SD) last week led 45 of his Senate colleagues, including Sen. Mike Crapo (R-ID, chairman of the Senate Finance Committee, in reintroducing legislation that would permanently repeal the federal estate tax, commonly known as the death tax. Thune, who has long made estate tax repeal a priority, led the Senate’s attempt to repeal the estate tax while Congress considered the Tax Cuts and Jobs Act (TCJA) in 2017. Although the final version of the TCJA did not repeal the estate tax, the law effectively doubled the individual estate and gift tax exclusion to $10 million (approximately $13.9 million in 2025 dollars) through 2025, which prevents more families and generationally-owned businesses from being affected by this tax. The increased exclusion expires at the end of 2025, which increases uncertainty and planning costs for family-owned businesses.  

And finally, earlier in January legislation making the Section 199A deduction for S-Corporations and other pass-through tax structures permanent was reintroduced. Recall this 20 percent deduction expires at the end of 2025. Known as the Main Street Tax Certainty Act, the legislation is identical to bills introduced in the House and Senate last Congress led by Senator Steve Daines (R-MT) and Rep. Lloyd Smucker (R-PA-11). The legislation boasts 152 cosponsors in the House and 33 cosponsors in the Senate. The effort is bicameral and bipartisan, which bodes well for its inclusion in a tax reconciliation bill that will be assembled in the coming weeks (see above).

Regulatory Reform Legislation

On February 12, the House approved legislation (H.R. 77) to dramatically expand Congress’s ability to roll back regulations approved by the prior administration. Currently, Congress may pass a Congressional Review Act (CRA) resolution that overturns on a case-by-case basis regulations  adopted in roughly the last 6 months of the previous President’s term. H.R. 77 would expand on this authority to apply to those regulations adopted during the previous year of a President’s final year in office and allow Congress to bundle many rules together and overturn them in a single vote.

The final vote was 212-208. Reps. Henry Cuellar (D-TX) and Brian Fitzpatrick (R-PA) were the only Democrats to support the measure.

Nominations

In a bipartisan vote last Thursday, the Senate voted 72-28 to confirm Brooke Rollins to serve as US Department of Agriculture Secretary. This is a key cabinet position as her Department oversees and administers Wood Innovation Grants as well as the Community Wood grant program—both support mass timber/cross laminated timber projects across the country. USDA also administers a suite of renewable energy programs that promote biomass heat and power projects at sawmills and other forest products manufacturing facilities. Moreover, USDA houses the Forest Service that is responsible for managing our federal forest lands and the Forest Inventory and Analysis program which keeps tabs on the health of the U.S. forest resource.

Up next week in committee is former Rep. Lori Chavez-DeRemer to become the next Secretary of Labor. Chavez-DeRemer is a moderate Republican who was eager to reach across the aisle during her time in Congress and work with like-minded Democrats on policy issues. She was the lead Republican in the House on the Jobs in the Woods Act legislation and was a member of the House Problem Solvers Caucus. Several Republican Senators are expected to vote “no” on her nomination due to her support for pro-labor union legislation known as the PRO Act, however she will pick up Democrat support and is expected to be confirmed.