The Hardwood Federation produces a “D.C. Cheat Sheet” newsletter to keep the industry up-to-date on the latest news from Washington D.C. Check out the May 22nd edition below and sign up to receive your copy.
Tax Bill Clears House Hurdle, Now onto the Senate: The House of Representatives voted 215-214 to advance a comprehensive budget reconciliation bill that encompasses GOP policy priorities. As we noted last week, the legislation includes robust tax provisions that revive and extend key business tax benefits, including full expensing, the research and development tax credit and the Section 199A deduction for S-Corporations and pass throughs. Regarding the latter, that benefit was bumped up to 23 percent (from 20 percent) and made permanent. To pay for these provisions and others, a number of tax credits authorized by the Inflation Reduction Act were eliminated after 2025, including the Energy Efficient Home Credit (Section 25C of the Internal Revenue Code).
One other item to note. There is language in the legislation doubling funding for the Market Access and Foreign Market Development programs. The House Agriculture Committee included this language as part of their effort to address some Farm Bill programs as part of this process.
The legislation now proceeds to the Senate where the upper chamber will attempt to revise the measure. Senators have opined that they would like to make full expensing and the R&D credit permanent (the House bill only extends for five years). But given the extremely narrow margin in the House, the bill passed by one vote, it will be interesting to see how the Senate proceeds knowing that significant revisions may disrupt the fragile framework in the lower chamber that enabled this bill to pass.
E.U. Moves on Trade: The European Union Commission announced this morning that the U.S. would be viewed as a low-risk nation for purposes of the E.U. Deforestation Regulation. While this is certainly a welcome development, it does not address the industry’s ongoing concern with the geolocation requirement which is still anticipated to be implemented at year’s end.
In additional news from across the Atlantic, the European Union, offered some specific proposals on food and agriculture standards and mutual recognition agreements. The document sent to Washington also makes an overture on working jointly to combat overcapacity in the steel, pharmaceutical, automotive and semiconductor supply chains. Again, this is a positive step towards negotiating a bilateral trade deal, but the Trump Administration has yet to weigh in on exactly what they are looking for from the E.U. nations. In the event that negotiations stall or do not make adequate progress before the July 9 end to the current pause, the EU is putting together its backup plan that includes $108 billion of additional tariffs in response to Trump’s “reciprocal” levies and 25 percent tariffs on cars and some parts.
More From the Fly-In: On May 13-15, more than 70 members of the U.S. Hardwood industry came together to meet with administration officials and members of Congress. Click here to view pictures of their time on the Hill.
Source: Hardwood Federation