Three Things to Know: April 4th

This week's information compiled by your SC Chamber team includes: 
White House Unveils New Tariffs, SC Chamber CEO Testifies on Income Tax Reform, Legislative Update - Week 12

 1. White House Unveils New Tariffs

On Wednesday, President Donald Trump announced sweeping tariffs on imports from across the globe. Beginning April 5th, a baseline tariff of 10% will be levied on nearly all goods imported into the United States. President Trump also unveiled a series of reciprocal tariffs on countries that run meaningful trade surpluses with the U.S., including:

• Vietnam: 46%
• Thailand: 36%
• China: 34% (this does not include the 20% tariff unveiled earlier, so the total tariff on Chinese goods is 54%)
• Taiwan: 32%
• India: 26%
• Japan: 24%
• European Union (EU): 20%

In response to the announcement, the U.S. Chamber of Commerce released a statement saying, “What we have heard from businesses of all sizes, across all industries, from around the country is that these broad tariffs are a tax increase that will raise prices for American consumers and hurt the economy”. A memo released by the U.S. Chamber lays out the potential downside of tariff reciprocity: a price increase on consumers, reciprocal tariffs against the United States (i.e., the EU with automobiles), and the complications of administering tariffs.

According to a study done by the Tax Foundation, these new tariffs would raise $3.2 trillion in revenue while shrinking U.S. GDP by 0.8 percent. Regarding consumers, the same study estimated that the tariffs will reduce after-tax income by 2.1%, an average of $2,100 per household. China, Canada, and the EU have announced or imposed reciprocal tariffs on the United States, hurting domestic producers who rely on foreign markets to sell their products.

A full list of reciprocal tariffs can be found here. This is an ongoing situation, and the Chamber will continue to keep members informed of the latest developments.

2. SC Chamber CEO Testifies on Income Tax Reform

A historic income tax reform proposal (H.4216) that will make South Carolina more competitive in the ongoing battle for high-paying jobs and talent attraction unveiled last week by legislative leaders is moving through the South Carolina House of Representatives.

On Tuesday, a House Ways and Means Committee subcommittee advanced this bill that would immediately replace the state’s current progressive income tax system, which places a higher tax burden on high earners, with a single, simple, flat tax rate of 3.99%. Additionally, the state would shift how it calculates an individual's taxable income from “federal taxable income” to adjusted gross income (AGI). At 3.99%, South Carolina’s income tax rate would be lower and more competitive than our immediate neighbors in North Carolina (4.25%) and Georgia (5.39%). Should state revenues continue to increase, the rate would eventually drop to 2.49%, which would be one of the lowest income tax rates in the country once fully implemented.

SC Chamber President and CEO Mike Brenan testified in support of the bill at Tuesday’s subcommittee, saying, “H.4216 represents the meaningful income tax reform South Carolina needs to effectively compete with states across the country to attract top talent, high-paying jobs, and innovative industries…South Carolinians will earn more money because of this effort, and we can flip our tax rankings from a stain on our reputation into something we can brag about.”

The SC Chamber was also joined by sixteen other local chambers of commerce from across the state in a letter to the subcommittee, highlighting the business community’s support for the proposal and urging its swift passage.

The SC Chamber has long advocated for meaningful tax reform to make South Carolina’s business climate even more competitive, including publishing A Roadmap for Tax Reform in 2018, championing the Comprehensive Tax Cut Act of 2022, and, most recently, having current Board Chair Thomas Rhodes author an op-ed featured in the Post & Courier calling for immediate tax reform this year.

The full Ways and Means Committee adjourned debate on the bill on Thursday so that they could get fiscal impact statements on proposed amendments. Read Brenan’s testimony here and the letter from the local chambers here.

3. Legislative Update – Week 12

Only five weeks remain in the 2025 legislative session, and the House and Senate are both working hard to advance items on their respective agendas before the May 8th deadline. Notable actions taken this week include:

• South Carolina Energy Security Act (H.3309) – This week, the Senate passed an amended version of a bill that aims to address the current and future energy needs of South Carolina by increasing generation capacity through an “all of the above” approach and through common sense regulatory and permitting reforms to maintain South Carolina’s unprecedented economic growth. Notable amendments made to the bill include:
  • Electric Rate Stabilization – This provision would allow electric utilities to adjust their rates in a more predictable manner through regular, yet smaller, rate adjustments instead of lengthy rate cases.
  • Moratorium on Incentives for Data Centers – This provision puts a moratorium on state incentives for future data center projects effective May 15, 2025. The provision does not apply to incentive agreements entered into before May 15, 2025.
  • Data Center Water Usage – This provision requires data centers to annually report to the Department of Environmental Services (DES) on the amount of surface water and groundwater they used the previous year, along with a forecast on the amount of surface water and groundwater they will use in the coming year.
  • ORS “Public Interest” Charge – This amendment removes a provision of the bill that would have required the Office of Regulatory Staff (ORS) to consider economic development when determining “public interest” in cases before the Public Service Commission (PSC).

The bill now heads back to the House, where it will likely wind up in a conference committee.

• Ending Illegal Discrimination and Restoring Merit-Based Opportunity Act (H.3927) – On Wednesday, the House passed a bill that aims to restrict diversity, equity, and inclusion (DEI) programs and initiatives within state government, its political subdivisions, institutions of higher education, and public schools. DEI is defined as any preferences, mandates, policies, programs, activities, guidance, regulations, enforcement actions, consent orders, or requirements implemented by a public entity that constitute illegal discrimination on the basis of race, color, religion, sex, or national origin. An amendment to the bill that was adopted requires private sector entities that contract with or receive a grant from the state or its political subdivisions to certify that they do not operate any unlawful programs or have hiring practices that violate state or federal anti-discrimination laws. The bill now heads to the Senate.
• Medical Informed Consent Act (S.54) - On Thursday, the Senate Medical Affairs Committee advanced a bill that would prohibit all employers from mandating the receipt of “novel vaccines”, “gene therapy”, or “indemnified products” as a condition of employment, entry into buildings and grounds, attendance, participation, or the purchase or receipt of any products and services offered for employees, contractors, students, and patrons. Employers who mandate the receipt of “novel vaccines”, “gene therapy”, or “indemnified products” would be subject to criminal and civil penalties. Additionally, the bill amends various sections of the state code relating to emergency health powers to limit the powers of the Department of Public Health (DPH) in future public health crises. The Chamber sent a letter to a subcommittee outlining our concerns with the bill’s overreach into the operations of private employers and highlighting the threat it poses to South Carolina’s longstanding free enterprise system. The bill now heads to the full Senate.
• South Carolina Social Media Regulation Act (H.3431) & Age Appropriate Design Code (S.268) - On Wednesday, a Senate Labor, Commerce and Industry (LCI) Committee Ad-Hoc subcommittee held a hearing on two bills aimed at protecting minors online by enforcing stricter age verification, parental consent requirements, and content moderation standards. Supporters emphasized that the bill would stop many harmful online behaviors, unlike opponents who raised concerns about constitutional challenges, excessive regulation, and unintended consequences for free speech. No vote was taken during the meeting.

Additionally, on Wednesday, the Senate scheduled a hearing for Monday, April 21st, to consider the potential removal of Treasurer Curtis Loftis for his involvement in the $1.8 billion accounting error. This follows a report published last week by the Senate Finance Committee’s Constitutional Subcommittee that detailed the findings of AlixPartners, a global consulting firm hired to investigate the $1.8 billion accounting, as well as the recommendations of the subcommittee. The report alleged that Treasurer Loftis made a grave financial error and attempted to cover it up. The report recommended creating an independent Office of Government Auditing and, most poignantly, that Treasurer Loftis should be removed from office. Loftis can be removed if two-thirds of the Senate and House vote against him.