Question

Mr. James is opening up a new business producing watch parts in Minnesota, which he then ships to Michigan to be assembled into watches by a different company. Mr. James is likely to have to abide by commercial regulations set at which levels of government?

Answer 1

Federal regulations as well as the state regulations of Minnesota and Michigan.

Mr. James will have to follow the regulations of Minnesota and Michigan in regard to the production of the pieces and the production of the watches. He will also have to follow federal regulation because the business is moving items between two states and therefore the federal government becomes the overarching rule.

Trade between states is regulated by the federal government and those laws must be followed first and as priority. State regulations that are more specific than the federal regulation would also have to be followed for a person to operate in that state. The Commerce Clause in the Constitution clarifies the federal governments role in state to state trade and production.