Washington Report (March 2025)

Government Funding

Last week, the House and Senate passed a 6 month Continuing Resolution (CR) to fund the federal government through the end of the fiscal year. It had appeared earlier in March that we were headed for a federal government shutdown on March 14 when existing funds expired, but House Speaker Mike Johnson (R-LA) was able to hold his slim GOP majority together to pass the measure through the lower chamber. Following that vote, Senate Minority Leader Chuck Schumer (D-NY) signaled he would vote for the CR and it ultimately passed the Senate and was signed by the President. The Fiscal Year 2026 appropriations process will ramp up in Congress in the coming days.

Trade

Last Wednesday, the European Union (EU) announced its proposed retaliatory tariffs on U.S. products as a result of US tariffs on European steel and aluminum. The European Commission’s statement may be found here. The list of products targeted by the EU is extensive, and includes many wood products like lumber, veneer, molding, flooring, plywood, OSB, casks, and more. These tariffs would go into effect in April, after a consultation period this month.

The European Commission (EC) is holding "Stakeholder Consultations," where industry can provide feedback on the proposed tariffs through an online survey. At this time, US exporters as well as their European importers are encouraged to fill out the online consultation form to encourage the exemption of U.S. forest products from this trade dispute.

The EC has launched this survey seeking the views of those affected by the tariffs, with a deadline for submissions of March 26th. The full list of products included in this trade action is available on the survey page, and forest products begin with HS code "44". Commentson these proposals will be accepted until March 26th and we expect the counter-tariffs to go into effect in mid-April.

In earlier trade action March 1, President Trump issued an executive order titled " Addressing the Threat to National Security from Imports of Timber, Lumber," which initiates a Section 232 investigation under the Trade Expansion Act of 1962. This investigation aims to determine whether imports of timber, lumber, and derivative products, such as paper and furniture, pose a threat to U.S. national security. The order emphasizes vulnerabilities in the domestic wood supply chain and seeks to address them through potential measures like tariffs, export controls, or incentives to enhance domestic production. It highlights the vital role of the wood products industry in supporting national defense, economic stability, and industrial resilience.

The Department of Commerce leads on all 232 investigations and Commerce’s report, including recommendations to mitigate threats and strengthen the industry, is due no later than November 26th. Among the factors to be examined in the investigation are: 

• the current and projected demand for timber and lumber in the United States;
• the extent to which domestic production of timber and lumber can meet domestic demand;
• the role of foreign supply chains, particularly of major exporters, in meeting United States timber and lumber demand;
• the impact of foreign government subsidies and predatory trade practices on United States timber, lumber, and derivative product industry competitiveness;
• the feasibility of increasing domestic timber and lumber capacity to reduce imports; and
• the impact of current trade policies on domestic timber, lumber, and derivative product production, and whether additional measures, including tariffs or quotas, are necessary to protect national security.

Initiation of the 232 investigation does not necessarily predicate additional tariff action, but engagement from the entire forest products supply chain will be critical. We will keep you posted on opportunities to comment.

In other trade news, the President announced earlier this month that the 25 percent tariffs on Canada and Mexico that kicked in on March 4 would be paused until April 2—coincidentally the same day that the reciprocal tariffs will take effect, according to the President. Regarding the latter, these tariffs would be imposed on trading partners at a rate equivalent to the duty assessed on U.S. goods entering those markets. Clearly the situation on the trade front is fluid and we will do our best to report on developments as they happen.

Tax

On March 10, Representatives Ron Estes (R-KS) and John Larson (D-CT) reintroduced the American Innovation and R&D Competitiveness Act. The bill, which boasts 64 original cosponsors, would permanently allow for companies to fully expense their research and development (R&D) costs in the year in which those costs are incurred. Recall that this benefit expired in 2022, forcing companies to amortize these costs over a 5-year period. The bill revives the so-called R&D tax credit retroactively to 2022 and will be a centerpiece of discussion as the budget reconciliation tax package is forged in the weeks and months ahead.

EPA

Last week, Environmental Protection Agency Administrator Lee Zeldin announced a number of regulatory reform initiatives aimed at relieving compliance burdens on the regulated community. Of the 31 deregulatory actions that were announced, WIA is paying particular attention to plans to revisit the particulate matter (PM) 2.5 standard that was tightened last year. Recall, that the National Ambient Air Quality Standard (NAAQS) for PM was ratcheted down from 12 micrograms per cubic meter (µg/m³) to 9 µg/m³. This action threatened to bring large swaths of the country into nonattainment for the pollutant, resulting in barriers to obtaining new permits to expand operations, for example.

On the same day, Administrator Zeldin announced that EPA will work with the Army Corps of Engineers to review the definition of “waters of the United States” or WOTUS. The action aims at revising the definition in a way that provides farmers, forest landowners, businesses and states with clear and simplified direction for compliance. WOTUS has been litigated and debated for years and has led to expanded interpretation on what types of waters are under federal Clean Water Act jurisdiction—forcing landowners to obtain federal permits for wet areas on or near their land that could be interpreted to be a so-called “jurisdictional waters”—meaning they are covered by Clean Water Act protections and thus subject to discharge permits.

Jobs in the Woods Act/Workforce Development

Congresswoman Marie Gluesenkamp Perez (D-WA-3) is set to reintroduce the Jobs in the Woods Act in the coming weeks. She previously introduced this legislation during the 118th Congress alongside former Representative Lori Chavez-DeRemer, who is now the Secretary of the Department of Labor. The Jobs in the Woods Act requires the Department of Agriculture (USDA) to award competitive grants to eligible entities to conduct career pathway training programs in forestry, logging and sawmilling operations. We will keep you posted on developments and recruitment of a Republican co-lead in the House.  

In the broader workforce development space, the House Small Business Committee reported seven bills last week, one of which was H.R. 1642, the “Connecting Small Businesses with Career and Technical Education Graduates Act of 2025.”  – introduced by Committee Chairman Rep. Roger Williams (R-TX). The committee approved the bill unanimously 28-0. 

The legislation amends the Small Business Act to add a requirement for Small Business Development Centers (SBDCs) and Women’s Business Centers (WBCs) to educate small businesses on identifying career opportunities for graduates of career and technical education programs. It also requires SBDCs and WBCs to assist graduates of such programs who want to start a small business of their own. WIA will continue to support and monitor this bill as it progresses.

Federal Forst Lands/Timber Production

On March 1, President Trump issued an Executive Order the "Immediate Expansion of American Timber Production " aimed at boosting domestic timber production while addressing forest health, wildfire mitigation, and economic benefits. Key directives include:

• Updated Guidance: Within 30 days, the Secretaries of the Interior and Agriculture must issue revised guidance to enhance timber production and forest management.
• Streamlined Approvals: A strategy to expedite forest management project approvals under the Endangered Species Act (ESA) is to be developed within 60 days.
• Timber Sales Targets: A four-year plan setting annual timber sale goals for federal lands is due within 90 days.
• NEPA Categorical Exclusions: Within 180 days, the administration will explore using categorical exclusions under the National Environmental Policy Act (NEPA) to accelerate timber production approvals.
• Wildfire Mitigation: Improved forest management practices aim to reduce wildfire risks and enhance ecosystem health.

The order emphasizes the importance of sustainable forest management to mitigate wildfire risk and increase timber production and improve the efficiency of ESA consultations between federal agencies which often delay forest management actions.

In more federal forest policy news, last Thursday, the Senate Agriculture Subcommittee held a hearing to take testimony on the Fix Our Forests Act ( H.R. 471), which passed the House on a bipartisan vote in January. The legislation is a comprehensive bill that aims to restore forest health, increase resiliency to wildfires, and protect communities. It does so by expediting federal environmental analyses on proposed forest management plans, reducing frivolous lawsuits and increasing the pace and scale of forest restoration projects.

Container Ship Fees

On February 21, the U.S. Trade Representative (USTR) announced it would propose fees on Chinese ships and operators calling on U.S. ports in response to China’s growing maritime influence, which the Administration deems to be an unreasonable risk to U.S. commerce. The fees, which could be up to $1.5 million, are causing major concern up and down the manufacturing and retailing supply chain. 

The proposal follows a trade investigation into China’s practices in the maritime, logistics and shipbuilding industries that began under the Biden administration and concluded with a report just four days before the President took office. The inquiry concluded that Beijing was unfairly dominating the sectors and said “urgent action” was needed to address the issue. 

Specifically, the measures include port entrance fees of up to $1 million per ship owned by a Chinese vessel operator or up to $1,000 per net ton of a vessel’s capacity. For international maritime transport operators whose fleets are comprised solely of Chinese ships, the port entrance fee would amount to $1.5 million, according to USTR. For operators with fleets comprised of 50 percent or more Chinese-built vessels, the charge will be up to $1 million per vessel entrance to a US port. The fee would be reduced if the percentage is below 50.

Corporate Transparency Act

In a welcome development, the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) announced that it is ceasing enforcement of the Corporate Transparency Act (CTA) while it crafts a new set of regulations that will ultimately narrow the scope of the reporting regime. The CTA’s reporting requirements were scheduled to take effect once again beginning March 21.

FinCEN announced that it will not issue any fines or penalties or take any other enforcement actions against any companies based on any failure to file or update beneficial ownership information (BOI) reports pursuant to the Corporate Transparency Act by the current deadlines. No fines or penalties will be issued, and no enforcement actions will be taken, until a forthcoming interim final rule becomes effective and the new relevant due dates in the interim final rule have passed. This announcement continues Treasury’s commitment to reducing regulatory burden on businesses, as well as prioritizing under the Corporate Transparency Act reporting of BOI for those entities that pose the most significant law enforcement and national security risks. [Emphasis added.]

FinCen also made clear that a new proposed rule will be unveiled next month and will likely include significant changes to the existing reporting regime:

No later than March 21, 2025, FinCEN intends to issue an interim final rule that extends BOI reporting deadlines, recognizing the need to provide new guidance and clarity as quickly as possible, while ensuring that BOI that is highly useful to important national security, intelligence, and law enforcement activities is reported.

FinCEN also intends to solicit public comment on potential revisions to existing BOI reporting requirements. FinCEN will consider those comments as part of a notice of proposed rulemaking anticipated to be issued later this year to minimize burden on small businesses while ensuring that BOI is highly useful to important national security, intelligence, and law enforcement activities, as well to determine what, if any, modifications to the deadlines referenced here should be considered.