You just need to glance at the news or social media to witness the chasm in U.S. domestic politics. With a little over three weeks before congressional midterm elections, the parallel echo chambers of liberal and conservative media are broadcasting at full volume. Fueling the fire are a number of partisan battles underway between individual states and the federal government. Such disagreements are part and parcel of the American system. Discourse and debate are woven into the fabric of U.S. history, and federalism is one of the key battlegrounds, as shown by these political conflicts. Midterm elections may shift the balance of power in one or both chambers of Congress, but California — America's most populous and economically powerful state — will be joined by several others as they continue to attempt to counter federal policy for at least the next two years.
A year ago, Stratfor examined the president's initial tenure. In 2017, some states were already pushing back against shifts in federal policy. In 2018, the players remain largely the same, but both sides have been moving aggressively. It is important to note that many of the issues at stake have the potential to influence key international relationships, U.S. global technological competitiveness, and energy and environmental trends. And in light of the potential international impact of U.S. domestic concerns, we are publishing this update on the divided states of America.
The 50 states that make up the United States of America often have regional imperatives that contradict or run counter to federal policy and interests. The nature of such opposition is inevitably attributed to the specific party in power and the constituency it serves. In many cases, states will push the level of autonomy they're granted, even if it means clashing with Washington. Given the current phase of U.S. politics, Democratic Party states are the ones pushing the envelope on independence, and some of the issues at stake could well have global ramifications.
The Travel Ban and Immigration Battles
Immigration was a focal point of Trump's first year in office, and after several challenges by various states, a version of his administration's travel ban was upheld by the Supreme Court on a 5-4 vote in June. The ban prohibited the entry of citizens from Iran, Libya, Somalia, Syria, North Korea, Yemen and Venezuela. The status of the southern U.S. border and illegal immigration were two other areas of concern. Overall, though, the administration appears to be getting what it wants on immigration — especially since it abandoned efforts to make legislative reforms toward merit-based immigration — except perhaps the wall, which is what Trump wants most. Some state and local governments are pushing backing against federal immigration policy, however, especially in its implementation and enforcement.
Some states started resisting the policy more vehemently after the federal government began focusing on low-priority cases. To limit federal reach, several issued laws transforming themselves into sanctuary states. The Trump administration responded by withholding federal grant money. But the 9th U.S. Circuit Court of Appeals overruled that order, saying that the power to do so fell to Congress. The U.S. government is looking to challenge the California measure that prohibits U.S. Immigration and Customs Enforcement agents from entering non-public areas of workplaces. Six states are suing the federal government, citing that they are being (unlawfully) forced to comply with these laws. The issue now rests in the hands of the courts, which will determine the limits of state power on the matter.
California, the EPA, Cars and Lawsuits
California continues to position itself as a global leader on climate change and energy transition. It hosted the Global Climate Action Summit in September 2018 and passed a law calling for the state to run on 100 percent renewable electricity by 2025. Though the United States pulled out of the Paris Agreement on climate change, California and numerous other states and municipalities have pledged to invest and promote technologies in the spirit of that agreement. Corporate investment has also taken a significant turn toward renewable technology.
Still, the Environmental Protection Agency has been busy over the last year, working to roll back many regulations from the administration of President Barack Obama. In April, the EPA announced that the Obama administration targets for automobile fuel efficiency were unrealistic and moved to revoke them. Those targets called for a roughly 40 percent increase in the miles-per-gallon standard by 2025. California and a handful of other states are fighting the reversal. Also, the California Air and Resources Board voted on Sept. 29 to require automobile companies to keep the Obama-era goals despite the Trump administration's efforts to freeze standards. The courts will decide how to resolve that conflict. Under federal law, California has a waiver that lets it set its own fuel economy standards, and the Trump administration is looking to end it. But the state government in Sacramento still holds a lot of cards. Should California be allowed to maintain higher standards, the EPA change may end up contributing little to the future path of automotive development. However, if California were to lose the exemption, it would put the legitimacy of its electric vehicle policies in question as well.
Besides targeting transportation, the EPA is working to undo the Obama administration's Clean Power Plan. In late August, the EPA released a replacement plan that gives electric companies and cooperatives more freedom in choosing their energy mix. It also extends the period for complying with the guidelines from nine months to three years. Additionally, on Sept. 18, the Interior Department eased the requirements and penalties on methane leaks and emissions. The new rule also works to limit the monitoring and royalties that have to be paid on vented methane. California and New Mexico have already filed lawsuits.
Technology and Net Neutrality
The world is becoming increasingly digital, and the use and distribution of data have far-reaching implications. The competition over data use, the internet, and artificial intelligence applications are rapidly turning into a global contest. Though net neutrality is only one part of this broader trend, the tug of war between states and the federal government over the issue is another battle for autonomy that will have far-reaching implications. On Sept. 30, California Gov. Jerry Brown signed the state's net neutrality bill into law. The legislation restores the net neutrality provisions removed by the Federal Communications Commission (FCC) under the Restoring Internet Freedom Order on June 11. The new law would prevent internet providers from blocking or throttling site access and from charging certain fees. It also prevents data cap exemptions, which would allow companies to free some apps from their data limits.
The Trump administration filed suit against the law within hours. Attorney General Jeff Sessions called the legislation unconstitutional because it could impinge on federal powers over interstate commerce. Similarly, FCC head Ajit Pai called the law illegal and beyond the state's purview. The federal suit seeks to prevent the state law from taking effect on Jan. 1, 2019. But California isn't the only state with net neutrality legislation or executive orders. Six governors have approved executive orders, and three other states have passed their own net neutrality laws. The legislation for Washington state is the most comprehensive and went into effect in June, immediately after the Restoring Internet Freedom Order did. Additionally, 20 states are suing the federal government over the order itself. However, with California's prominent position in exerting state autonomy over the past two years and the extremely strict nature of its new law, its state government will likely be the Trump administration's target.
Success With Trade
The White House has come away with a number of victories on the trade front in recent weeks — from the renegotiation of NAFTA, as well as an agreement with South Korea, to the initiation of talks with the European Union and Japan. However, the trade dispute with China continues to intensify and deteriorate. Agriculture has arguably been hurt the most by the dispute, and the costs have been weathered by states that largely supported Trump in 2016. The midterm elections in these localities will show whether their support for Trump lasts as the impact of tariffs kicks in this fall.