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Trump and ‘Liberation Day’: Beyond tariffs

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US President Donald Trump has challenged the global trade order by imposing tariffs on goods imported into the US.

Trump said on Wednesday that a 10% tariff would be imposed on nearly all imports entering the US starting April 5, describing these measures as a way to “liberate” the US economy.

The White House also unveiled sweeping “reciprocal” tariffs on goods from the US’s largest trading partners, targeting a global trading system that, according to Trump, has “ripped off” the United States for decades.

Historically, the term “reciprocal” in trade refers to measures taken by both sides to ensure fairness in bilateral agreements. For much of the past 90 years, this typically involved reducing trade barriers. In the US, the Reciprocal Trade Agreements Act of 1934 signaled the end of an era of US protectionism, enabling the US and partner countries to negotiate lower tariffs on each other’s goods.

Under the new plan, tariffs on goods from China, the world’s largest exporter, will rise to 54%, reflecting an additional 34% tariff imposed by Trump on top of the existing 20% levied earlier this year.

The EU faces tariffs totaling up to 20%, while imports from Japan, a close Washington ally, will be subject to 24% tariffs. UK exports will incur a 10% tariff.

Tough measures on Asian countries

A 10% base tariff applies to imports from all countries. Beyond this, “individualized reciprocal higher tariffs” are planned for the 60 countries identified by the US as the “worst offending” due to their large trade deficits with the US. These reciprocal tariffs will range from 10% to 50%.

The specific tariff rate is calculated based on the White House Council of Economic Advisers’ assessment of the combined tariffs and non-tariff barriers imposed on US goods by a given country. Half of this assessed level will be applied as the reciprocal tariff rate for imports from the 60 designated “worst offending” countries.

Several Southeast Asian export hubs face tariffs approaching 50%. Cambodia is assigned a rate of 49%, Laos 48%, and Vietnam 46%.

Other countries facing tariffs above 40% include Sri Lanka (44%), Madagascar (47%), and Myanmar (44%). Saint Pierre and Miquelon, a small French territory off the coast of Newfoundland, Canada, is subject to a 50% tariff.

The high tariffs targeting several Asian countries are partly attributed to China shifting production to these nations, which then serve as conduits for exporting goods to the US.

Mexico and Canada, despite being frequent targets of Trump’s criticism, will be exempt from these new reciprocal tariffs. However, the existing 25% tariff on goods non-compliant with their 2020 trade agreement with the US remains effective.

The White House stated that cars and auto parts subject to the 25% tariffs announced last week will be exempt from the new reciprocal tariffs.

Bullion, energy resources, and minerals not domestically available in the US are also exempt from reciprocal tariffs. Additionally, semiconductors, pharmaceuticals, copper, and lumber will not be subject to these specific tariffs.

However, this exemption contrasts with previous actions and statements by Trump, who had already announced tariffs on copper and lumber and indicated potential tariffs on pharmaceuticals and computer chips.

Trump declares national emergency

The US President invoked emergency powers to implement the new tariffs. The administration declared a national emergency, citing “national security and economic security concerns arising from conditions reflected by large and persistent annual US goods trade deficits”.

US officials announced that the initial tariffs will take effect shortly. The basic 10% tariff is scheduled to begin at 00:01 on Saturday, April 5, with the higher reciprocal tariffs following at 00:01 on Thursday, April 9.

Negotiating exemptions or reductions might be possible, contingent on Trump’s discretion. The decree announcing the tariffs states that the president “may reduce or limit the scope” of the duties if “any trading partner takes significant steps to correct non-reciprocal trade arrangements and adequately align with the United States on economic and national security matters.”

However, US officials indicated a current focus solely on implementation. A senior White House official told the FT, “Of course countries want to see what they can do for more reciprocal trade. Right now, we’re focused on enacting the tariff regime.”

What is the purpose of tariffs?

Reducing the US trade deficit is a long-standing goal for Trump. In his Rose Garden speech, the president stated that he has advocated for this for over 40 years.

Administration officials attribute the erosion of manufacturing capabilities, wage depression, and the “transferring assets into foreign hands” to the US’s “massive” and “chronic” trade deficits.

Another objective is to compel companies to relocate production to the US. Trump anticipates that businesses will establish plants domestically to circumvent tariffs, thereby creating more jobs.

A US official said, “The goal is to restore American greatness and prosperity for everyday American workers in their communities.”

Correcting “unfair trade practices” is also cited as a goal. White House officials stated that Trump “has been clear for decades about his commitment to correct unfair trade practices by foreign trading partners, both friendly and hostile.”

While not explicitly cited by US officials as a primary justification, the tariffs are expected to generate significant revenue. Officials estimate the duties could bring in “hundreds of billions of dollars in any given year” or “trillions over a 10-year period,” potentially offsetting steep tax cuts.

Tariffs and beyond: A systemic shift

While Trump’s speech centered on tariffs and the potential for trade wars, it signifies the strengthening of a trend originating in his first term and partially maintained under President Joe Biden.

Essentially, Trump’s “protectionist” economic policies stem from the belief that the era of free markets and globalization—often termed the “Washington Consensus”—now disadvantages the US.

Trump said in his speech, “Foreign trade and economic practices have created a national emergency,” arguing that the US has now achieved “economic independence” and that his goal is to bolster the US’s international economic standing and protect its workers.

Trump’s executive order contends that the US’s large, persistent annual trade deficits have hollowed out the manufacturing sector, disincentivized the expansion of advanced domestic manufacturing capacity, weakened critical supply chains, and increased the defense industry’s reliance on foreign adversaries.

Trump emphasized that the trade imbalance has fueled a large and persistent deficit in both industrial and agricultural goods, shifted production overseas, “empowered non-market economies” like China, and ultimately harmed the American middle class and small towns.

The order stated, “These tariffs are intended to address inequities in global trade, bring manufacturing back home and spur economic growth for the American people.”

Trump highlighted the decline in the US share of global manufacturing output, noting it fell to 17.4% in 2023 from 28.4% in 2001. He said, “The decline in manufacturing output has reduced US manufacturing capacity. The need to maintain a robust domestic manufacturing capacity is particularly acute in advanced sectors such as automobiles, shipbuilding, pharmaceuticals, transportation equipment, technology products, machine tools, and basic and fabricated metals, where the loss of capacity could permanently weaken US competitiveness.”

In this context, the presidential order lists the “Golden Rules of the Golden Age” as follows:

— Access to the US market is a privilege, not a right.

— The US will no longer put itself last in international trade matters in exchange for empty promises.

— Reciprocal tariffs were one of the main reasons why Americans voted for President Trump; they were a cornerstone of his campaign from the start.

— Everyone knew that he would push for it as soon as he took office; it was exactly what he promised and it was one of the main reasons why he won the election.

— These tariffs are at the center of President Trump’s plan to reverse the economic damage left by President Biden and put America on the path to a new golden age.

— This plan is part of a broader economic agenda focused on energy competitiveness, tax cuts (including eliminating taxes on tips and Social Security benefits), and deregulation aimed at increasing US prosperity.

Declaration of the bankruptcy of the post-World War II order

He said, “For decades, our country has been looted, pillaged, raped and plundered by friend and foe alike, by nations near and far. Foreign crooks have looted our factories and foreign scavengers have torn apart our once beautiful American dream.”

He also saluted the American steelworkers, autoworkers, farmers and artisans in the audience.

Trump said, “I think this is one of the most important days in American history. This is our declaration of economic independence.” He argued that for years, “hard-working Americans” were sidelined while other nations prospered, but now it was the US’s turn. “Today we stand up for the American worker and finally put America first,” he added.

The President declared in a speech infused with American dream rhetoric, “April 2, 2025 will forever be remembered as the day American industry was reborn, America’s destiny was reclaimed, and we began to make America rich again.”

US embassies issue ultimatums to European companies

Even before the tariff announcement, the Trump administration took steps impacting US trade relations, extending beyond typical commercial diplomacy.

Last week, the Trump administration reportedly attempted to compel European companies to adhere to specific US domestic policies, an action highlighted by a letter sent from the US embassy in France to French businesses.

The letter, sent by the US Embassy in Paris to dozens of major French companies operating in the US, was first reported on Friday by the French business daily Les Echos.

According to reports, the letter stated that Executive Order 14.173, aimed at ending “unlawful discrimination” and restoring “merit” in business, is “equally binding on all suppliers and service providers to the US government,” including French companies, irrespective of their nationality or location of work.

The term “unlawful discrimination,” in the context of the Trump administration’s policy, refers to Diversity, Equity, and Inclusion (DEI) programs, which the administration has moved to dismantle within the US and is now reportedly pressuring foreign companies to abandon.

The letter included a form requesting that affected companies detail their plans for implementing the executive order.

The Financial Times (FT) reported on Friday that US embassies in Belgium and several Eastern European countries sent similar letters to companies in those nations.

The US initiative provoked strong reactions. The French Trade Ministry said in a statement late last week, “US interference in the inclusion policies of French companies is unacceptable.” The ministry asserted that French law, including regulations on inclusion, continues to apply within France.

On Monday morning, French Trade Minister Laurent Saint-Martin expressed his “deep shock” and cautioned against violating French laws and “values.”

Patrick Martin, President of the French business association Medef (Mouvement des entreprises de France), previously stated that abandoning existing inclusion rules was “out of the question.”

Amir Reza-Tofighi, President of the CPME (Confédération des petites et moyennes entreprises), described the move as an “attack on the sovereignty” of France and urged relevant parties to “stand up together” against this US pressure.

The action also drew protests in Belgium. Minister Maxime Prévot called the stance in the US letter “deeply regrettable” and declared that Belgium “will not back down an inch” regarding the principle of social diversity.

Washington’s attempts to compel European nations to adopt specific US regulations are not entirely unprecedented. For years, the US has employed extraterritorial sanctions—coercive measures requiring compliance from companies in third countries to avoid penalties.

What distinguishes this instance, however, is the administration’s attempt to impose domestic regulations—specifically those concerning DEI, which are contentious within the US itself and potentially divisive in Europe—onto European companies.

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The system that needed Lindsey Graham

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Thomas Karat, behavior analyst

The senator died Saturday night of an aortic dissection, at seventy-one, in the middle of a campaign for a fifth term. His communications director cited the medical examiner’s preliminary finding: a rupture in the body’s largest artery, the consequence of arteriosclerotic cardiovascular disease. The tributes arrived within hours. Trump called him a true American patriot. Volodymyr Zelensky, who had met him twice in the preceding week, called him a friend who was there when it was needed most. Mark Rutte and Benjamin Netanyahu sent their own. Roger Wicker, chairman of the Armed Services Committee, said there were no words to describe Graham’s impact on the foreign and domestic policy of the United States.

There are words. The obituaries have chosen the wrong ones, and in doing so they have skipped the only question worth asking about a man like this. Not whether he was sincere in his convictions — he was, exhaustingly so — but how a senator whose reflexive answer to every foreign crisis was force spent twenty-three years being handed the committee seats, the airtime, and the ear of four presidents that let him act on it. Graham was not an aberration the system tolerated. He was a product the system manufactured, promoted, and kept in stock because he was useful.

Consider the shape of the career. In March 2003, as the bombs fell on Baghdad, Graham told the country that past disagreements should give way to a shared commitment to see the effort through. The war he blessed that day killed more than a quarter of a million Iraqi civilians by the most conservative direct-death counts, birthed the insurgency that became ISIS, and left the country a wreck. He drew no lesson from it. When Libya was broken open in 2011 and left to its warlords, he had backed the intervention. When Syria was pulled apart, he had wanted deeper involvement. Across two decades, the country would be devastated, and Graham’s response to each devastation was to locate the next one.

By February of this year the next one was Iran. On the twenty-sixth, under his own Senate letterhead, Graham published an essay that reads now like a confession left in plain sight. Iran, he wrote, was facing a Berlin Wall moment. The regime was at its weakest point since 1979, and his ultimate hope was that regime change would be achieved. He described the October 7 attacks, in his own phrasing — as a silver lining, because the Israeli campaign that followed had degraded Iran’s military. He praised Trump for pursuing, in his words, peace, not war, in the same paragraphs that celebrated a bombing campaign already under way. The strikes had a name: Operation Midnight Hammer. Graham called it the largest opportunity for peace and prosperity in the Middle East in over a thousand years.

He said the quiet part in Tel Aviv, to reporters, on February 16, less than two weeks before the strikes began. The United States was on the verge of eliminating the largest state sponsor of terrorism in the region. On Fox News, days into the war, he offered the ledger in its rawest form: when the regime goes down, he said, there would be a new Middle East, and the United States would make a tremendous amount of money. Venezuela and Iran held nearly a third of the world’s known oil reserves, he noted, and the point of the exercise was a partnership with those reserves. Regime change as a real-estate transaction. He had made the trip to Israel, the UAE, and Saudi Arabia the week before to reaffirm, he wrote, that all of it was attainable and would be extremely beneficial to the United States. Weeks earlier he had met with Mossad, telling reporters they would tell him things his own government would not.

None of this cost him anything. That is the part the eulogies cannot hold in view, because to hold it in view is to indict the institutions doing the eulogizing. A senator who spent a career being wrong about the consequences of American force — wrong about Iraq, wrong about Libya, wrong about what would follow the fall of every regime he wanted to fall — was never demoted for it. He was promoted. The record of his committee assignments tells the story in the driest possible language. For years he sat on the Armed Services Committee, from which he lectured the Senate that its love for the troops bought nothing, that only appropriations did, that a colleague worried about the budget was out of touch with the world. By the time of his death he chaired the Budget Committee and sat on Appropriations — the panels that write the numbers and bless the spending. The man who wanted every war was placed, again and again, on the committees that pay for them.

Follow the money and the shape sharpens further. Graham’s donors, across a career documented in Federal Election Commission filings, clustered where his positions pointed. The defense contractors — the makers of the aircraft, the missiles, the systems — routed money to his committees and his leadership PACs. The specific career totals sit behind a paywall that blocks automated verification, and so no single figure belongs in this account. But the pattern needs no exact number to be legible. A senator who votes for every weapons system, who calls insufficient defense spending an emergency, who treats the reduction of the military budget as a moral failure, is a senator worth funding for the people who build the weapons. The contributions were not a bribe. They did not need to be. They were an investment in a man who already believed, and who sat where belief could be converted into contracts.

The media completed the machine. Graham was a fixture of the Sunday shows and the cable green rooms for a reason that had nothing to do with wisdom and everything to do with format. He was quotable, available, and reliably hawkish, which made him the perfect guest for programs that reward certainty over accuracy and confrontation over reflection. The pipeline ran in both directions. The airtime made him a national figure, and being a national figure got him more airtime, and the whole apparatus rewarded the escalation it claimed only to be covering. When he called for bombing Iran regardless of Iran’s involvement in a given attack, and told Israel to finish the job, the remarks drew condemnation abroad and bookings at home. The market for a war hawk was deep, and he supplied it.

What made Graham durable was that his convictions never had to survive an election of ideas, only the tolerance of the institutions that housed them. He denounced Trump in 2015 as a race-baiting xenophobic bigot and a jackass, and by his second term was among the president’s most consistent defenders, having discovered that proximity to power mattered more than the content of the man wielding it. The pitch that helped start this year’s war was delivered, according to reporting on the strikes, over rounds of golf. Iran was a spoiler for everything Trump wanted, Graham told him; collapse the regime and it would be Berlin Wall stuff. The president was persuaded. The bombs fell. And when a reporter asked Graham what the plan was for the day after — the question that Iraq should have burned into every hawk in Washington — he answered that it was not his job to know. The future of Iran, he said, was for the Iranian people to determine. He had wanted the war. The consequences belonged to someone else.

That was always the arrangement. The wars were his to advocate and never his to own. He would appear on the morning shows to demand them, sit on the committees to fund them, take the money from the firms that profited from them, and when they curdled into the next disaster he would be on television again, demanding the next one, his authority somehow enhanced rather than diminished by the wreckage behind him. This is not the biography of an outlier. It is the biography of an incentive structure, wearing a man’s face.

He died with the seat already in motion. Within hours, before any burial, the reporting had turned to the scramble to replace him, to the governor who will name a temporary successor, to what his absence means for a Republican majority counting every vote. Trump told NBC he already had someone in mind. The machine that made Lindsey Graham did not pause to mourn him. It began, immediately, to fill the vacancy — because the position he occupied was never really about the man. It was about keeping the seat filled by someone who would say what he said. There is no shortage of applicants. That is the dread the eulogies are built to keep you from feeling. He is gone, and nothing that produced him has changed.

***

Thomas Karat has spent a career in multinational technology corporations and is a behavior analyst holding a Master’s in Science and Communication from Manchester Metropolitan University. His work focuses on the psychology of language in power dynamics, and his graduate thesis examined linguistic deception markers in high-stakes business negotiations. He hosts a YT podcast, SaltCubeAnalytics, and publishes at karat.substack.com

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Trump financial disclosures show millions invested in major defense contractors, analysis reveals

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US President Donald Trump’s financial disclosures released last week reveal that he has invested millions of dollars in approximately a dozen companies, including weapons manufacturers and defense contractors, according to a news analysis by Responsible Statecraft. The analysis shows that Trump, through investment firms representing him, acquired shares in defense sector companies valued at a total of between $9.7 million and $24.3 million.

The companies receiving investment included Palantir, Lockheed Martin, and General Dynamics.

According to the financial disclosures, the investment firms managing Trump’s assets invested between $1.6 million and $3.9 million in the data analytics and artificial intelligence company Palantir.

The analysis noted that Palantir developed the AI-powered Maven Smart System, which is utilized in US military operations in the war with Iran. The same analysis also claimed that the company contributed to the development of software named “Big Daddy,” which is used in Israeli military operations in Gaza.

Trump’s portfolio also includes shares in Boeing. The analysis stated that Boeing sold F-15 fighter jets valued at $8.6 billion to Israel less than three months before Trump and Israeli Prime Minister Benjamin Netanyahu initiated their joint war against Iran.

According to the financial disclosures, Trump also invested in GE Aerospace, Lockheed Martin, General Dynamics, and RTX, the manufacturer of Tomahawk missiles.

The analysis wrote that weapons produced by these companies were heavily used in the war with Iran, including Tomahawk missiles used in a US Air Force strike on a primary school in the Iranian city of Minab. The report stated that at least 168 children lost their lives in this attack.

According to Responsible Statecraft, the majority of these companies received new contracts from the Pentagon aimed at replenishing US missile stockpiles depleted during the war with Iran.

RTX signed a $373 million contract for 23 Standard Missile-3 IB interceptor missiles, while Lockheed Martin was reported to have secured a $35 billion contract intended to quadruple its production of the THAAD missile defense system.

The financial disclosures showed that Trump’s investment firms also invested in shares of Kratos Defense, Honeywell, Howmet Aerospace, L3Harris, and TransDigm.

Responsible Statecraft noted that the shares of these companies gained significant value within a year of Trump returning to office. According to the analysis, in 2025, Palantir shares rose by 135%, Kratos shares by 188%, GE Aerospace shares by 84%, and RTX shares by 61%.

In April, Trump posted on Truth Social, stating: “Palantir Technologies has proven to have very powerful capabilities and equipment on the battlefield. Ask our enemies!” Following the post, the company’s shares reportedly rose by approximately 3% within a few minutes.

Financial records showed that Trump generated more than $2 billion in income in 2025. Responsible Statecraft wrote that this amount is “unprecedented” for a sitting US president.

According to the report, the majority of this income was derived from investments linked to cryptocurrency companies such as World Liberty Financial and Binance. Trump reportedly earned hundreds of millions of dollars from “memecoins” launched through these companies, though these crypto assets later suffered sharp declines in value, resulting in losses for numerous investors.

The analysis stated that Tahnoun bin Zayed al-Nahyan, the UAE National Security Advisor and brother of the UAE President and Foreign Minister, invested $500 million in World Liberty Financial and $2 billion in Binance. Trump subsequently approved the export of advanced AI chips to the UAE, a decision that the analysis indicated created the impression of being linked to the crypto investments.

According to the analysis, Donald Trump Jr. is also connected to companies operating in the unmanned aerial vehicle and defense technology sectors. Trump Jr. is a major shareholder and advisory board member at Unusual Machines, which manufactures drone components, while his investment firm also holds stakes in Powerus and Vulcan Elements, both of which hold Pentagon contracts.

Trump Jr. serves on the board of Powerus, which markets drone systems used to intercept Iranian missiles to Gulf countries, and Eric Trump is reported to hold a financial interest in the same company.

Richard Painter, who served as the chief White House ethics lawyer during the George W. Bush administration, evaluated the situation, saying: “These countries are under great pressure to buy from the president’s sons. In this way, the president will do what they want.”

When asked last year about potential conflicts of interest arising from Trump’s business activities, White House Spokesperson Anna Kelly responded: “There are no conflicts of interest.” Trump also acknowledged the existence of conflicts of interest in an interview with the New York Times earlier this year, but argued they were not important, saying: “I realized that nobody cares.”

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US Democrats split over proposed data center moratoriums amid rising energy and climate concerns

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Democrats in the United States increasingly view the rapid expansion of data centers as a critical challenge, yet the party remains deeply divided over how to address the issue.

For many Democrats, the immense energy consumption of these facilities—which drives up household electricity bills and exacerbates climate change—makes some form of restriction an inevitable policy option. The growing public unpopularity of these centers raises the political stakes for Democrats, who are seeking solutions to protect their prospects in this year’s midterm elections on promises of lowering the cost of living.

Last month, Representative Frank Pallone Jr., the top Democrat on the House Energy and Commerce Committee, called for a moratorium on data center construction. However, senior party leadership has shown little enthusiasm for the proposal.

These internal divisions are also playing out at the state level, where at least two Democratic-controlled legislatures have passed data center moratoriums. One of those measures was vetoed, while the other is currently awaiting the governor’s signature.

Support for restricting data centers does not align strictly along traditional ideological lines. A faction of anti-establishment Republicans has backed such efforts, while other members of the Republican Party continue to debate how, or even if, to regulate the massive server farms powering the artificial intelligence boom.

In Congress, Democratic leaders have repeatedly argued that data centers must pay their fair share of rising energy costs.

Earlier this year, Senate Majority Leader Chuck Schumer stated that Democrats would push for “strong, enforceable consumer protections.”

Similarly, House Minority Leader Hakeem Jeffries expressed support for technological innovation while emphasizing, “We must ensure we are protecting the American consumer.”

However, neither leader has endorsed a specific legislative proposal to achieve these objectives. Requests for comment sent to the offices of Schumer and Jeffries went unanswered.

Jeffries also told Politico that halting data center development is “certainly not a position I am articulating at this time.”

In contrast, influential progressive figures, including Senator Bernie Sanders and Representative Alexandria Ocasio-Cortez, argue that a total moratorium on data center construction is necessary.

In March, these lawmakers introduced legislation that would ban the construction of new data centers until Congress enacts a suite of AI safety measures, ranging from government audits of AI models to protections against mass layoffs.

Pallone voiced strong support for the concept last month during a subcommittee hearing on a separate data center bill, stating he favored “a national AI data center moratorium until we can figure out a way that this is not going to harm our nation’s air, water, and utility bills.”

Following his remarks, Pallone added: “The reality is that everything with these data centers is moving so quickly, and I am concerned about the impact on electricity consumers and the environment.”

The Data Center Coalition, an industry group backed by several major technology companies, argued that a national moratorium would deter investment in the US, damage the economy, and “send the wrong message to other industries.”

“A federal mandate to halt data center construction risks restricting access to cloud and digital services, undermines our global competitiveness, and would have significant consequences for Americans’ daily lives,” the group said in a statement in late June.

Maxwell Shulman, a policy research analyst at Beacon Policy Advisors, suggested that the primary force driving the recent push for moratoriums is a “general hostility toward AI and Big Tech.”

“People see many of these changes. They are worried about AI. They are worried about the economy and their jobs, and they feel there is very little they can do about it,” Shulman said. “They view data centers not only as the physical embodiment of AI, but also as one of the rare areas where they can actually have a say or fight back.”

Shulman added: “I think moratoriums are a blunt but effective tool to demonstrate this opposition or concern toward AI in general, not just data centers.”

Meanwhile, a narrower, bipartisan bill has been gaining momentum in Congress.

The Electricity Consumers Protection Act, led by Representative Kathy Castor, a Democrat, and Representative Gabe Evans, a Republican, would require state utility regulators to establish rules ensuring that ordinary Americans do not foot the bill for new power generation and transmission lines built to support high-load consumers like data centers.

The bill passed the House Energy and Commerce subcommittee in late June and is scheduled for consideration by the full committee.

Castor said Congress should begin by establishing regulatory safeguards, though she did not rule out supporting a construction halt in the future.

“People want guardrails. They do not want their electricity bills to go up, and they are worried about water,” Castor said last month.

When asked about her stance on a moratorium, Castor added: “If we reach a point where these guardrails are not put in place and companies simply ignore them, we will have to move to that stage.”

At the state level, Democratic governors have blocked or slowed legislative efforts to limit data center expansion. In Maine, the legislature passed a bill to ban new data center construction for 18 months, but Governor Janet Mills vetoed the measure because it did not exempt an ongoing $550 million project.

New York lawmakers passed a one-year data center moratorium in June, which is currently awaiting action from Governor Kathy Hochul. According to a report by Politico, Hochul is instead considering an executive order for a shorter, six-month halt.

Other Democratic governors have actively opposed data center moratoriums.

“Walking away from a technology that will continue to propagate is leaving the table,” Representative Abigail Spanberger, a Democrat from Virginia, told Politico this week.

In California, Democratic Governor Gavin Newsom vetoed a bill that would have required planned data centers to estimate their water usage.

As broad moratoriums encounter resistance, state-level Democratic leaders are turning to more targeted solutions, such as reassessing data center tax credits. In Illinois, Democratic Governor JB Pritzker announced in June that the state would suspend its tax incentives for data centers due to energy and water concerns.

Some Republicans have adopted a similar approach. In May, Ohio’s Republican Governor Mike DeWine instructed state officials to temporarily halt the evaluation of new tax exemption requests while lawmakers review data center growth in the state.

In Virginia, lawmakers kept data center tax incentives intact after prolonged budget debates that forced a special legislative session. Spanberger instead supported the introduction of a new tax on electricity consumption.

Meanwhile, in New Jersey, Governor Mikie Sherrill signed legislation this week that places data centers into a separate category of electricity consumers. The governor’s office stated that the measure will ensure data centers pay for their own energy use and the associated infrastructure.

Commenting on the dynamics facing state leaders, Shulman said: “There is a massive amount of investment potential and a lot of potential jobs at stake. And I really think these Democratic governors do not want to shoot their own states in the foot in the race to capture these jobs.”

Shulman added: “The goal for a Democratic governor is to send a policy signal strong enough to make voters feel they are taking a tough stance on AI, or addressing its potential negative consequences, while still trying to attract as much investment and as many jobs as possible.”

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