Weekly Digest: “Liberation Day”, Florida Special Election, and 199A Provision

On April 2, President Donald Trump issued a series of executive orders (EOs) to impose reciprocal tariffs on select countries and revoke China’s eligibility for the de minimis exemption. The long-previewed actions fulfill a key campaign promise and build on the president’s efforts to reform U.S. trade policy to address trade imbalances and unfair trade practices.

The revocation of China’s eligibility for the de minimis trade privilege ends the previously imposed pause on the action, and the EO outlines a structure for the imposition of duties on impacted shipments from China.

 

On April 1, Florida held a special election to fill the vacant seats of former Reps. Matt Gaetz (R-FL-01) and Michael Waltz (R-FL-06), who both resigned to join the Trump administration. Republicans successfully retained control of the seats, with former state Chief Financial Officer (CFO) Jimmy Patronis winning in Florida’s 1st District and former State Sen. Randy Fine prevailing in Florida’s 6th District. Both candidates secured victory by approximately 14 points. However, Republicans faced some uncertainty, as the Democratic challengers significantly outraised their Republican opponents in these traditionally red districts. Despite this, strong backing from President Trump helped unite Republican support behind Fine and Patronis, bolstering Speaker of the House Mike Johnson’s (R-LA) majority.

The arena of tax policy rarely excites people, but here’s a case in which the expiration of a single provision, something called the 199A deduction, would be felt not only on the shop floor, but at every kitchen table in America.

Unless Congress acts to save it, we are about to sunset a tax policy that has helped to stimulate nine-out-of-ten American businesses and has supported millions of jobs.

The 199A provision was part of the Tax Cuts and Jobs Act of 2017. It has allowed pass-through businesses to employ a 20 percent tax write-off. The 199A provision has tremendously helped “S” Corporations, partnerships, and LLCs that provide the largest number of jobs in the United States.