June 3, 2023

Washington Wire: Supreme Court Hears Vaccine Mandate Rule


Supreme Court Hears Vaccine Mandate Rule

The COVID-19 Vaccination and Testing Emergency Temporary Standards (ETS) is now being enforced by the Occupational Safety and Health Administration (OSHA). An earlier stay on the ETS was lifted by a federal appeals court on December 20. Following the decision, OSHA announced that employers had until January 10 to develop compliant policies and until February 9 to begin testing programs.
On January 7, 2022, the U.S. Supreme Court held oral arguments on the ETS for large employers. In the case, 26 business groups and 27 Republican-led states are asking the Court to stay implementation of the ETS while litigation over its merits continues in the U.S. Court of Appeals for the 6th Circuit.
During argument, the Court's six conservatives expressed skepticism over OSHA's statutory authority under the OSH Act to issue such a broad, health-focused rule, or the agency's argument that it had rationally decided the ETS is necessary to protect workers from COVID-19. Instead, the conservative justices seemed to suggest that only the states and Congress have the authority to craft such broad policy, rather than federal agencies such as OSHA. The Biden administration argued that the OSH Act gives the agency-wide discretion to respond to emergent "grave dangers" facing workers through the issuing of emergency temporary standards. The Supreme Court could issue a ruling any day but most believe by February 9, when OSHA’s testing part of the mandate takes effect.
Regardless of the eventual legal outcome of the ETS, attorneys suggest that businesses with 100 or more workers have the needed policies in place and enforce masking requirements. Employers should review their internal policies and consult with their attorneys to ensure that they are in compliance with the requirements under the ETS. 



Steel and Aluminum Imports from EU Now Under Quotas
President Biden, on December 28, 2021, issued two proclamations formalizing the agreement between the United States and the European Union to replace the 25% steel and 10% aluminum tariffs imposed by the United States under Section 232 with a new Tariff Rate Quota (TRQ) system as of January 1, 2022.
Under the TRQ system, imports of eligible EU steel and aluminum products will enter free of Section 232 tariffs until the quota is reached, after which they will again be subject to the tariffs unless the product has been granted an exclusion. 
The proclamations also state that the U.S. and the EU will continue “negotiations on global steel and aluminum arrangements to restore market-oriented conditions and support the reduction of carbon intensity of steel and aluminum across modes of production.” These negotiations should conclude by October 31, 2023.
To track the status of the TRQ view the U.S. Customs and Border Protection (CBP) weekly Commodity Status Reports at: https://www.cbp.gov/trade/quota/tariff-rate-quotas. Additionally, CBP has posted general guidance on the overall TRQ process at CMS#0536327 – GUIDANCE: European Union (EU) Section 232 Tariff Rate Quota on Aluminum and Steel Articles and Exempting EU from Derivative Duties.
The TRQs on steel and aluminum imports from the EU will remain in place through December 23, 2023.

Mexico Requests USMCA Autos Dispute Resolution Panel
On January 6, 2022, Mexico formally requested a dispute-settlement panel regarding the rules of origin for automotive vehicles under the U.S.-Mexico-Canada Agreement (USMCA). Canada also intends to join with Mexico in the request. 
The conflict focuses on differences over how to calculate the percentage of a vehicle that comes collectively from the three countries. Both Mexico and Canada believe the trade deal stipulates that more regionally produced parts should count toward duty-free shipping than the U.S. wants to allow. Mexico has said the U.S. is not recognizing alternate methodologies for calculating regional value content it contends were negotiated under the deal to help automakers meet regional value content requirements, which were raised from those under the North American Free Trade Agreement. The U.S. however believes that “any interpretation of the automotive rules of origin that effectively reduces the effective regional value content of a vehicle produced in North America runs counter to the goals” of the agreement. 
Under timelines set out in USMCA, the dispute settlement process is scheduled to take approximately five months. The three countries held consultations on the disagreement in August but failed to resolve the issue. 



Vehicle GHG Standards Finalized 
The Environmental Protection Agency has finalized near-term light-duty vehicle greenhouse gas standards. The final rule, published on December 30, 2021, updates the greenhouse gas standards for model year 2023-2026 passenger cars, light-duty trucks, and medium-duty passenger vehicles.
The new standards are more stringent than originally proposed by the administration and reverse the lower levels set by the Trump administration. The final rule contains a significant stepped-up stringency in MY25-26, with "real-world" fuel economy figures at 40 mpg for the final standards in MY26, compared with 38 mpg in the proposal. 
The lower Trump-era emissions standards, known as SAFE standards, were a rollback of Obama administration rules on cars and would have only increased to just 32 mpg in MY26. The new standards are also an increase from the Obama EPA's rules, which would have gotten cars and trucks to 36 mpg.
The tightening standards reflect a push by the Biden administration to shift the U.S. car market towards electric vehicles (EV). EVs and plug-in hybrids accounted for just 2 percent of US vehicle production in 2020, according to an EPA estimate. In the final rule, the EPA projects EVs and plug-in hybrids to make up 17 percent of new sales in MY26.
A coordinated set of updated fuel economy requirements from the National Highway Traffic Safety Administration is expected in the coming months.