Welcome to Industrials Regulatory News and Trends. In this regular bulletin, DLA Piper lawyers provide concise updates on key developments in the industrials sector to help you navigate the ever-changing business, legal, and regulatory landscape.
OBBB tax and budget bill: EVs, renewable energy, coal. On July 3, Congress passed the “One Big Beautiful Bill,” and President Trump signed the sweeping tax and budget legislation into law the following day, July 4. Among other things, the new law will terminate the existing $7,500 income tax credit for purchasers of new electric vehicles, as well as a $4,000 used- EV tax credit. Both these provisions provided incentives for electric vehicle sales under the 2022 Inflation Reduction Act (IRA). A Harvard University study released earlier this year forecasted that ending those EV tax credits would reduce EV penetration in the US by six percent by 2030. The bill passed the Senate on the narrowest of margins – 51-50, with Vice President JD Vance casting the tie-breaking vote. After several days of disputes among different factions of the GOP majority in the House of Representatives, the body passed the bill by a 218-214 margin and sent it to the President for signature. Under the new law, the EV credits will expire effective September 30, 2025.
The new law also phases out tax credits for wind, solar and other renewable energy, thereby placing time limits on projects eligible to qualify for the IRA’s clean electricity 45Y production tax credit and 48E investment tax credit. Investment tax credits for nuclear, geothermal, and clean hydrogen projects remain on the pre-existing Inflation Reduction Act statutory timeline. The OBB also adds a tax credit for metallurgical coal used in steelmaking, which the bill newly defines as a critical mineral.
US-Canada trade talks back on. A “win-win” US-Canada trade deal is in reach, US Ambassador to Canada Pete Hoekstra stated during a Fourth of July event in Ottawa. Both sides, he said, are working to craft an agreement that will make trade “freer, fairer, and better for both countries.” Trade talks between the US and Canada resumed on June 29 after Canadian Prime Minister Mark Carney announced that Canada is rescinding its digital services tax on technology companies. The tax – which applied to both foreign and Canadian companies – was a sticking point in the ongoing trade talks between the two countries, and in June President Donald Trump announced he was “terminating ALL discussions on Trade with Canada” because of the tax, which he called "a direct and blatant attack on our country." Minister of Finance and National Revenue Francois-Philippe Champagne indicated that rescinding the digital services tax would open the way to negotiation of a new economic and security relationship with the US. Other areas being addressed in the talks involve the industrial supply chain and Champagne went on to state of the trade negotiations that Carney “has been clear that Canada will take as long as necessary, but no longer, to achieve that deal.” During the G7 summit in June, Canada and the US agreed to a 30-day deadline for their trade talks. That deadline is July 21.
A tariff agreement with India is “very close.” On July 7, President Donald Trump announced new reciprocal tariffs setting rates of 25 to 40 percent on 14 countries – among them Bangladesh, Indonesia, Japan, South Korea, Malaysia, Thailand, and South Africa – and stated that “we’re very close to securing a deal with India.” In that negotiation, both sides, the Financial Times reports, have already agreed to reduce the tariffs on thousands of items; India has also agreed to import more natural gas from the US. India is seeking duty concessions for such sectors as chemicals, plastics, and textiles, while the US is seeking concessions for certain industrial goods, among them automotive products and petrochemicals. The deadline for concluding a tariff deal between the two countries, originally set for July 9, has been extended to August 1. Barring an agreement, the President could levy additional tariffs of up to 26 percent on goods from India – but should a deal be reached, it would pave the way for a bilateral trade agreement (BTA). Both countries have said they intend to finalize the first tranche of a BTA by early fall. Such an agreement, President Trump recently commented, would be “a very big one” involving “full trade barrier dropping.”
Dr. Copper continues its climb. The price of copper is rising again following comments from President Trump on July 8 that he may impose a 50 percent tariff on its import. By market close on July 8, copper futures stood at $5.69 per pound, which, the Wall Street Journal noted, was copper’s "largest single-day price surge in records going back to 1968.” For comparison, on March 28, copper futures had soared to $5.13 per pound, itself a 30 percent increase over 2024 prices. The price of copper is now higher in the US than anywhere else in the world. As we reported in April, massive volumes of copper are being shipped to the US over tariff concerns. Copper is sometimes referred to as “Dr. Copper” for its track record as a global economic indicator.
Microplastics proposed for Candidate Chemical listing in California: Key considerations for businesses. California’s Department of Toxic Substances Control (DTSC) has proposed adding microplastics as a Candidate Chemical to be regulated under the Safer Consumer Products (SCP) program. This action and its subsequent steps – typically reserved for specific chemical compounds, not broad categories like “microplastics” – could provide DTSC with the means to regulate a wide variety of plastic-containing products, including packaging, in an unprecedented way. If fully implemented, the proposal could have significant and costly impacts on businesses that manufacture or sell plastic-containing products. Find out more in our alert.
UN committee rejects proposal to officially call plastic pellets dangerous goods. On July 1, a United Nations subcommittee rejected a proposal from Germany and the Netherlands to classify plastic pellets as dangerous goods in maritime transport. The United Nations Subcommittee of Experts on the Transport of Dangerous Goods discussed the proposal during its 66th session, which took place in Geneva, Switzerland, from June 30 through July 4. The discussion came about as the result of a joint paper submitted on June 3 by experts from Germany and the Netherlands arguing in favor of classifying plastic pellets as UN Class 9 dangerous goods, which are substances and articles that, during transport, present a danger not covered by the other classes of dangerous goods. This decision comes as parties prepare for the second part of the fifth, and intended final, session of the Intergovernmental Negotiating Committee (INC-5.2) to develop an international legally binding instrument on plastic pollution, including in the marine environment, scheduled to take place August 5–14, 2025 at the Palais des Nations in Geneva, Switzerland.
Congressional hearing on autonomous vehicles. “Looking Under the Hood: The State of NHTSA and Motor Vehicle Safety,” a House Energy and Commerce Subcommittee on Commerce, Manufacturing, and Trade hearing held June 26, explored potential regulatory structures for vehicles equipped with autonomous technologies –both fully autonomous vehicles and those with advanced driving assistance systems. During the hearing, representatives of various auto manufacturers said that they want Congress and the Trump Administration to move more rapidly to facilitate the deployment of autonomous vehicles without human controls. Industry witnesses testified that Congress has been divided for years about legislation to address autonomous vehicle issues, while the National Highway Traffic Safety Administration (NHTSA) has not moved quickly to rewrite safety rules and ease other hurdles. “The auto industry wants, it needs a functioning and effective auto safety regulator. We don’t have that today,” stated Alliance for Automotive Innovation CEO John Bozzella. “The agency isn’t nimble. Rulemakings take too long if they come at all.” Autonomous Vehicle Industry Association Director Jeff Farrah urged Congress to pass long-stalled nationwide legislation to allow the US to globally lead on autonomous vehicles as China moves aggressively in the field. Other witnesses questioned the idea that AVs are inherently safer. “AVs also may cause crashes that sober, alert and engaged drivers would routinely avoid,” stated Cathy Chase, president of the nonprofit alliance Advocates for Highway and Auto Safety, adding, “AVs, which are essentially billion-dollar pieces of equipment with years of research, should not drive better than only the worst drivers on our roads.” And Scott Benevidez, board president of the Automotive Service Association, urged the NHTSA to implement rules ensuring that ADAS (advanced driver assistance system) technologies remain properly calibrated: “ADAS and AVs can improve vehicle safety if the sensors that underpin the technology work properly throughout the vehicle’s road life. These sensors can become miscalibrated from normal wear and tear or even a bump from a shopping cart.”
Army’s acquisition process must be faster, more nimble, two Defense nominees say. The Army’s acquisitions process must become faster and more adaptable, two Trump Administration nominees for key Department of Defense technology roles told the Senate Armed Services Committee during their confirmation hearing on June 26. Brent Ingraham, the nominee for assistant secretary of the Army for acquisition, logistics and technology, said of the present acquisitions process, “Too often we see overly prescriptive requirements that are obsolete by the time they are approved, tying our acquisition programs to unachievable or outdated technology,” and he discussed ways to make the overall process more "agile, flexible and adaptable.” Michael Dodd, nominee for the post of assistant secretary of defense for critical technologies, stated that “the department’s technology vision will be to dramatically accelerate technology transition” to “strengthen the department’s adoption of critical technologies in fields like artificial intelligence, microelectronics, quantum science, space-based systems, or hypersonics.” The two nominees’ statements were in keeping with Modernizing Defense Acquisitions and Spurring Innovation in the Defense Industrial Base, the President’s April 9 Executive Order, which requires the Department of Defense to reform its acquisition processes, and a subsequent memo from Secretary of Defense Pete Hegseth that sets out the Army Transformation Initiative, a broad strategy to “build a leaner, more lethal force” and “accelerate delivery of war winning capabilities” by improving weaponry, eliminating wasteful programs and outdated equipment, and both modernizing and reducing the military workforce.
New alliance will tackle US deficiency in delivery of warships. On July 2, BlueForge Alliance, a Texas-based nonprofit, and Palantir, a leading technology company, announced a new program, funded through the US Navy's recently established Maritime Industrial Base program office that is intended to accelerate the production of warships and the readiness of the US fleet. Labeled “Warp Speed for Warships,” the program will utilize Palantir’s Foundry enterprise operating system – software that integrates data and decision-making tools – to facilitate greater collaboration across the maritime industrial base, the joint announcement said. “Powered by Palantir’s proven Warp Speed manufacturing operating system, Warp Speed for Warships is designed to accelerate shipbuilding modernization and readiness by digitally taking the first steps to better connect the network of shipbuilders, suppliers and critical partners responsible for building and sustaining the Navy’s fleet,” the announcement noted. Warship building in the US has slowed drastically in recent years, plagued by last-minute design changes, cost overruns, and an inability to recruit and retain employees. The Chinese Navy – which is rapidly expanding – reportedly has the capacity to produce ships at 200 times the rate of the United States.
Airlines and aircraft makers are hamstrung by holdups in the seat manufacturing industry. On July 2, global media outlet Reuters published its report on the perplexing and ongoing issues troubling the airline-seat manufacturing industry. The article noted that the airline industry is plagued by a logjam in seat manufacturing that has contributed to billions of dollars’ worth of manufacturing delays for major aircraft manufacturers and to higher passenger fares. Industry representatives referred to a “perfect storm” of supply-chain issues that are slowing down production and the delivery of seats to airlines. Among the supply chain issues Reuters noted are government certification requirements designed to protect head impact alongside a dearth of certification engineers. Commercial airline seats typically last about seven years, while planes themselves fly for 20 to 25 years, the report said, so even when new jets are finally delivered, the need for new seats soon comes around again.
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