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Trump floats more EU, Canada tariffs if they work against US

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President Donald Trump suggested further tariffs would be imposed on the European Union and Canada if they worked together “to do economic harm” to the U.S. 

In a late night Truth Social post, Trump said large-scale tariffs “far larger than currently planned” would be placed on them in such a scenario. The euro briefly pared a small gain and the Canadian dollar dipped. 

“If the European Union works with Canada in order to do economic harm to the USA, large scale Tariffs, far larger than currently planned, will be placed on them both in order to protect the best friend that each of those two countries has ever had!” Trump posted. 

Trump signed an order on Wednesday imposing a 25% tariff on auto imports, escalating a trade war designed to bring more manufacturing jobs to the U.S. The move sets the stage for more tariff actions next week, including promised so-called reciprocal tariffs on April 2, potentially deepening tensions with key trading partners. Other industry-specific tariffs are also in the works, including on lumber, semiconductors and pharmaceutical drugs. 

The EU is preparing countermeasures in response. France has urged the European Commission, which handles trade matters for the bloc, to consider using its toughest trade weapon — the anti-coercion instrument – for the first time, Bloomberg reported earlier.

In preparation for Trump’s trade measures, the EU has been sharing notes with some of its like-minded allies, according to senior EU officials who spoke on the condition of anonymity. There’s no indication, however, that the bloc is coordinating its retaliation. 

“It is now crucial that the EU delivers a decisive response to the tariffs – it must be clear that we will not back down in the face of the U.S.,” German Economy Minister Robert Habeck said in an emailed statement on Thursday. “Strength and self-confidence are required.”

Trump’s latest comments come after Canadian Prime Minister Mark Carney visited France and the U.K. last week on his first foreign trip to pitch a closer alliance with European allies. 

“I want to ensure that France and the whole of Europe works enthusiastically with Canada, the most European of non-European countries,” Carney said in Paris.

The EU expects Trump’s reciprocal tariffs next week to be a double-digit rate across the bloc, according to people familiar with the thinking in Brussels. Officials there anticipate that the U.S. will use a single tariff rate for the EU as a whole, rather than setting different levels per member state.

The EU’s trade chief, Maros Sefcovic, and European Commission President Ursula von der Leyen’s head of cabinet met with U.S. Commerce Secretary Howard Lutnick, U.S. Trade Representative Jamieson Greer and Director of the National Economic Council Kevin Hassett this week to discuss the trade situation. 

The talks with the U.S. made little headway and there’s little the EU can do to keep the levies from being imposed, said the people, who spoke on the condition of anonymity. An EU response to the U.S. tariffs likely won’t be immediate as the bloc will need to assess the details. 

Trump has said the reciprocal levies will rectify non-tariff barriers that he says are unfair, such as domestic regulations and how countries collect taxes, including the EU’s value-added tax. The EU says its VAT is a fair, non-discriminatory tax that applies equally to domestic and imported goods.

Speaking to reporters Wednesday at the Oval Office, Trump said the reciprocal levies would be lower than expected.

“We’re going to make it all countries, and we’re going to make it very lenient,” Trump said. “I think people are going to be very surprised. It’ll be, in many cases, less than the tariff that they’ve been charging us for decades.” 

Trump’s charge against the car sector has added more pain to an industry facing a difficult outlook in Europe. New-car registrations in the region during February fell 3.1% from a year earlier to 963,540 units, the European Automobile Manufacturers’ Association said this week, as uncertainty about the economy prompted consumers to hold back on bigger purchases.

Germany is by far the most exposed EU member state, from an automotive tariffs perspective. The U.S. imported $24.8 billion worth of new vehicles from the country last year, almost half the $52.3 billion total shipped in from the bloc.

Porsche AG and Mercedes-Benz Group AG will be hit hardest by President Donald Trump’s latest trade salvo, facing a potential €3.4 billion ($3.7 billion) blow from new U.S. tariffs on imported cars.

Although Volkswagen AG and BMW AG are somewhat insulated because all three manufacture cars in the U.S., the companies ship hundreds of thousands of high-value vehicles into the country every year. Several European brands, including Ferrari, are entirely reliant on imports.

Other automakers affected by higher tariffs on cars imported from the EU include Stellantis NV, the maker of Jeep, Alfa Romeo and Fiat; Tata Motors Ltd.’s Jaguar Land Rover; and Volvo Car AB.

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Accounting

IRS sets new initiative with banks to uncover fraud

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The Internal Revenue Service’s Criminal Investigation unit has embarked on a new initiative for engaging with financial institutions as it makes greater use of banking data to uncover tax and financial fraud. 

IRS-CI released FY24 Bank Secrecy Act metrics Friday, demonstrating how it uses BSA data to investigate financial crimes. During fiscal years 2022 through 2024, 87.3% of IRS-CI’s criminal investigations recommended for prosecution had a primary subject with a related BSA filing, and adjudicated cases led to a 97.3% conviction rate, with defendants receiving average prison sentences of 37 months. IRS-CI also leveraged BSA data to identify $21.1 billion in fraud linked to tax and financial crimes, seize $8.2 billion in assets tied to criminal activity, and obtain $1.4 billion in restitution for crime victims.

Under the BSA, which Congress passed in 1970, financial institutions use suspicious activity reports to notify the federal government when they see instances of potential money laundering or tax evasion. The SARs data is used by agencies like IRS-CI to probe money laundering and related financial crimes.

A new IRS-CI initiative known as CI-FIRST (Feedback in Response to Strategic Threats) aims to establish ongoing engagement with financial institutions. They will receive quantifiable results from IRS-CI on how the agency uses suspicious activity reports to investigate federal crimes. 

“Public-private partnerships thrive when everyone mutually benefits, and to enhance our partnership with the financial industry, we plan to launch CI-FIRST which will promote information-sharing, streamline processes and demonstrate how valuable BSA data is to criminal investigations,” said IRS-CI Chief Guy Ficco in a statement.

As part of the CI-FIRST program, IRS-CI plans to streamline subpoena requests and share pointers with financial institutions on what to include in suspicious activity reports to maximize their impact. The program will address what’s working and what can be improved, offering continuous lines of communication between partners. IRS-CI headquarters will work with larger financial institutions that have a national and international presence, while its field office personnel will work with regional and community banks and credit unions.

IRS-CI special agents ran an average of 966,900 searches each year against currency transaction reports during the last three fiscal years. Close to 1,600 cases were opened in FY24 with at least one currency transaction report on the primary subject. The data also shows that 67.4% of cases opened by IRS-CI had a subject with one or more currency transaction reports below $40,000, with 50% of currency transaction reports involving amounts less than $22,230.

BSA data has also proven to be effective in helping IRS-CI combat narcotics trafficking and pandemic-era tax fraud. Since FY20, IRS-CI used BSA data to initiate nearly 1,300 investigations with ties to fentanyl and investigate alleged employee retention credit fraud totaling $5.5 billion.

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How tax departments can avoid 2017’s mistakes ahead of the 2025 TCJA sunset

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As the expiration of key Tax Cuts and Jobs Act provisions looms, tax professionals are preparing for what could be another period of upheaval.

In 2017, when the TCJA was first enacted, tax departments struggled to keep pace with new regulations and guidance. According to our recent Bloomberg Tax survey of 434 tax professionals, 92% of tax professionals working in tax at the time reported that the TCJA’s implementation was moderately to highly disruptive, and 60% said it took a year or more to fully implement the changes. 

The coming year could bring more of the same. Eight in 10 respondents are moderately or very concerned about the potential impact of these changes. Yet many rely on outdated, manual processes that make adjusting quickly to major legislative changes difficult.

With the benefit of hindsight, tax professionals have a unique opportunity to apply the lessons of 2017 and invest in automation now to avoid repeating the same costly mistakes.

Manual processes still dominate tax departments

One of the most striking findings from our survey is that many tax professionals continue to rely on manual workflows despite the increasing complexity of tax compliance. Seventy-six percent of respondents said they still use Excel for tax calculations, and 63% manually gather data from enterprise risk management and general ledger systems to perform tax calculations.

These outdated processes create inefficiencies and make it harder for tax teams to respond quickly to legislative changes.

In its time, the TCJA was the most sweeping tax code overhaul in decades. It required tax departments to significantly modify or even replace their workpapers to reflect the changes. 

While 62% of survey respondents believe they can update their existing workpapers without major difficulty, one in four anticipate significant challenges, and 10% will need to create entirely new workpapers.

This manual burden could put firms at a disadvantage when deadlines are tight and compliance requirements shift rapidly.

Scenario modeling is challenging yet critical

When big changes are on the horizon, running multiple tax planning scenarios helps organizations make decisions and manage risk. Automated tax solutions streamline this process by allowing tax teams to evaluate different legislative outcomes and come up with strategies to address them.

Firms that lack automation in their tax workflows may have a tough time keeping up with the pace of change — especially if Congress waits until the eleventh hour to pass legislation, as was the case in 2017.

Eighty-eight percent of respondents reported it is moderately or very difficult to conduct scenario modeling for TCJA changes, and only half have started the process. One respondent noted, “We need as much lead time as possible to make changes to our models, and significant changes take even more time to incorporate. Running multiple scenarios is a very manual and difficult process.”

Quantifying the cost of inaction

Failing to invest in automation before a substantial tax law change can be a costly mistake.

Among respondents, 71% who experienced the enactment of TCJA in 2017 reported wishing they had invested earlier in tax technology to better manage the complexity of compliance updates. Manual processes not only slow response times but also drive costs, as nearly 40% of respondents anticipate a $100,000 or higher increase in consulting budgets if significant TCJA-related changes occur. 

By leveraging tax automation tools and centralized tax-focused software, firms can optimize how they engage with external consultants. Automation allows tax departments to take ownership of routine processes, such as calculations and compliance adjustments, reducing reliance on consultants for these tasks. Instead, consultants can be utilized more effectively on high-impact projects that drive strategic value, such as tax planning, risk management or navigating complex regulatory changes. This shift enables firms to streamline compliance while ensuring external expertise is directed toward creating lasting organizational benefits.

Preparation now means greater confidence going into 2026

The data is clear: firms investing in automation today will be better positioned to handle the upcoming tax changes confidently. Here’s how to get ahead:

  • Integrate tax technology. Replace manual calculations in Excel with automated tax workpapers that integrate with source data and automate data gathering and calculation processes.
  • Adopt scenario modeling tools. Invest in software that allows for real-time legislative modeling so you can analyze multiple potential outcomes before changes take effect.
  • Reduce reliance on external consultants. Implement in-house tax software to keep control over your data, reduce consulting budgets and respond quickly to regulatory shifts.

With less than a year until TCJA provisions are set to expire, the time to act is now. Taking proactive steps to automate and modernize your workflows will put you in a far stronger position than companies that wait until the last minute. 

Major tax law changes can be disruptive, but with the right technology, you don’t have to relive the turmoil of 2017. Embrace tax-focused automation to remain agile, efficient and ready to navigate whatever changes come next.

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Accounting

SEC stops defense of climate disclosure rule

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The Securities and Exchange Commission voted to end its legal defense of the climate-related disclosure rule it approved last year under the Biden administration.

The climate disclosure rule was facing numerous lawsuits from business groups and a temporary stay imposed by a court, the SEC had already paused it last April after narrowly approving a watered-down rule last March. The former SEC chairman, Gary Gensler, who had pushed for the rule, stepped down in January and acting chairman, Mark Uyeda, who had voted against the rule, announced in February that he was directing the SEC staff to ask a federal appeals court not to schedule the case for argument. He cited a recent presidential memorandum from the Trump administration imposing a regulatory freeze, and he effectively paused the litigation. The vote on Thursday effectively suspends the rule.

“The goal of today’s Commission action and notification to the court is to cease the Commission’s involvement in the defense of the costly and unnecessarily intrusive climate change disclosure rules,” Uyeda said in a statement Thursday.

The SEC noted that states and private parties have challenged the rules, and the litigation was consolidated in the Eighth Circuit Court of Appals. SEC staff sent a letter to the court stating that the Commission was withdrawing its defense of the rules and that Commission counsel are no longer authorized to advance the arguments in the brief the Commission had filed. The letter stated that the SEC yields any oral argument time back to the court.

One of the SEC commissioners blasted the move and pointed to the arduous, years-long process of crafting the climate rule. “By way of politics, the current Commission would like to dismantle that rule. And they would like to do so unlawfully,” said SEC commissioner Caroline Crenshaw in a statement Thursday. “The Administrative Procedure Act governs the process by which we make rules. The APA prescribes a careful, considered framework that applies both to the promulgation of new rules and the rescission of existing ones. There are no backdoors or shortcuts. But that is exactly what the Commission attempts today. By its letter, we are apparently letting the Climate-Related Disclosures Rule stand but are withdrawing from its defense in court. This leaves other parties, including the court, in a strange and perhaps untenable situation. In effect, the majority of the Commission is crossing their fingers and rooting for the demise of this rule, while they eat popcorn on the sidelines.”

Environmental groups were critical of the SEC’s vote. “Climate change is a growing financial risk, and ending the SEC’s defense of its own climate disclosure rule is a dangerous retreat from investor protection,” said Ben Cushing, sustainable finance campaign director at the Sierra Club, in a statement. “Letting companies hide climate risks doesn’t make those risks any less real — it just makes it harder for investors to manage them and protect their long-term savings. The SEC is leaving investors in the dark at exactly the moment transparency and action is most needed.”

“The SEC was established to protect investors, and for more than 20 years, investors have clearly and overwhelmingly stated that they need more clear, consistent, and decision-useful information on companies’ exposure to climate-related financial risks,” said Steven M. Rothstein, Ceres’s managing director for the Ceres Accelerator for Sustainable Capital Markets, in a statement. “The ongoing acceleration of physical climate impacts, including the tragic fires in Los Angeles, has underscored the importance of transparency on these risks. Investors have clearly indicated they require better disclosure, with $50 trillion in assets under management broadly supportive of the rule adopted in March 2024. This is clearly a step backward in helping investors and other market participants have the information they need to manage climate-related financial risks.”  

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