Week in Review

IN THE NEWS

• President Donald J. Trump issued an executive order imposing reciprocal tariffs on more than 100 countries. Citing a “national emergency” of “trade deficits,” the order applied a baseline 10 percent tariff “on all imports from all trading partners,” excluding Mexico and Canada—which are already subject to previously announced tariffs—and certain products, such as steel, pharmaceuticals, and energy commodities. Many countries—including China, Japan, and member states of the European Union—face additional tariffs. Leaders in many of the affected countries are considering countermeasures to protect their economic interests.
• The U.S. Supreme Court held in favor of the Food and Drug Administration (FDA), finding that the agency did not act unlawfully in rejecting applications from two manufacturers of flavored liquids used in e-cigarettes. Justice Samuel A. Alito, Jr. wrote for a unanimous panel, leaving in place an FDA order prohibiting retailers from marketing flavored tobacco products. In the opinion, the Court cited the dangers of marketing tobacco products to children with enticing flavors. Yolonda C. Richardson, the president and CEO of the Campaign for Tobacco-Free Kids, celebrated the decision while Tony Abboud, executive director of a trade association representing e-cigarettes companies, said that he was “deeply disappointed” by the ruling.
• The U.S. Court of Appeals for the D.C. Circuit temporarily paused the reinstatements of Cathy A. Harris to the U.S. Merit Systems Protection Board and Gwynne A. Wilcox to the National Labor Relations Board. After President Trump removed Harris and Wilcox—both Biden appointees—from their positions, two federal district judges found that the removals were unlawful and ordered that Harris and Wilcox be reinstated. The D.C. Circuit halted these district court orders, indicating that the statutory removal protections for members of executive agencies may be deemed unconstitutional because such protections deprive the President of “the ability to control the executive branch.” The D.C. Circuit’s order implicates Humphrey’s Executor v. United States, a 1935 case upholding for-cause removal protections for independent agencies, and Seila Law v. Consumer Financial Protection Bureau, a 2020 case limiting the Humphrey’s Executor rule to “multimember expert agencies that do not wield substantial executive power.”
• The U.S. Court of Appeals for the D.C. Circuit temporarily paused a lower court order blocking the Trump Administration from dismantling the Consumer Financial Protection Bureau (CFPB). The lower court order blocked the Trump Administration from eliminating the CFPB “before the Court has the opportunity to decide whether the law permits them to do it.” The Administration requested a temporary stay of this order, which the D.C. Circuit granted “to give the court sufficient opportunity to consider the emergency motion.” The D.C. Circuit will hear oral arguments next week to decide whether to uphold the order in the long term.
• President Trump issued an executive order establishing the “United States Investment Accelerator,” an office meant to expand the assistance that the federal government provides to companies that plan to invest and build within the United States. President Trump intends to decrease the regulatory hurdles these companies currently face by facilitating and accelerating investments above $1 billion. According to the order, this facilitation will occur by reducing regulatory burdens, increasing access to national resources, and facilitating research collaborations with national labs. The office will work with state governments to meet its goals.
• The U.S. District Court for the District of Maryland issued an order preliminarily enjoining the Trump Administration from firing probationary employees who live or work within 19 states and the District of Columbia. This order, issued by Judge James K. Bredar, narrowed the scope of a previous order reinstating employees nationwide. Judge Bredar stated in the decision that he chose to apply the order only to those who live or work in the jurisdictions that sued. The order leaves unclear the total number of federal agency probationary employees who may be fired.
• The Federal Trade Commission (FTC) paused its lawsuit against several large pharmacy-benefit managers for allegedly inflating insulin prices. According to the order, the FTC lacks “sitting Commissioners able to participate” in the matter. At this time, the FTC only has two sitting commissioners, who are both recused from the case. Last month, President Trump fired the other two sitting commissioners, Alvaro Bedoya and Rebecca Kelly Slaughter, who have since sued the President, claiming that their removals were unlawful.
• President Trump issued an executive order targeting unfair practices in the U.S. live concert and entertainment industry. The order directs the FTC to “rigorously enforce” the Better Online Tickets Sales Act against “unscrupulous middlemen” to prevent deceptive and anti-competitive conduct, including excessive fees from ticketing platforms and price-gouging in the secondary ticket market. The order also instructs the FTC to take action to ensure “price transparency at all stages of the ticket-purchase process.” The order is intended to address “market distortions” that make live entertainment less accessible.

 WHAT WE’RE READING THIS WEEK

• In a recent Brookings Institution article, Adam Looney, a visiting fellow at the Brookings Institution, and Elena Spatoulas Patel, a senior fellow at the Urban-Brookings Tax Policy Center, argued that Congress should pair President Trump’s widespread tariffs on imports with an equivalent subsidy on U.S. exports to create a border-adjustment tax regime. Looney and Patel suggested that this regime, which would give businesses tax credits for exported goods and services, would accomplish President Trump’s objectives of raising revenue and closing the trade gap between U.S. imports and exports while limiting the costs for U.S. businesses and complying with international trade agreements. Looney and Patel also contended that a border-adjustment tax regime would mitigate the impact of President Trump’s tariffs on consumer prices and business profits, and eliminate incentives for multinational businesses to shift profits abroad.
• In an article in the Harvard Law Review, Alina Das, a professor at New York University School of Law, examined the U.S. immigration detention system. According to Das, individuals held in immigration detention centers often face inhumane conditions, including medical neglect, unsanitary environments, and overcrowding. Das critiqued the court system for failing to protect these detainees’ rights by deferring to the executive branch’s authority over detention policies and rejecting constitutional, statutory, and administrative challenges. She argued that courts must recognize and enforce existing legal protections for detainees to prevent future mismanagement and neglect in the system.
• In a National Bureau of Economic Research working paper, Gaétan de Rassenfosse, an associate professor at the Swiss Federal Technology Institute of Lausanne, and Adam B. Jaffe, a professor of economics at Brandeis University, investigated whether the U.S. Patent and Trademark Office’s reduction of fees for small and micro entities affected the number of patent applications filed. Rassenfosse and Jaffe relied on three recent fee reforms to compare the fee rate changes to the number of new entrants. They found that fee reductions alone did not significantly increase participation in the patent system among these smaller entities. Rassenfosse and Jaffe also found, however, that the most significant shifts in the number of new filings were associated with non-fee-related events, such as the transition from a first-to-invent to a first-inventor-to-file system and the COVID-19 pandemic.

EDITOR’S CHOICE

• In an essay in The Regulatory Review, Roslyn Layton, a research fellow at Aalborg University Technical Faculty of Information Technology and Design, argued that transportation regulators should focus on developing a “safety culture,” or a set of shared practices and norms around transportation, to reduce automotive accidents and fatalities. Layton noted that the U.S. Department of Transportation currently uses a “safe system approach,” which accepts human flaws and attempts to design preventative systems that compensate for “inevitable errors.” Layton contended that a focus on regulating driver behavior and holding individuals accountable for unsafe conduct would better mitigate accidents and fatalities. Building this “safety culture” is particularly important amid a “disturbing trend of increasing fatalities” on U.S. roadways, Layton argued.