Election

At the end of his prior administration, President Trump tried to overhaul the federal workforce by making it easier to remove a substantial number of federal employees. With his incoming administration, President-elect Trump may try to do so again. Though Presidents have broad authority over federal employees, these renewed efforts may face new legal challenges because of a recent Biden Administration rule specifically intended to prevent a rollback of civil service protections.  Importantly, the rule itself recognizes federal employees’ long-standing reliance interests in their jobs that could make rescinding the new rule particularly difficult.

To go back to the end of the previous Trump Administration, on October 21, 2020, President Trump issued an “Executive Order on Creating Schedule F in the Excepted Service.”  That order created a new Schedule F for “[p]ositions of a confidential, policy-determining, policy-making, or policy-advocating character not normally subject to change as a result of Presidential transition.”  Simply put, it would have allowed the President to treat some career civil servants as political appointees and exempt them from Civil Service Rules and Regulations, including protections from removal, thereby giving the President expanded authority to remove federal employees at will.

Though President Trump’s order never went into effect, the Biden Administration nonetheless finalized a rule on April 4, 2024, that clearly responded to it.  That rule, titled “Upholding Civil Service Protections and Merit System Principles,” “clarifies and reinforces longstanding civil service protections and merit system principles[.]”  Interestingly, the rule’s preamble directly addresses a situation where “a future Administration,” such as the incoming Trump Administration, “seeks to rescind this rule and replace it with [Schedule F].”  The preamble goes on to read as a roadmap of the significant hurdles rollback efforts would face.  With that framing in mind, the rule explains that a future Administration, in complying with the Administrative Procedure Act (“APA”), would need to:Continue Reading Civil Service Protections in the Trump Administration

November 25, 2024, Covington Alert

The inauguration of President Trump on January 20 is expected to bring important changes to U.S. trade policy that are likely to affect companies that supply international customers, or are reliant on global supply chains. As discussed in our prior client alert, international trade is expected to be a key focus of President Trump, who has repeatedly expressed a preference for using tariffs as a policy tool to create perceived leverage for dealmaking with international partners on both economic and non-economic issues. Recent announcements by the Trump transition team regarding cabinet and staff appointments reinforce the view that trade policy under a second Trump administration could involve significant unilateral U.S. action, including the imposition of substantial new tariffs and a hawkish stance toward China. These new tariffs could be implemented swiftly after Trump takes office, or could alternatively be subject to more extensive investigative and reporting procedures, depending on the legal authority invoked. New tariff measures, as well as other trade actions Trump has proposed, could lead to retaliatory responses by U.S. trading partners, including key U.S. allies. This alert explores how trade policy may be implemented by a second Trump administration, and considers how companies may prepare for and mitigate the risks associated with these developments.

Cabinet Nominations and Other Economic Appointees

In recent weeks, Trump has announced several cabinet and staff appointments for his second administration, including individuals responsible for implementing trade policy. Key among them is Howard Lutnick, chairman and CEO of a Wall Street investment firm and co-chair of Trump’s transition team, whom Trump has selected to be Secretary of Commerce. Echoing Trump’s own views, Lutnick has been a strong advocate for using tariffs as an industrial policy tool and bargaining chip to rebalance U.S. trade, though he has suggested tariff measures under a second Trump administration may be more “targeted” than the universal 10 to 20 percent tariffs proposed by Trump during his campaign. In announcing Lutnick’s forthcoming nomination, Trump noted Lutnick would lead the administration’s “Tariff and Trade agenda,” and that he would have direct responsibility over the Office of the United States Trade Representative (“USTR”). As USTR is a separate agency established by Congress within the Executive Office of the President to lead on trade issues, it is uncertain if the announcement was referring to informal oversight over USTR or a formal restructuring of the agency. Should Trump seek to consolidate USTR within or under the Commerce Department, he may face opposition from Congress, whose approval would be required for such a reorganization. Continue Reading Trade Policy Under a Second Trump Administration and Implications for Business

The conventional wisdom in recent years has been that the political parties have been moving to their respective left and right extremes. At least for the Republicans, this is wrong. Republicans have been moving left – to the center – enabling them to steal some formerly Democratic voters.

It’s true that Republicans have become more focused on illegal immigration and border security. They used transgender issues in the election, as well as crime. They plan to cut taxes and expand U.S. energy production. This is all standard Republican fare. Superficially, it might be easy to think Republicans have been tacking right – and President Trump’s sometimes harsh language could easily reinforce that impression.

But when it comes to tariffs, entitlement spending, debt/deficits, organized labor, antitrust, and even abortion, Republicans are moving left, led by President Trump.  In fact, it’s difficult to think of a single issue on which the GOP has moved right in the last eight years.

Contrary to Republicans’ long-standing opposition to tariffs, President Trump embraces tariffs as a vital tool to fix the loss of manufacturing and the trade deficit. His vow to enact a 10 percent across-the-board tariff and a 60 percent tariff on Chinese imports is more than campaign bluster. He doesn’t need congressional approval to make these moves, and he’s likely to follow through on his vow. He might begin by announcing tariffs will commence on a date-certain and then use the time to negotiate new trade deals. But he might also let the tariffs take effect and then commence a bilateral negotiation.Continue Reading Republicans Moving to the Middle

On Sunday evening, President-elect Donald Trump announced that he will name Federal Communications Commission (FCC) Commissioner Brendan Carr as Chair of the FCC.  Because Commissioner Carr is a sitting Commissioner, no Senate confirmation is needed, and he will become FCC Chairman as of Inauguration Day on January 20, 2025.   

While…

Continue Reading Trump Signals Continued Focus on “Big Tech” in Naming Brendan Carr as FCC Chair

Following the decisive election on November 5, the process of selecting and vetting individuals to fill the second Trump administration’s key appointed positions is quickly shifting into high gear. For those tapped for consideration, the decision to enter the process may be one of the most significant decisions of their…

Continue Reading A Primer for Navigating the Presidential Appointee Vetting and Confirmation Process

October 28, 2024, Covington Alert

The upcoming U.S. presidential election on November 5 will have important implications for U.S. trade policy that are likely to affect companies reliant on international supply chains. There are important differences in how former President Donald Trump and Vice President Kamala Harris approach the use of trade tools to advance U.S. policies and priorities, including whether such tools should be deployed unilaterally, or as part of a collective action with U.S. allies.

For instance, a victory by Harris will likely signal continuity in the current approach of the Biden administration, in which trade has not been a central policy priority, but has instead taken a backseat to—and been used as a tool to support—other key policies on climate, technology, human rights, and industrial development. While a Harris administration is therefore unlikely to pursue new trade initiatives aimed at increased market access, a Harris administration may consider joint action with U.S. allies and likeminded trading partners, or at least be receptive to input from such partners in pursuing trade-related actions.

In contrast, trade is expected to take center stage under a second Trump administration, with unilateral action expected to be the preferred approach. Trump has repeatedly referred to tariffs as his policy tool of choice, and views tariffs as important in creating leverage for dealmaking with international partners on both economic and non-economic issues. Trump and his economic advisors also view the U.S. trade balance as an important measure of economic performance, and bilateral trade deficits are likely to face scrutiny and provoke potential action.

This alert explores certain key trade issues to be confronted by the next administration, assesses how each candidate may approach these issues differently, and considers how companies may prepare for and mitigate the risks associated with each candidate’s approach.

Divergent Approaches to U.S. Tariffs

While Congress has primary constitutional authority over tariffs and other trade policy matters, the President has broad authority to adjust tariffs and impose other import restrictions under certain statutes, without approval from Congress. The outcome of the U.S. election will determine to a great extent the importance that tariffs will play as a U.S. policy tool over the next four years.Continue Reading The Impact of the U.S. Elections on Trade and International Supply Chains

With Election Day just weeks away, employers should quickly brush up on laws that permit employees to take time off to vote.  There is no federal law permitting time off to vote, but a majority of states and the District of Columbia have some form of voting leave law, with…

Continue Reading Is Your Workplace Election Ready?  Voting Leave Laws Across the States

Executive Summary

  • Nation-wide elections for mayors and city councilors will likely impact Brazil’s national politics, its federal government, and the upcoming elections for the Speaker of the House and President of the Senate – all of them relevant for investors.
  • The local elections will be seen as a referendum on President Luiz Inácio Lula da Silva’s policies, as well as a test of the opposition’s strength, including former President Jair Bolsonaro’s current political standing.
  • The outcome of these elections might impact the Lula administration’s policy trajectory, the strength of the pro-business majority in Brazil’s National Congress, and the functioning of federal regulatory agencies in 11 key economic sectors.

Analysis

On October 6, Brazil will hold its nation-wide elections for mayors and city councilors.  All 5,569 Brazilian cities will elect the head of the local executive branch, as well as all city council members for a four-year term.

While this electoral cycle focuses on local issues, and mayors and city councilors have a limited policy impact on businesses, the local elections will likely have a significant impact on national politics, the federal government, and the upcoming elections for the Speaker of the House of Deputies and the President of the Federal Senate – all of them relevant to investors.

Impact on federal government

Election watchers will be looking at the performance of the main political groups based on three indicators: the total number of mayors and city councilors they elect; wins in the 27 state capitals; and wins in the so-called “G103”, the 103 cities with a population of more than 200,000.

If the election results in a larger number of mayors and city councilors formally supported by President Luiz Inácio Lula da Silva, this will likely be seen as voters’ endorsement of his policies.  While voters might not focus on specific policies – including, among other aspects, a lax fiscal policy, increased taxation, and state capitalism-type measures – individual perceptions on cost of living and economic prosperity tend to play a role in voting decisions.  In this scenario, the Lula administration will likely continue its current policy trajectory.  However, if the total number of mayors and city councilors supported by the president is equal to or lower than the existing number, the result will probably be seen as a rebuke of the Lula administration and might result in pressure to change current policies.Continue Reading Impact of Brazil’s Local Elections on Businesses

With Election Day fast approaching, corporations face increasing pressure from both internal and external forces to make legal decisions about political activities. This can be a fraught area of law, with little understood, highly technical regulatory issues that vary significantly across jurisdictions. Corporate counsel should be mindful of common—and sometimes…

Continue Reading Avoiding Pitfalls on the Path to Election Day: Common Political Law Risks for Corporations in Election Season