
President Trump imposes reciprocal tariffs on over 60 countries, FDA launches PreCheck Program to streamline regulatory review, and more…
IN THE NEWS
- President Donald J. Trump imposed reciprocal tariffs on over 60 countries after failing to reach trade deals that might have averted the new tariff rates that range from 10 percent to 50 percent. The tariffs, part of President Trump’s “Liberation Day” initiative announced in April, are intended to boost U.S. manufacturing by encouraging companies to reshore production. Supporters have praised the initiative for generating over $152 billion in annual revenue, while critics have warned of rising consumer costs and potential stagflation. Challengers have questioned the tariffs’ legality under a 1977 law, with courts set to address President Trump’s national emergency authority that undergirds the tariff initiative.
- The U.S. Food and Drug Administration (FDA) launched the FDA PreCheck program to streamline regulatory review and facilitate construction of domestic pharmaceutical manufacturing facilities. The initiative, spurred by an executive order from President Trump, is intended to reduce approval times for new drug manufacturing plants by eliminating redundant requirements. Supporters have praised the program for enhancing U.S. drug supply chain resilience, while critics have warned that rushed reviews could compromise safety standards. The program’s two-phase approach seeks to expedite inspections while maintaining rigorous oversight.
- The U.S. Department of Veterans Affairs (VA) proposed the reversal of a 2022 rule that permitted the VA to provide abortions to veterans and eligible family members if determined medically necessary or if the pregnancy is the result of rape or incest. If the proposed change is adopted, however, pregnant women would still have access to abortions in specific life-threatening circumstances, such as ectopic pregnancies or miscarriages. The VA observed that it had disallowed most abortions under its medical services package between 1999 and 2022, explaining that the 2022 rule allowing abortions “contradicted decades of Federal policy against forced taxpayer funding for abortion.” Several reproductive rights groups opposed this action, emphasizing that the reversal would reduce servicemembers’ and veterans’ access to basic reproductive care.
- Illinois Governor JB Pritzker signed the Wellness and Oversight for Psychological Resources Act (WOPR), which limits the use of artificial intelligence (AI) in therapy and psychotherapy services. WOPR prohibits using AI in the state for therapeutic decision-making, but allows licensed behavioral health professionals to use AI for administrative and support tasks. WOPR aims to protect patients from “unregulated and unqualified” AI products, especially amid concerns over the use of AI chatbots in youth mental health services. It also seeks to preserve the jobs of thousands of behavioral health providers in Illinois.
- Italy’s Ministry of Health issued a decree tightening regulations on gender-affirming medical care for minors, requiring psychological evaluations and court approval before treatment. The decree responded to concerns about the safety of irreversible procedures, aligning with recommendations from a panel of medical experts in Italy. Supporters praised the measure for prioritizing child welfare, while critics argued that it restricts access to essential health care for transgender youth. The regulations sparked debate over the balance of medical ethics and individual rights.
- The Secretary of the U.S. Department of the Interior issued an order intended to optimize the use of federal lands by requiring the consideration of alternative projects with higher energy capacity densities when reviewing proposed energy projects. According to the order, wind and solar projects are “highly inefficient uses of federal lands” because, compared to other energy sources, they use more federal lands relative to their energy generation. Interior Secretary Doug Burgum stated that wind and solar energy projects “hold America back from achieving U.S. energy dominance while weighing heavily on the American taxpayer and environment.” This order follows previous executive orders issued by President Trump that have directed the Interior Department to facilitate domestic energy production and end taxpayer-funded subsidies to wind and solar projects. Oceantic Network, a nonprofit, criticized the order, stating that it will hinder valuable power sources from reaching consumers.
- FDA proposed lowering the minimum standard sugar content in orange juice in response to a citizen petition submitted by the Florida Citrus Processors Association and Florida Citrus Mutual. The proposal aims to “promote honesty and fair dealing in the interest of consumers and provide industry greater flexibility in the manufacture of pasteurized orange juice.” FDA noted that the change would have a minimal impact on the nutrient levels of, and likely not affect the taste of, orange juice.
WHAT WE’RE READING THIS WEEK
- In a recent Brookings Institution essay, Matt Kasman, the assistant research director of the Brookings Center on Social Dynamics and Policy, and Ross A. Hammond, the director of the same center, discussed why and how society should regulate the use of AI in health care. Kasman and Hammond contended that the impact of AI on health outcomes will be shaped by external “human factors,” which could “blunt” the positive impacts of AI tools in health care or introduce unintended negative consequences. They also argued that AI tools could maintain, exacerbate, or even introduce new health disparities. Kasman and Hammond suggested that any regulatory framework for AI in health care should ensure that AI tools are tested before and after they are made available to the public. They also recommended requiring that users be informed about what tools can and cannot do, “proactively” protecting against medical misinformation.
- In a recent comment released by the George Washington University Regulatory Studies Center, Mark Febrizio, a policy analyst at the Center, examined the potential for ChatGPT to enhance public participation in the federal rulemaking process. Febrizio argued that AI tools could simplify complex regulatory texts and enable broader and more informed public comments, particularly for small businesses and individuals. He cautioned that agencies must ensure transparency in AI-generated submissions and address risks such as misinformation. Febrizio proposed pilot programs to test AI’s role in notice-and-comment rulemaking, recommending that agencies evaluate their efficacy through stakeholder feedback.
- In an article in the American University Law Review, John K. Bagby, a professor emeritus at the College of Information Sciences & Technology at Pennsylvania State University, and Nizan Geslevich Packin, a professor at the Zicklin School of Business at Baruch College, City University of New York, argued that “meme stocks” and social media-driven speculation have resulted in volatile financial markets. Bagby and Packin defined “meme stocks” as stocks driven by non-financial considerations, such as virality on social media. They described how social media platforms have enabled the spread of information about investment strategies and market speculation, a phenomenon which threads the needle between ordinary activity and market manipulation. Bagby and Packin recommended stronger disclosure requirements for “meme stock” companies, a new regime of transparency regulations for social media personalities who discuss stocks, and improved legal and forensic approaches to investigating potentially manipulative market schemes.
EDITOR’S CHOICE
- In an essay in The Regulatory Review, Jack Solowey, former policy analyst at the Cato Institute’s Center for Monetary and Financial Alternatives, argued that artificial intelligence providers should not be held liable for uses of their tools that violate securities law because such liability would contradict standard economic and legal frameworks. Solowey claimed that, although economists try to assign liability to the “least cost avoider,” or the party who can prevent harm at the lowest cost, it is unlikely that AI tool providers are the least cost avoiders for securities law violations. Legally, placing “full liability” on AI providers would reduce valuable AI innovations that benefit securities market participants, Solowey argued. Furthermore, Solowey contended that neither the common law doctrines of products liability and agency law, nor key principles of U.S. securities law, suggest that universal AI provider liability is appropriate.