Global Supply Chain Horizons - March 2025

• Cross-Border
• Asia
• Europe
• UK
• US

Cross-Border

EU-Chile Interim Trade Agreement

On February 1, the EU-Chile Interim Trade Agreement (ITA) entered into force. The ITA aims to boost competitiveness for businesses across both jurisdictions, while providing a foundation for ongoing initiatives, such as the development of critical raw materials value chains for lithium and copper, and the Production of Green Hydrogen in Chile. The key benefits of the ITA include:

• Tariff Elimination: 99.9% of EU exports to Chile will be tariff-free
• Raw Materials Access: Ensures sustainable access to critical raw materials like lithium and copper
• Investment and Services: Facilitates EU companies’ investment and service provision in Chile
• Sustainability: Includes commitments to sustainable trade, gender equality, and resilient food supply chains
• Intellectual Property: Protects intellectual property rights and geographical indications

First EU-Central Asia summit scheduled for 3-4 April

On 3-4 April 2025, the first EU-Central Asia summit will be hosted by President Shavkat Mirziyoyev of Uzbekistan. Leaders of Kazakhstan, Kyrgyzstan, Tajikistan, and Turkmenistan will also be participating. The increasing importance of the Central Asia region to EU strategic interests led to the adoption of a new EU strategy for Central Asia in 2019, focused on economic and political development.

The upcoming summit will focus on cooperation in areas such as transport and digital connectivity, critical raw materials, economic and security cooperation and the energy transition.

UK joins the Comprehensive and Progressive Agreement for Trans-Pacific Partnership

On 15 December, the UK officially became a member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). This move will strengthen UK’s trade ties with Asia-Pacific Countries and is expected to diversify supply chains and open new markets. By joining the CPTPP, UK businesses, particularly those with a significant footprint in the Indo-Pacific region, will benefit in various ways, including:

• favorable trading terms with other CPTPP members
• improved trade efficiency, with the benefit of greater transparency as regards import and export procedures across borders
• greater supply chain flexibility and diversification of export destinations, simplified export procedures and creation of job opportunities
• preferential import tariffs (potentially leading to lower consumer costs), and
• greater legal certainty and more robust protection for investors in areas such as intellectual property rights protection, and the use of non-discriminatory treatment and transparent dispute settlement mechanisms

Asia

China: Ministry of Industry and Information Technology proposes new rare earth regulating measures

On February 19, China’s Ministry of Industry and Information Technology began a public consultation, ending on March 21, on a new set of draft measures intended to regulate the mining, smelting, separation and tracing of the country’s rare earth resources. These draft measures follow the introduction of new regulations on the administration of rare earth resources in October last year. If implemented, they will include: the introduction of a new management mechanism to regulate the mining, smelting and separation of rare earth resources; implementation of production quotas; establishment of traceability systems; data security and reporting obligations, among other requirements.

Impact: Rare earth resources are widely used in advanced technology products such as consumer electronics and hybrid vehicles. Tightened scrutiny over the production, transfer and end use of these critical resources could potentially impact input availability and costs, and lead to supply chain disruptions in relevant industries. Businesses may seek to diversify their supply chains to mitigate these impacts.

China: Tariffs on certain US imports announced

On February 10, tariffs imposed by China on certain US imports entered into force. These tariffs are additional to existing duties, and cannot be exempted or reduced under existing policies. The tariffs include:

• 15% Tariff: Coal and liquefied natural gas
• 10% Tariff: Crude oil, agricultural machinery, large-displacement automobiles, and pickup trucks

Specific articles subject to the additional tariffs are listed in the annexes to the announcement.

Impact: The tariffs on US imports may lead to increased costs for the commodities in question, potentially disrupting supply chains and raising prices. This may prompt shifts to domestic or alternative suppliers, and may lead to further retaliatory measures such as additional tariffs imposed by the US.

China: Ministry of Commerce announces export controls on various critical metals

On February 4, China’s Ministry of Commerce announced new export controls on items related to tungsten, tellurium, bismuth, molybdenum, and indium, effective immediately. Exports of any of these controlled items out of China without valid licenses will be prohibited.

These rare metal-related items are used in the defense and clean energy industries, among others, for a wide range of uses, such as in the manufacture of:

• phone screens and television displays
• fiber-optic technology
• artillery shells, armor plating and cutting tools
• solar panels and memory chips

Impact: Businesses engaged in the export of these products from China are required to apply for an export license in accordance with China’s Export Control Law and its subsidiary regulations governing the export of dual-use items and technologies (i.e. those that have both military and civilian applications).

As China is a key supplier of these materials, the new restrictions are likely to cause disruptions to industrial supply chains.

China: Ministry of Commerce proposes restrictions on battery and critical mineral technology exports

On January 2, China’s Ministry of Commerce (MOFCOM) issued proposed amendments to the Catalogue of Technologies Prohibited or Restricted from Export, for public comments until February 1. Among other amendments, it is proposed that certain technologies used to process lithium, gallium, and to manufacture battery components, will be subject to export controls. MOFCOM has not announced if and when the revised catalogue will come into effect.

Impact: If implemented, the restrictions could pose supply chain challenges for manufacturers planning to use Chinese technology to extract or process materials critical for the production of electronic and other key equipment. The restrictions could also impact on Chinese businesses currently deploying such technologies to expand their operations outside China.

For more information, please see our briefing.

China: Implementation Plan on Accelerating the Deployment of Clean and Low-Carbon Hydrogen in the Industrial Sector

On December 30, the Chinese Government released an implementation plan to promote the use of low-carbon hydrogen in industrial sectors. Building on the 2021-2035 Hydrogen Energy Industry Plan, the plan sets targets on, among others, large-scale use of low-carbon hydrogen in metallurgy, ammonia/methanol synthesis, and refining by 2027. The plan emphasizes technological innovation and cost reduction in the use of such renewable energy, and the development of relevant energy infrastructure, to be supported by financial incentives.

Impact: China’s low-carbon hydrogen policies will diversify energy sources in the market, potentially reducing production costs through innovation, and enhancing supply chain resilience with localized green hydrogen. This will lead to more sustainable and efficient industrial processes, boosting competitiveness in both domestic and international markets.

For more information, please see our briefing.

Europe

EU: European Commission response to US steel and aluminum tariffs

On March 12, the European Commission announced that it will counter the introduction of US steel and aluminum tariffs in two ways:

• By automatically reimposing suspended 2018 and 2020 rebalancing measures due to expire on 31 March 2025, and
• By introducing a new package of additional measures on certain products originating in the United States

A two week consultation process on the proposed new package of measures began on 12 March. Target products include both agricultural products, such as dairy, poultry, beef, sugar and vegetables and industrial products such as steel and aluminum products, textiles, home appliances and plastics. A full list of targeted products is available on the DG Trade website.

Impact: Stakeholders have until 26 March to respond to the consultation, following this the Commission will finalize the draft legislation, which is expected to enter into force by mid-April. Businesses importing targeted products are likely to face increased costs and disruption to their supply chains.

For more information, please see our briefing.

EU: Battery-related waste codes updated, encouraging sustainability in the automotive sector

On March 5, the EU updated the List of European Waste to include new battery-related waste codes. Shredded battery waste, known as ‘black mass’, is a crucial material used in electric vehicle battery recycling. Black mass will now be categorized as hazardous waste, meaning that it will be subject to greater controls and kept in the European economy, supporting the security of supply goal of the EU Battery Regulation.

Among the updates, specific waste codes now cover lithium-based batteries. Black mass, nickel-based, and zinc-based waste batteries, and sodium sulfur and alkaline waste batteries are also all now classed as hazardous.

Impact: When the new codes are in force waste operators and other stakeholders will need to adapt their management procedures to comply with the more stringent measures. The amendment will now go through a scrutiny period, usually lasting around two months.

EU: Action Plan for the automotive sector published

On March 5, the EU published its Action Plan for the automotive sector, building on the Strategic Dialogue on the Future of the European Automotive Industry, launched in January.

By introducing new measures, the EU aims to boost demand for electric vehicles (EVs), help EU manufacturers to electrify their fleets, and ensure their competitiveness in the EV market.

Impact: The Action Plan proposes new EU requirements and conditions that may affect businesses’ supply chains.

For more information, please see our Flash update.

EU: Clean Industrial Deal published

On February 26, the European Commission published its Clean Industrial Deal, a comprehensive strategy aimed at boosting the competitiveness of European industries through a commitment to decarbonization and reindustrialization.

Impact: This deal will push companies to adopt cleaner technologies and comply with stricter regulations, potentially changing operational strategies.

For more information, please see our Flash update.

EU: InvestAI initiative launched

On February 11, the EU launched the InvestAI initiative to mobilize €200 billion for AI investment, including a €20 billion fund for AI gigafactories. These gigafactories will support the development of complex AI models, enhance Europe’s AI capabilities, and promote open, collaborative innovation. The initiative aims to boost healthcare, research, and competitiveness, with funding from existing EU programs and contributions from Member States.

Impact: As AI technology develops, it is expected businesses will benefit from more streamlined production processes and logistics, fostering smarter, more adaptive supply chain systems. Continued AI investment may also lead to establishment of more related businesses in the sector, creating a more competitive, more resilient EU market.

EU: Competitive compass published

On January 29, the European Commission presented the Competitiveness Compass, their strategic agenda for the next policy cycle. The compass identifies three core areas for action, including:

1. Innovation: The aim is to close the innovation gap by fostering start-ups, promoting industrial leadership in high-growth sectors, with initiatives include AI Gigafactories, Apply AI, and a Start-up and Scale-up Strategy.
2. Decarbonization: A joint roadmap addresses high energy prices and promotes clean, affordable energy. The Clean Industrial Deal and Affordable Energy Action Plan aim to make the EU an attractive manufacturing location and support clean tech.
3. Security: Reducing dependencies through effective partnerships and diversifying supply chains. The Compass includes Clean Trade and Investment Partnerships and revised Public Procurement rules to prioritize critical sectors and technologies.

Impact: The Competitiveness Compass will enhance supply chains by promoting innovation, decarbonization, and security. It aims to reduce dependencies, diversify supply chains, and improve market access, fostering a more resilient and efficient supply chain network across Europe.

EU: Proposed tariffs on certain agricultural products and fertilizers from Russia and Belarus

On January 28, the European Commission proposed tariffs on certain agricultural products and nitrogen-based fertilizers from Russia and Belarus. The tariffs will affect 15% of agricultural imports from Russia. Measures are included to protect EU farmers from price increases, while ensuring global food security by allowing transit to third countries. The proposal now awaits consideration by the European Parliament and the Council.

Impact: By reducing dependency on these imports, the EU aims to support domestic production, fostering a more resilient food supply chain. However, this shift might initially disrupt supply chains, potentially leading to higher prices and adjustments in sourcing. The proposal includes measures to mitigate price increases for EU farmers, but some short-term supply chain implications are likely as the market adjusts.

EU: Packaging and Packaging Waste Regulation

On January 22, the Packaging and Packaging Waste Regulation (PPWR) was published. The rules set binding re-use targets, restrict certain single-use packaging, and require economic operators to minimize packaging. Targets include up to 65% recycled content for single-use plastic bottles by 2040. The Regulation also mandates labelling to aid consumer sorting and introduces re-use obligations for businesses.

Impact: The PPWR will drive significant changes in supply chains by requiring businesses to overhaul packaging processes and collaborate closely with suppliers. This Regulation mandates investment in sustainable packaging solutions and adherence to new recycling standards.

For more information, please see our briefing.

EU: New EU Rules for Medical Device Supply Interruptions

On January 10, 2025, Article 10a of the Medical Device Regulation (MDR) and In Vitro Diagnostic Medical Device Regulation (IVDR), introduced under Regulation (EU) 2024/1860 went into effect. Article 10a requires that manufacturers notify relevant parties when an interruption or discontinuation is reasonably foreseeable, and could result in “harm or a risk of serious harm to patients or public health in one or more Member States”. The Commission published guidance on Article 10a in its Q&A on the Obligation to Inform of Device Interruption or Discontinuation. The regulation also facilitates a gradual roll-out of Eudamed, enhancing transparency and monitoring of device availability.

Impact: Manufacturers will need to be prepared to inform relevant authorities and institutions at least six months before anticipated supply interruptions. Additional reporting will require notifications and reasons for supply interruptions or discontinuations to be sent to downstream supply chain entities. Manufacturers should also develop strategies to minimize impact on patient care and public health.

EU: 40 hazardous chemicals added to Prior Informed Consent regulation

On January 7, the European Chemicals Agency (ECHA) announced the addition of 40 chemicals to Annex I of the EU’s PIC (Prior Informed Consent) Regulation. This includes five industrial chemicals as well as 35 pesticides.

The PIC Regulation oversees the trade of specific hazardous chemicals that are either banned or heavily restricted within the EU. It imposes requirements on businesses that intend to export these chemicals to non-EU countries or import them into the EU. The new additions include a subgroup of PFAS, used in products such as: protective and stain resistant coatings for electronics, textiles and carpets, packaging; metal plating; fire-fighting foams; cleaning and polishing products.

Impact: Businesses exporting these substances will have to complete an export notification to ECHA, before beginning their export. Explicit consent from importing countries will also be required for 38 of the chemicals on the list.

EU: Revised Construction Products Regulation now in force

On January 1, the Construction Products Regulation (CPR) entered into force. The CPR includes measures to promote the circular economy and green choices, setting new rules for declaring products’ environmental and sustainability performance.

The new regulation updates existing rules, incorporating new technical developments for standardization, and modifying the definition of “construction products” to include both traditional materials and new technologies like 3D printing. It introduces digital product passports, to provide better information to consumers, as well as for declaration of performance and conformity, safety information and instructions for use.

Impact: Businesses must ensure that they follow the new rules including:

• providing digital product passport information
• meeting new environmental sustainability requirements
• compliance with updated product safety requirements

Businesses may also have to meet specific obligations according to their roles as manufacturers, importers or distributors. The new rules will apply from 8 January 2026, with the exception of specific provisions including those relating to development of harmonized standards, assessment and verification systems and market surveillance, which will apply from 7 January 2025.

EU: European Commission bans Bisphenol A in food contact materials

On December 19, the European Commission announced the adoption of a ban on the use of Bisphenol A (BPA) in products that come into contact with food or drink. BPA is a chemical used in the manufacture of certain types of plastics and resins. The new rule means that BPA must no longer be used in products such as coatings on metal cans, reusable plastic drinks bottles, water coolers and other kitchenware. Other bisphenols found to be harmful have also been included in the ban.

Impact: Businesses will have an 18-month transition period during which they must adapt their production to comply with the new rule. There will be limited exceptions to the ban, where no alternative products exist.

EU: Deforestation-free Products Regulation

On December 18, the European Council adopted a one-year postponement of the EU deforestation law’s application. This delay allows stakeholders more time to comply with due diligence obligations, ensuring that commodities like cattle, wood, cocoa, soy, palm oil, coffee, and rubber are deforestation-free. The following application dates will apply:

• December 30, 2025, for large operators and traders
• June 30, 2026, for micro and small enterprises

Impact: The Deforestation-free Products Regulation is crucial for businesses as it mandates compliance with deforestation standards, impacting supply chains by requiring traceability and transparency. Businesses must ensure their products do not contribute to deforestation, which involves rigorous monitoring and reporting. Affected businesses should make use of the extended compliance dates, ensuring that systems for monitoring and reporting are in place.

EU: Forced Labor Regulation

On December 12, the EU's Forced Labor Regulation was published. This Regulation aims to eliminate products made with forced labor from the EU market, requiring businesses to ensure their supply chains are free from such practices. It underscores the EU's commitment to combating forced labor and promoting ethical standards in global trade.

Impact: The Forced Labor Products Regulation will compel businesses to ensure their supply chains are free from forced labor, impacting global operations. Businesses must implement rigorous due diligence, including supplier audits and risk assessments, to comply. Preparing for this regulation involves restructuring supply chains, changing suppliers if necessary, and investing in compliance measures.

EU: 16 sanctions package against Russia

On 24 February, the EU adopted its 16^th package of sanctions against Russia, introducing several new measures aimed at addressing sanctions circumvention risks. The main elements include:

• targeted export restrictions on 53 new companies supporting Russia’s military-industrial complex or engaged in sanction circumvention, including 34 companies outside Russia
• a prohibition on temporary storage of crude oil/petroleum products in the EU if the goods originate in / are exported from Russia
• an import ban on Russian aluminum, and
• additional export restrictions on products including chemical precursors and software related to CNC machine tools used in weapon manufacturing

Impact: Businesses need to assess if the additional measures impact their global supply operations. More focus on transactional due diligence is expected from competent authorities, and ensuring that prohibited items are not ending up in Russia is of paramount important given the update in enforcement across the EU.

UK

UK: Upcoming updates to the UK strategic export control list

On 11 March 2025, the UK Government announced updates to UK Strategic Export Control List, with the following key changes:

• amendments in line with changes published in the control lists on The Wassenaar Arrangement website, as adopted into UK legislation – these include changes to the following control list entries: ML10, 1C002, 1C005, 3A002, 3C005, 5A001, 5E001, 5A002, 6A005, 8A001, 8A002, 9A004, 9B and 9E003
• editorial amendments to Technical Notes and definitions in certain entries, including an amendment to the definition of ‘spacecraft’ resulting in new definitions for ‘satellite’, ‘space probe’ and ‘space vehicle’
• amendments in line with changes agreed under the guidelines on the Nuclear Suppliers Group (NSG) website, which include changes to following control list entries: 0B004a, 0B004b, 1A202, 1A225, 1B228 and 6A225
• amendments in line with changes agreed under the Australia Group in the control list entry 2B352, and
• amendment to the technical parameters of the existing control under PL9013a4 aimed at high-end digital processing integrated circuits (ICs) most suitable for AI training

Impact: These changes will be implemented in the spring, with amended control lists published in due course. Businesses will need to assess whether the upcoming changes to UK Strategic Export Control List mean that their goods, software and technology are now subject to export licensing requirements.

UK: Procurement Act 2023 comes into force

On 24 February, the postponed Procurement Act 2023 was implemented. The legislation was delayed to allow for the publication of the UK Government’s new National Procurement Policy Statement (NPPS) on 13 February. Contracting authorities are required to “have regard” to the NPPS when undertaking regulated procurement activity, unless procuring under a framework or dynamic market.

The new NPPS sets out ways it encourages contracting authorities to contribute to the government’s aims through public procurement, such as

• driving growth and strengthening supply chains by ensuring that suppliers are treating workers fairly, and ensuring safe working conditions
• ensuring that suppliers are actively working to address bribery, corruption, fraud, modern slavery and human rights violations, and in compliance with tax, employment and other legal obligations

Impact: Businesses will need to ensure that their supply chains align with social value and environmental, social, and governance (ESG) commitments. Suppliers will be expected to demonstrate their commitment to anti-bribery, modern slavery, environmental considerations, and prompt payment.

UK: 10 Year Infrastructure Strategy

On January 26, the Government published the 10 Year Infrastructure Strategy. It aims to reduce uncertainty and boost investment in infrastructure, covering growth, housing, clean energy, and public services. It outlines a long-term plan for social, economic, and housing infrastructure, supported by public financing institutions like the National Wealth Fund. The strategy seeks to drive growth and productivity by providing stability and certainty to the market, aligning with the government’s broader growth mission.

Impact: By investing in infrastructure, the strategy aims to improve transportation networks and support the development of clean energy sources, ultimately leading to more reliable and efficient supply chains. Additionally, the focus on housing and public services may create new opportunities and demands within supply chains related to construction and service delivery.

UK: Human Rights Committee Inquires into Forced Labor in Supply Chains

On January 21, the House of Commons Joint Committee on Human Rights launched an inquiry into forced labor in global supply chains. The inquiry will review the adequacy of the Modern Slavery Act 2015 and other legislation. The Committee seeks written submissions by February 13, 2025, focusing on sectors at risk, due diligence, consumer attitudes, and public procurement’s role in forced labor exposure.

Impact: While the Committee has not yet published its findings, businesses should be aware of the potential for new stricter regulations and increased scrutiny of business practices. Businesses may need to enhance their due diligence processes, ensuring their supply chains are free from forced labor. This could involve more rigorous audits and closer monitoring of suppliers.

UK: Inquiry into the reset of UK-EU relations launched

On January 16, the House of Lords European Affairs Committee opened an inquiry and call for evidence on the “UK-EU reset”. This “reset” sets out to ensure closer cooperation with the EU and to put in place new agreements with the EU to cover trade, as well as security and defense. Rejoining the EU Single Market or Customs Union is not on the table. The inquiry will consider the substance of the reset, including what it is and the process for reset. At present the Government has identified the trade priorities as a veterinary/sanitary and phytosanitary agreement, mutual recognition of professional qualifications and easier EU access for UK touring artists.

Impact: For businesses trading with the EU, this is a chance to share insights on how UK businesses and the economy could benefit from changes to trading principles or terms. A successful “reset” in initial areas may reduce trading barriers and lay the groundwork for future trade agreements, enhancing the supply of goods and services between the UK and EU.

UK: Guidance on Countering Russian sanctions evasion

On January 7, the Department for Business and Trade and Office of Trade Sanctions published guidance to help UK businesses combat Russian sanctions evasion in supply chains. This includes a “no re-export to Russia” clause template and advice on identifying red flags for sanctions evasion. The guidance targets those exporting items critical to Russia’s military, emphasizing due diligence to prevent indirect procurement by Russia through third countries.

Impact: As Russian businesses continue to find loopholes in sanctions, this guidance underscores the importance of UK businesses to carry out effective due diligence. This will involve more thorough monitoring of transactions and suppliers, particularly those in third countries that might facilitate indirect procurement by Russia. Adapting to these requirements will help businesses avoid legal and reputational risks.

US

US: New tariffs on imported steel and aluminum apply from 12 March

On 12 March, increased tariffs on all steel and aluminum imports to the US came into effect. The tariffs have been increased to a flat rate of 25% (from the previous rate of 10%) “without exceptions or exemptions”. Existing country exceptions, quota deals and product-specific tariff exclusions for both metals have been eliminated under the new rules, which now also extend to downstream products using foreign-made steel. This includes products such as fabricated structural steel, aluminum extrusions and steel strand for pre-stressed concrete. To prevent imports of minimally processed metals, a requirement for steel imports to be “melted and poured” in the US is also introduced.

Impact: The new tariffs will raise costs for businesses importing steel and aluminum materials, and have potential to disrupt supply chains as companies try to find alternative suppliers. Importers will need to ensure compliance with the new rules, including providing documentation to verify the origin and processing of steel articles.

US: Further tariff announcements expected

Announcements on further tariffs are expected on 2 April, following the delivery of reports directed by the America First Policy Memorandum, and Defending American Companies and Innovators from Overseas Extortion and Unfair Fines and Penalties memorandum. These are likely to include announcements of reciprocal tariffs on the EU and various other countries, as well as the introduction of tariffs or investigations into several industries (including the pharmaceuticals, automobiles and semiconductors).

The current status of tariffs on goods from Mexico and Canada may also be subject to change. 25% tariffs on goods imported from Mexico and Canada, and 10% tariffs on energy resources from Canada came into effect on March 4. However, on March 6 a temporary exemption was introduced for certain goods under the United States-Mexico-Canada Agreement (USMCA).

In addition, President Trump has ordered investigations into the copper, timber and lumber industries, which could result in additional tariffs on imports. Investigation reports are due in November 2025.

For more information please see our Trump Administration Legal Impact Hub, and briefing on Executive Orders on timber and lumber.

US: Proposed measures to crackdown on de minimis shipments

In a series of Executive Orders from the start of 2025, President Trump has signaled a halt to low-value import exemptions. Currently, a shipment is eligible for the de minimis exemption if the value of the articles imported is less than $800 per day per person.

Similar measures aimed at low-value imports from Canada and Mexico, were announced and then paused until March 4, 2025. After initially coming into force for goods from China, on February 7, 2025, President Trump paused the measure. In the first week of March 2025, President Trump signed further Executive Orders to provide that products of Canada and Mexico entered into the US using the de minimis exemption could continue to do so. This is intended to give the Commerce Department time to make the order workable.

Impact: Although there is some uncertainty on the timings and the extent of the proposed measures, a crackdown on the de minimis exemption could happen in 2025 as there is political consensus. The Biden administration announced measures to restrict low-value imports in September 2024.

Some businesses, particularly in China, have expanded in the US with direct-to-consumer business models based on the $800 de minimis rule to keep prices low. These importing manufacturers may face higher costs and increased tariffs on low-value goods. This change could disrupt supply chains and raises prices for consumers. Manufacturers may have to navigate more complex customs procedures and compliance requirements, impacting their operational efficiency and profitability.

Extra customs checks could also impact shipping operators.

US: Executive Order imposing tariff on Chinese goods

On February 4, President Trump’s Executive Order imposing a 10% tariff on all products from China became effective. This amount was subsequently increased to 20% on March 3. This action is in response to China’s reported failure to control the export of fentanyl and related chemicals. President Trump confirmed these tariffs will remain until adequate steps are taken to alleviate the issue.

Impacts: The 20% tariff on Chinese goods will increase import costs, potentially raising prices for U.S. consumers and businesses. Supply chains may face disruptions as companies seek alternative sources or adjust procurement strategies. The tariffs could also further strain US-China trade relations, impacting broader economic and trade dynamics.

US: Executive Order establishing a Sovereign Wealth Fund

On February 2, President Trump signed an Executive Order to establish a US Sovereign Wealth Fund. The plan, to be developed by the Treasury and Commerce Secretaries, will include funding mechanisms, investment strategies, and a governance model. The fund seeks to enhance fiscal sustainability, reduce tax burdens, and secure economic security for future generations. The plan will be submitted to the President within 90 days.

Impact: Once established, the wealth fund may provide financial stability and investment in infrastructure, technology, and innovation. This could enhance domestic production capabilities, reduce reliance on foreign suppliers, and strengthen supply chain resilience. Additionally, strategic investments might support critical industries, further securing supply chains against global disruptions.

US: Inflation Reduction Act funding frozen

On January 22, an Executive Order was issued suspending all funding disbursements for the Inflation Reduction Act and the Infrastructure Investment and Jobs Act. Federal agencies have 90 days to review and submit spending recommendations.

Impact: The decision aims to eliminate regulatory barriers and simplify permitting processes. This suspension affects supply chains for clean energy projects, potentially delaying or halting ongoing and planned initiatives. Businesses involved in these projects may need to reassess their operations and secure alternative funding.

US: Stargate project Announced

On January 21, the Stargate project, a Government joint venture with several private organizations was announced by President Trump at a press conference. The plan involves investing up to $500 billion in AI infrastructure, aiming to build data centers and electricity generation. The project seeks to enhance AI development, optimize supply chains, and drive innovations in digital health records and customized vaccines.

Impact: The Stargate project’s announcement will have both direct and indirect impacts on supply chains. Directly, the investment in AI infrastructure, such as data centers and electricity generation, will enhance the efficiency and resilience of supply chains by optimizing logistics, improving inventory management, and predicting demand more accurately. Indirectly, advancements in AI technology can lead to innovations in various industries, further improving supply chain processes and creating new opportunities for growth and efficiency.

US: Executive Order on Trade Policy

On January 20, an Executive Order was issued, that emphasizes the use of tariffs and trade barriers to protect American industries and jobs. Under President Trump, trade policy will be treated as a critical component of national security, aiming to reduce dependence on foreign countries for key security needs. The order will lead to the establishment of an External Revenue Service, which will collect tariffs, duties, and other foreign trade-related revenues.

Impact: This Executive Order underscores the wider shift towards self-reliance under the Trump administration. As a result of the higher tariffs implemented, the flow of international goods may be affected, requiring businesses linked to the US to re-evaluate and adjust their supply chains to mitigate potential impacts.

US: Amendments to H-1B visa eligibility requirements published

On January 17, the final rule updating H-1B visa eligibility requirements became effective. The rule revises the definition of "specialty occupation," updates definitions for nonprofit and governmental research organizations, and clarifies visa petition requirements.

Impact: Employers should prepare for potential disruptions as new forms and standards are implemented. Businesses may need to adjust hiring practices, update compliance procedures, and train staff on new requirements to ensure smooth operations and avoid disruptions.

US: Final Rule to Ban Imports, Sales of Connected Vehicles with China/Russia Links published

On January 16, the Department of Commerce Bureau of Industry and Security issued a final rule prohibiting the import and sale of connected vehicles and systems with components from China or Russia. This rule targets Vehicle Connectivity Systems (VCS) and Automated Driving Systems to mitigate national security risks. It emphasizes due diligence and recordkeeping for supply chains, requiring declarations of conformity and prohibiting transactions involving VCS hardware or software from entities linked to China or Russia.

Impact: The rules require automotive manufacturers and suppliers to verify that the connected vehicle or advanced autonomous vehicle software used in their products has not been developed in China, Russia or other similar countries. Certain importers and manufacturers are required to submit annual Declarations of Conformity to certify their compliance with the prohibitions.

The rule will be implemented from model year 2027 for software-related prohibitions, and from model year 2030, or January 1, 2029, for hardware-related prohibitions.

For more information, please see our briefing.

US: FDA issues proposed rule on packaging nutrition labelling

On January 14, the Food and Drug Administration (FDA) issued a proposed rule on front-of-package nutrition labeling. The rule requires food products to display a “Nutrition Info” box on the top third of the principal display panel, showing the percent Daily Value (%DV) for sodium, saturated fat, and added sugars, with interpretive markers “High,” “Med,” or “Low.” The rule aims to help consumers make healthier dietary choices. Comments are due by 16 May 2025.

Impact: This proposed rule is significant for both domestic and global supply chains as it standardizes nutrition labeling, potentially influencing international food labeling practices. Businesses will need to update their packaging to comply with the new labeling requirements, ensuring accurate %DV information and interpretive markers are displayed. This may involve redesigning labels, adjusting production processes, and training staff to understand and implement the new standards.

US: Supply Chain Resiliency Initiative approved

On January 7, the Export-Import Bank of the United States approved the Supply Chain Resiliency Initiative to reduce reliance on China for critical minerals and rare earth elements. This initiative provides financing to secure these materials from trusted international partners, supporting U.S. manufacturing and national security. It aims to strengthen domestic supply chains, protect American jobs, and foster economic growth by ensuring critical resources are available for transformative technologies like battery storage and semiconductors.

Impact: The Supply Chain Resiliency Initiative will diversify supply sources, reducing dependency on China for critical minerals and rare earth elements. This will enhance the stability and security of supply chains, support U.S. manufacturing, and ensure the availability of essential materials for advanced technologies, fostering a more resilient and robust supply chain network.

US: Consultation launched on potential unmanned aircraft system technology rules

On January 2, the Department of Commerce’s BIS issued an advance notice of proposed rulemaking to secure the Information and Communication Technology and Services (ICTS) supply chain for unmanned aircraft systems. The notice seeks public comment on definitions, risk assessments, and mitigation measures related to UAS components from foreign adversaries. This step aims to protect U.S. national security by addressing vulnerabilities in the commercial drone market. Public comments are due by March 4, 2025.

Impact: The proposed rules aim to secure the ICTS supply chain by addressing risks from foreign adversaries. This could lead to stricter security measures, supply chain disruptions, increased costs, and market shifts favoring domestic suppliers. While enhancing national security, these changes may drive innovation but also pose challenges for businesses adapting to new regulations.

Further reading

U.S. and China tighten respective export restrictions on advanced technology and critical minerals

Reading the Tea Leaves on Mexico, Canada and China Tariffs

Co-authored by Nathan Handoll and Claire Webb in Knowledge