Federal Policy Update: Tariffs | Federal Funding | Executive Orders

Trump Administration Policy Update
Since President Trump's inauguration on January 20, several federal policy changes have been enacted through Executive Orders affecting international trade, federal funding, and immigration. To effectively support and advocate for the region’s businesses, Commerce Lexington is actively evaluating these developments. We welcome your feedback and guidance on next steps. Your input is critical to our assessment of these policies and their impact on businesses, employees, customers, and the regional economy. 

Tariffs:
On February 1, 2025, The Trump Administration issued 25% tariffs on all goods imported from Mexico and Canada, and a 10% tariff on all imports from China. Yesterday, the President reached agreements with Mexico and Canada to pause tariffs until March. Last night, the tariffs on products imported from China went into effect and were met with an immediate response. China has now imposed tariffs on U.S. coal, gas, and other goods, as well as restrictions on some exported minerals.

We appreciate the U.S., Mexico, and Canada coming to agreements to pause tariffs until March however, we remain concerned with the impact the Chinese tariffs will have and what will happen over the next month. If additional tariffs are enacted, these duties will undoubtedly raise costs for almost every Lexington business and are likely to impact consumers directly. Commerce Lexington supports open trade policies with promising markets abroad and removing barriers that shut U.S. exports out of foreign markets. The business community remains concerned about trade and tariff policies that have a negative impact on the region’s industries, including agriculture, equine, advanced manufacturing, and bourbon. These impacts include supply chain disruptions, increased costs for parts, equipment and supplies, and competitive disadvantages in the marketplace due to increased manufacturing costs.

As we continue to learn more about these impacts, please reach out if Commerce Lexington can help connect you with any new, local suppliers that can mitigate price increases your industry might encounter. We continue to work closely with our partners at the U.S. Chamber and Kentucky’s federal delegation to minimize the impact on businesses. HERE is a link to a White House fact sheet summarizing the newly imposed tariffs. 

Broad federal funding pause rescinded but Executive Orders continue to impact other programs:
On Monday, January 27, the Trump Administration’s Office of Management and Budget (OMB) released a memo that temporarily paused a majority of federal financial assistance and funding to align existing initiatives and programs with the President’s policies and priorities. Due to its broad applicability and multiple pending lawsuits,  the OMB rescinded the memo on January 29. No further action has been taken by the Trump Administration to reinstate or issue a new memo pausing federal funding. However, the White House Press Secretary clarified that the President’s Executive Orders pausing foreign aid and ending diversity, equity, and inclusion (DEI) programs remains in effect.
 
Engaging Lexington’s federal representatives is key to feedback in Washington. You can reach U.S. Representative Andy Barr, Senator Mitch McConnell, and Senator Rand Paul at these links.
 
If you have questions, feedback, or recommendations regarding these updates, please feel free to reach out to Commerce Lexington’s policy team, Andi Johnson or P. Anthony Allen.