The Changing of the Guard:  What’s in Store With the Return of President Trump

On January 20, Donald Trump will return to office as the 47^th President of the United States accompanied by a Republican-controlled House and Senate, albeit with slim majorities (particularly in the House). Although the first Trump administration taught us to expect the unexpected, President-elect Trump’s track record of lowering taxes and tackling regulatory burdens should signal initiatives that will ultimately benefit the transportation industry.

Republican control of the Senate affords President-elect Trump the opportunity to have most of his Cabinet nominations confirmed expeditiously, though a few may test that theory. His nominee for Secretary of Transportation, former Representative Sean Duff (R-WI), appears to be on a smooth path for confirmation. As of this writing, the President-elect has yet to announce a nominee to serve as Administrator of the Federal Motor Carrier Safety Administration (FMCSA).

Enactment of significant tax relief for individuals and businesses was a signature achievement of the first Trump administration.  Many of the individual provisions are set to expire at the end of 2025, and President-elect Trump has made no secret about his desire to renew and potentially enact additional tax relief. With Republicans in control, Congress can use special budget reconciliation procedures to circumvent a Senate filibuster in order to enact a tax reform package, although prolonged debate amongst Republican leaders over funding tax cuts and suspending the debt limit is expected.

Primarily due to California Air Resources Board’s (CARB) unrealistic emissions regulations and timelines, compounded by the U.S. Environmental Protection Agency’s (EPA) regulatory measures, the trucking industry is facing significant equipment availability challenges. From raw materials to battery production and EV infrastructure, timelines for such standards have been questioned by President-elect Trump, along with the practical application of such standards to heavy duty trucking.  President-elect Trump’s track record and his nomination of former Representative Lee Zeldin (R-NY) to head EPA suggests the Trump era EPA will rein in the forced and impractical transition to zero-emission trucks.

Despite growing support of candidate Trump by pro-labor voters and the nomination of former Representative Lori Chavez-DeRemer (R-WA) to head U.S. Department of Labor (DOL), the DOL is unlikely to deviate from the first Trump administration’s approach favoring a simpler, more predictable test for determining worker status under the Fair Labor Standards Act. As has been the case over the past several changes in administrations, President-elect Trump will have the opportunity to appoint a Republican majority to the National Labor Relations Board (NLRB), which should check some of the more pro-union measures adopted by the Biden-era NLRB. There appears to be insufficient support for the PRO Act (with its ABC test) in the Senate, and Chavez-DeRemer’s prior support of the PRO Act will likely not be relevant during the upcoming administration.

During his first administration, President-elect Trump was committed to eliminating regulatory burdens. This included an Executive Order requiring the elimination of two regulations before a new regulation could be adopted. President-elect Trump has suggested the ratio should be increased (even suggesting it should be ten to one). For certain Biden-era regulations finalized after August 2024, Congress and President-elect Trump may opt to utilize the Congressional Review Act to overturn them. During his first term, President Trump and the Republican Congress overturned 16 regulations using this procedure (in comparison to President Biden and the Democrat-controlled Congress which used it three times).

While the Firm expects a deregulatory push, assisted by the work of the newly formed Department of Government Efficiency task force, many of these deregulatory measures may be subject to challenges in the courts. In addition, blue states will likely be active in furthering their policy preferences at the state level. At the least, the Firm can safely predict that it will be an interesting Presidential term ahead.

Truck Emissions

The California Air Resources Board (CARB) has promulgated regulations, including the Advanced Clean Trucks (ACT) regulation and the Omnibus regulation, that have caused truck manufacturers to severely restrict the availability and sale of new diesel trucks in California.  A number of states have adopted these CARB regulations, as permitted under the Clean Air Act. CARB has also promulgated an Advanced Clean Fleets (ACF) regulation, the counterpart to ACT requiring motor carriers to purchase zero-emission trucks as part of their California fleet, but the regulation must first receive a waiver from the U.S. Environmental Protection Agency (EPA) before becoming enforceable. The EPA finalized a rule in early 2024 that would essentially force a transition nationwide to zero-emission trucks, albeit on a more flexible and slightly less stringent scale than CARB’s ACT regulation. These efforts were emboldened by an actively supportive Biden administration.

President-elect Trump, on the other hand, has emphasized the continued importance of fossil fuels, supported increased fossil fuel production, and has opposed a mandated transition to electric trucks. In his first administration, then President Trump, for the first time ever, rescinded a waiver previously granted to CARB by the EPA.  The industry expects President-elect Trump to use a variety of tools to ease the pressure on trucking companies created by mandated transitions to electric trucks that are unrealistic given electricity generation challenges, vehicle and battery range limitations, and nonexistent charging infrastructure.

DOT and FMCSA Nominees

President-elect Trump has nominated former U.S. Representative and Fox Business host Sean Duffy to head the Department of Transportation. Industry groups have responded favorably to Duffy’s nomination and are hopeful he can navigate what promises to be a full plate as Transportation Secretary. In addition to overseeing projects resulting from 2021’s infrastructure bill, Duffy will be tasked with addressing chronic problems in air travel, developing federal policy regarding automation at ports and autonomous vehicles, and reauthorizing federal surface transportation programs. Duffy’s tenure as a U.S. Representative and his lobbying experience after his exit from the House should give him an advantage in navigating these issues as the head of the DOT. President-elect Trump has not yet named a nominee for the position of FMCSA Administrator. This nominee’s priority list should likely include evaluating proposed changes to the FMCSA’s Safety Measurement System (SMS) methodology, treatment of autonomous CMVs, and rules governing speed limiters.

State Developments

While most attention has been placed on the federal election results, the results of state and local elections can often have a more immediate and direct impact on the transportation industry. Eleven states held gubernatorial elections in November, and 85 legislative chambers in 44 states also held elections. Despite these widespread elections, there was little partisan shift at the state level (only two state legislative chambers changed partisan control in these elections, while none of the gubernatorial elections shifted party allegiance).  This continuity indicates that significant policy shifts are unlikely at the state level but may occur in response to or in support of federal developments.

DOL Contractor Rule

In the waning days of the first Trump administration, the U.S. Department of Labor (DOL) finalized a regulation establishing the test to be used by DOL to determine whether a worker is an independent contractor or employee under the Fair Labor Standards Act, which governs overtime and minimum wage. That regulation set forth a multi-factor test that emphasized two core factors that made the determination more predictable. The Biden administration replaced the DOL regulation with an equally weighted, multi-factor test but included commentary that leans toward a finding of employee status.

President-elect Trump’s Secretary of Labor nominee will take over at a time where the newer Biden administration rule is embroiled in legal challenges. The President-elect may have multiple paths toward reinstituting a simpler, more predictable test favored by businesses.

Spotlight: Legislative Services

Small changes in laws can sometimes mean big changes to a company’s daily operations. Scopelitis recognizes how much our country’s rapidly changing political climate can impact our clients. Businesses that stay abreast of these issues can implement policy changes ahead of time or be agile with strategic responses. Experience has taught the Firm that frequent changes in the following areas of the law can have an immediate impact on many of our clients:

• Wage and Hour issues
• Labor and Employment issues
• Safety issues
• Business and Contractual issues
• Emerging Technologies issues

A customized legislative solution is often the best approach to understanding how national, state, and local policies and regulations stand to affect your operations. As part of our legislative counseling services, Firm attorneys can prepare customized, real-time, action-oriented, digestible updates or products designed to keep you abreast of the latest legislative developments presented in a format that is tailored for your business needs and may include strategic counseling and advice on the most effective method to respond to legislative developments that may impact your operations.

While knowing when to react to legislative and regulatory developments is vital to our clients, we believe the best approach is one that also includes proactive thought and strategies to keep business leaders engaged with policymakers. Attorneys in our D.C. office and beyond routinely assist clients in exploring important industry and company issues with government agencies.

Our work in developing an effective overall strategy for achieving regulatory or policy objectives often includes preparing effective presentations for meetings with government officials, developing talking points for industry meetings and presentations, identifying decision-makers, and arranging meetings with those individuals or coalitions.

For additional information, contact the Scopelitis legislative team to further explore how we may provide the most well-tailored service to ensure legislative and regulatory developments do not become a surprise or leave your company behind.

Scopelitis Quarterly Headline Roundup: January 2025

A roundup of this quarter’s headlines authored by or featuring Scopelitis attorneys:

• FleetOwner: What happened with small carriers’ beneficial ownership information?
• Case Note: New Year, New Me? Not Quite – Seventh Circuit Reaffirms Its Position with Broker Liability Claims.
• Port Strike Likely Averted: Labor Deal Reached
• Regulatory Update: Forwarders Handling Air Cargo Face Increased Civil Penalties