Biden Administration Finalizes Greenhouse Gas Target Rule that is Likely to Draw Challenges

The Federal Highway Administration (FHWA) recently released a prepublication version of its final rule establishing a greenhouse gas (GHG) emissions measure.  The final rule establishes a method for measurement of GHG emissions associated with transportation and requires state departments of transportation (State DOTs) and metropolitan planning organizations (MPOs) that have National Highway System (NHS) routes within their jurisdiction to establish targets for reducing GHG emissions from on-road sources and to report on their efforts to meet those targets. The rule will take effect thirty days after the date of its publication in the Federal Register. State DOTs are required to establish targets and report those targets by February 1, 2024. Subsequent targets would be established and reported by no later than October 1, 2026.  

In the preamble to the final rule, FHWA spent considerable effort explaining how the rule: (1) is not a mandate – because it does not impose penalties for missing targets, (2) is not unfunded – because the Infrastructure Investment and Jobs Act (IIJA) and the Inflation Reduction Act (IRA) make billions of dollars in funding available to address carbon pollution reduction, and (3) is authorized under current law – despite no specific authorization in the IIJA.

Vehicle and engine emissions have long been directly regulated by the Environmental Protection Agency and the California Air Resources Board; this rule would require infrastructure decisionmakers to consider ways to reduce CO2 emissions of road users when programming project funds.

The rule is the latest about-face in a series of rulemakings on this subject during the Obama, Trump, and Biden Administrations, and it is likely to face challenges from Members of Congress and perhaps some western states.  

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U.S.-China Relations: A Warming Trend Sparks Opportunities for Chinese Business

In recent years, the U.S.-China bilateral relationship has hit historic lows, marked by notable events like the Chinese spy balloon incident in February and former Speaker of the House Nancy Pelosi’s visit to Taiwan in 2021. However, there is reason for optimism as we have witnessed a significant shift in dynamics over the past few months that may present opportunities for some Chinese businesses that have been negatively impacted by the geopolitical tensions.

High-level diplomatic engagements occurring throughout the summer and into the fall have contributed to a notable thawing of tensions between the United States and China. As we approach the Asia-Pacific Economic Cooperation (APEC) Summit, scheduled for next week, there is a unique opportunity for the Biden Administration to build upon this positive momentum. Administration officials know this very well, as they have acknowledged that the meeting between Chinese President Xi Jinping and President Biden at APEC presents a crucial chance to re-establish a foundation of stability in the relationship.

In our view, this stability is particularly important as both major political parties in the United States are expected to heavily incorporate China and U.S.-China policy into their rhetoric during the upcoming presidential election cycle. With this in mind, Chinese business involved in disputes with the U.S. federal government that arise from policy differences between China and the U.S., especially in areas of trade, investment, and technology, should be vigilant. This period may offer a window of opportunity for Chinese companies caught in the middle of such differences to resolve such disputes to mutual satisfaction, provided that the current atmosphere of cooperation endures.

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Carbon Border Adjustment Mechanism (CBAM) Transitional Phase Now in Effect

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The European Commission has adopted the implementing regulation establishing the rules for the CBAM during its transitional phase, spanning from October 1, 2023, to the end of December 2025. The implementing regulation delineates the reporting obligations imposed on EU importers of CBAM goods and the methodology for calculating embedded emissions in their production. This insight covers the regulation in full and looks at the concerns for the industry.

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European Union Sustainability Outlook

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With the European Commission driving forward “Fit for 55” – its plan for a green transition – we have selected relevant developments in EU sustainability law and policy from the past few months.

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PFAS Restriction Proposal

To curb an unacceptable risk to human health or the environment, Germany, Denmark, the Netherlands, Sweden and Norway jointly proposed a restriction proposal to ban over 10,000 Per- and Polyfluoroalkyl Substances (PFAS) commonly designated as “forever chemicals” under Article 68 of the REACH regulation.

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U.S. Executive Branch Update – October 5, 2023

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This report provides a snapshot of the U.S. Executive Branch priorities via daily schedules and the prior day’s press releases.

POTUS’ Schedule*

12:00 p.m. EDT – THE PRESIDENT receives a briefing on Ukraine from members of his national security team | Oval Office 

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Key Areas of Focus in U.S.-China Relations and Their Impact on Businesses in the 118th Congress

So far in the 118th Congress, U.S.-China relations have been a major focus for Democrats and Republicans alike. House Republicans, the opposition party, tried to challenge the Biden Administration’s approach to China, which involves competing with China, cooperating when possible, and confronting them when necessary.[1]

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U.S. Executive Branch Update – October 2, 2023

US executive branch text over image of White House

This report provides a snapshot of the U.S. Executive Branch priorities via daily schedules and the prior day’s press releases.

POTUS’ Schedule*

11:15 a.m. EDT – THE PRESIDENT receives the Presidential Daily Briefing; The Vice President attends | Oval Office

2:00 p.m. EDT – THE PRESIDENT delivers remarks to celebrate the Americans with Disabilities Act; The Vice President and The Second Gentleman attend​ | South Lawn

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Trade Preference Program Revival: Congress Considers GSP, But Provides No Clear Path Forward

On Wednesday, September 20, the House Ways and Means Subcommittee on Trade held a long-anticipated hearing titled “Reforming the Generalized System of Preferences (GSP) to Safeguard U.S. Supply Chains and Combat China.”  In their separate opening statements, both Subcommittee Chairman Adrian Smith (R-NE) and Subcommittee Ranking Member Earl Blumenauer (D-OR) highlighted the evolving landscape of international trade policy since the inception of the Generalized System of Preferences (GSP) in 1974 and stressed the ongoing strategic and economic concerns related to China. Chairman Smith underscored the importance of preserving U.S. production through the exclusion of import-sensitive products within GSP but expressed interest in evaluating the effectiveness of the exclusion process. He criticized the Biden administration for not reducing tariffs to enhance access for U.S. agricultural producers and expressed interest in exploring new criteria for digital trade. Ranking Member Blumenauer (D-OR) specifically called for updates to labor, environmental, and human rights criteria within GSP, as well as addressing rules of origin. Blumenauer also emphasized the need to reauthorize the Trade Adjustment Assistance (TAA) program.

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U.S. Executive Branch Update – September 27, 2023

US executive branch text over image of White House

This report provides a snapshot of the U.S. Executive Branch priorities via daily schedules and the prior day’s press releases.

POTUS’ Schedule*

12:00 p.m. EDT – THE PRESIDENT receives the Presidential Daily Briefing | Fairmont Hotel, San Francisco, California 

2:30 p.m. EDT – THE PRESIDENT holds a meeting with the President’s Council of Advisors on Science and Technology , which develops recommendations on science, technology, and innovation policy  | San Francisco, California

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U.S. Executive Branch Update – September 26, 2023

US executive branch text over image of White House

This report provides a snapshot of the U.S. Executive Branch priorities via daily schedules and the prior day’s press releases.

POTUS’ Schedule*

*The U.S. President (POTUS) and Vice President’s (VPOTUS) daily schedules are subject to change, as is the White House press briefing schedule.

9:00 a.m. EDT – THE PRESIDENT receives the Presidential Daily Briefing | The White House

9:55 a.m. EDT – THE PRESIDENT departs the White House en route to Joint Base Andrews

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U.S. Executive Branch Update – September 25, 2023

US executive branch text over image of White House

This report provides a snapshot of the U.S. Executive Branch priorities via daily schedules and the prior day’s press releases.

POTUS’ Schedule*

*The U.S. President (POTUS) and Vice President’s (VPOTUS) daily schedules are subject to change, as is the White House press briefing schedule.

9:00 a.m. EDT – THE PRESIDENT receives the Presidential Daily Briefing | The White House

10:30 a.m. EDT – THE PRESIDENT hosts a meeting with Pacific Islands Forum leaders for the U.S.-Pacific Islands Forum Summit | East Room

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The India-Middle East-Europe Economic Corridor (IMEC): What We Know and What Comes Next

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In September 2023, select leaders participating in the G20 Summit announced plans to develop the India-Middle East-Europe Economic Corridor (IMEC). The project aims to develop two integrated corridors – one connecting India to the Arabian Gulf, and one connecting the Arabian Gulf to Europe – with new ship-to-rail transit networks, undersea telecommunication cables, and a hydrogen energy pipeline.

While lacking binding agreement at this time, IMEC participating governments – the United States, India, Saudi Arabia, the United Arab Emirates (UAE), the European Union, France, Germany, and Italy – are already touting its potential.

  • Indian Prime Minister Narendra Modi expects IMEC “will drive sustainable development for the entire world.”
  • European Commission President Ursula von der Leyen’s 2023 State of the Union address emphasized the shared interest of the participating governments to make trade “faster, shorter, cleaner.” She anticipates that IMEC “will make trade between Indian and Europe 40% faster.”
  • Saudi Arabia’s Investment Minister Khalid bin Abdulaziz Al-Falih expressed IMEC’s potential “to be more significant and relevant” than the Silk Road “because it’s going to be about new energy, data, connectivity, human resources, aviation routes, and it’s about aligning countries that are of the same mind and same vision.”

As proposed, IMEC could be a boon for the United States, which has long sought to counter the Belt and Road Initiative (BRI) launched by the People’s Republic of China in 2013. The IMEC announcement builds on the G7’s June 2023 pledge to raise $600 billion in private and public funds over five years for infrastructure projects in developing countries to counter BRI, and according to U.S. President Joe Biden demonstrate “the concrete benefits of partnering with democracies.” IMEC’s objective to facilitate hydrogen energy transports also aligns with the United States and EU’s broader strategic interest to transition Europe away from Russian fossil fuels.

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Lack of Consensus, Lapse in Appropriations: Anatomy of a Federal Government Shutdown

The United States Capitol building

The US Constitution provides that “No money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law” (Article I, Section 9, Clause 7). Congress maintains the power of the purse, and federal government agencies and programs reliant on discretionary budget authority experience funding gaps if appropriations expire prior to the enactment of new appropriations measures. With limited exceptions, the Antideficiency Act, court and Department of Justice opinions, and associated guidance generally prohibit continued agency and program operations when funding gaps occur. Should a funding gap last for a day or longer, federal government agencies and programs impacted by the lack of discretionary funds may shut down.

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Congressional Republicans Solicit Comments from Health Stakeholders

The United States Capitol building

Over the past several weeks, Congressional Republicans have indicated they are gearing up to tackle various health policy issues – and have offered health stakeholders the opportunity to provide feedback and their expertise in policy development.

On August 25, Republicans on the House of Representatives’ Committee on the Budget established a “Health Care Task Force.” Chaired by Rep. Michael Burgess, MD (R-TX), the Task Force is charged with “find[ing] solutions to reduce health care spending, examin[ing] opportunities to modernize and personalize the health care system, and support[ing] policies to fuel innovation and increase patient access to quality and affordable care.” The Task Force released an open letter, requesting: (1) feedback on regulatory, statutory, or implementation barriers that could be addressed to reduce health care spending; (2) information on efforts to promote and incorporate innovation into programs like Medicare to reduce health care spending and improve patient outcomes; (3) comments on the Congressional Budget Office’s modeling capabilities on health care policies, including limitations or improvements to such analyses and processes; (4) examples of evidence-based, cost-effective preventive health measures or interventions that can reduce long term health costs; and (5) recommendations to reduce improper payments in federal health care programs. Responses are due October 15, 2023.

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