February 2025 ADVOCACY UPDATE
How is your business doing? Are there any changes that are impacting your business?
First and foremost, thanks to all who filled out the survey. We have been using your responses to craft our message on Capitol Hill. CEO Jen Earle and Board Chair Dr. Janis Shinkawa will be back in Washington, D.C., the last week of February. If there is something new you want them to discuss with lawmakers, a story you would like to share, or if you would like to be added to our index of potential hearing witnesses, please email epatout@nawbo.org.
You’ve got questions. We’ve got some answers to help clarify.
Understanding executive actions is essential for small business owners to anticipate regulatory shifts and economic trends. Consulting with financial and legal professionals can help ensure compliance and strategic adaptation to these changes. Beyond consulting professionals, we’ve compiled an FAQ to respond to our membership’s inquiries.
What are executive orders, and how do they affect small businesses?
Executive orders (EOs) are legally binding directives issued by the President to federal agencies, impacting regulations, enforcement, and policies. While not direct laws, they influence areas such as labor, trade, and taxation, which may affect small businesses.
How can I stay informed about new executive orders that might impact my business?
You can monitor the White House’s official website, government agency announcements, and industry associations for updates. Consulting with legal or business advisors can also help you navigate any changes.
Can executive orders override existing business laws?
No, executive orders cannot override laws passed by Congress. However, they can influence how laws are enforced or interpreted by federal agencies, which can affect regulations that impact small businesses.
What should small business owners do if an executive order negatively impacts their industry?
Business owners can voice concerns with trade associations (like NAWBO), industry groups, and local representatives. Legal action may also be an option if the EO conflicts with existing laws or constitutional rights.
What are good resources to monitor for interpretations of EOs, OMB memos, and their impact on WOSB and MBE businesses?
Some valuable resources include the Federal News Network, the Small Business Administration (SBA), and agency-specific procurement sites. Regularly checking these sources can help businesses stay informed about regulatory changes.
What is the “Department of Government Efficiency” (DOGE), and how does it impact small businesses?
The DOGE is not a federal agency, nor is it a Cabinet-level department. When the President created DOGE via executive order, he renamed the existing United States Digital Service (USDS), established in 2014 by President Obama. If successful, small businesses interacting with the government (e.g., contracts, grants, and licensing) may experience reduced bureaucratic delays.
How will the “Regulatory Freeze Pending Review” memorandum impact small businesses?
This order halts new regulations until reviewed, which could delay both restrictive and beneficial policies. If your business was awaiting relief from burdensome regulations, this could be beneficial, but it may also slow down needed clarifications or support measures. Shortly after the memo was issued, but before it could take effect, two lawsuits were filed in the federal district courts of Rhode Island and the District of Columbia. Broadly, these lawsuits claim that the memo violates the Administrative Procedure Act and various constitutional provisions. While the federal funding freeze has been paused due to these lawsuits, it is understood that an audit of federal programs continues to be underway.
What does the “America First Trade Policy” mean for small businesses?
This policy prioritizes U.S. industries through trade restrictions and protections. While it may boost domestic production, businesses relying on imports could face higher costs due to new tariffs or trade restrictions.
Will the “Delivering Emergency Price Relief” memorandum help reduce costs for my business?
This memorandum aims to lower costs for essential goods, including fuel and food. The actual impact depends on implementation and regulatory adjustments. If successful, it may reduce operational expenses for small businesses.
Are there executive orders that provide financial relief for small businesses?
Some executive orders focus on economic relief, such as loan programs, grants, or tax incentives. Small business owners should monitor government agencies like the Small Business Administration (SBA) for relevant updates.
How does the “OECD Global Tax Deal” memorandum affect small businesses?
The U.S. aims to keep corporate taxes competitive by rejecting the global tax deal. This primarily affects multinational corporations but could indirectly impact small businesses by influencing supply chain costs and tax policies.
How do new tariffs on China, Mexico, and Canada impact small businesses?
On February 1st, 2025, President Trump called for 25% tariffs on goods imported from Mexico and Canada and a 10% tariff on Canadian energy imports. The President also called for a broad 10% tariff on Chinese goods in addition to existing tariffs. Shortly after calling for tariffs, the President announced the US had reached deals with Canada and Mexico, respectively, to delay the tariffs by one month. Chinese tariffs went into effect, including closing the “de minimis loophole,” which allowed goods valued under $800 to avoid import duties and taxes. The tariffs may raise the cost of goods and materials for businesses that rely on international supply chains. However, domestic manufacturers may see an increase in demand.
Will there be tax breaks for small businesses under recent executive actions?
Some EOs may propose tax relief measures, but Congress must approve actual tax changes. Small business owners should consult tax professionals to understand potential impacts.
What does the “Hiring Freeze” mean for small business contractors?
The federal hiring freeze may delay government contracts and reduce spending on business services, potentially impacting businesses that rely on government work.
How does the “Reforming the Federal Hiring Process” EO impact small businesses?
This EO prioritizes merit-based hiring and aims to streamline federal employment. Small businesses looking to hire talent may benefit from a more competitive labor market as federal job openings slow.
Will executive orders affect the minimum wage for small businesses?
Some executive orders can mandate minimum wage changes for federal contractors, but broader wage increases typically require congressional approval.
Do the executive orders focused on DEI only apply to Minority Business Enterprise (MBE) set-asides and not Women-Owned Small Business (WOSB) -certified small businesses?
Executive Orders on Diversity, Equity and Inclusion, including Ending Radical And Wasteful Government DEI Programs And Preferencing, place emphasis on “merit-based opportunity” and rescind the 1965 Executive Order establishing Affirmative Action in the federal government. While this seems to primarily target MBE set-asides, its broader impact on WOSB-certified businesses remains uncertain. Since Small Business Administration (SBA)-administered set-asides are based on federal statutes, legislative action would be required to eliminate them. However, the SBA holds the authority to modify enforcement and eligibility criteria, potentially affecting both MBE and WOSB participation.
What is the impact of the executive actions focused on DEI on state-based DBE programs that tie into federal agencies?
The DEI EO may influence state-based Disadvantaged Business Enterprise (DBE) programs by encouraging federal agencies, including the Department of Transportation, to reassess their equity initiatives. However, the direct impact on state-level programs will depend on implementation details and state compliance.
What does the “Strengthening American Leadership in Digital Financial Technology” EO mean for small businesses?
This order promotes blockchain technology and digital assets while banning Central Bank Digital Currencies (CBDCs). Small businesses engaging in cryptocurrency transactions may see more regulatory clarity and support for digital payments.
How does the “Removing Barriers to AI Development” EO impact small businesses?
This order encourages AI growth by reducing restrictions. Small businesses in tech and automation may benefit from greater investment and innovation opportunities.
Are there any executive orders related to data privacy or cybersecurity that affect small businesses?
Some executive orders enhance cybersecurity policies, requiring small businesses in specific industries to comply with stricter data security standards. Staying informed on cybersecurity guidelines can help avoid compliance issues.
How will the “Declaring a National Energy Emergency” EO affect small businesses?
This EO may stabilize or lower energy costs by expediting energy projects and resource development. However, environmental regulations and compliance changes could also affect specific industries.
What does the “Temporary Withdrawal of Offshore Wind Leasing” memorandum mean for businesses in renewable energy?
This move halts offshore wind leasing while the government reviews policies. If your business is involved in renewable energy, it may face project delays but could benefit from revised, business-friendly policies later.
Will executive orders impact small businesses’ access to renewable energy incentives?
Yes, Trump’s executive orders paused all federal spending related to the Inflation Reduction Act and Infrastructure Investment and Jobs Act. As a result, renewable energy incentives are paused for small business owners. Other opportunities may be available for small businesses via federal agencies or prior legislation.
Also, if you’re curious about the Small Business Administrator nominee hearing, here is a readout from our partners at PPS.
You can learn more about NAWBO’s Advocacy efforts HERE.
|
