On May 12, 2025, President Trump issued an Executive Order titled “Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients” and an accompanying “Fact Sheet: President Donald J. Trump Announces Actions to Put American Patients First by Lowering Drug Prices and Stopping Foreign Free-riding on American Pharmaceutical Innovation
Continue Reading Trump Administration Issues Executive Order on “Most-Favored-Nation” Prescription Drug Pricing
Trump 2.0 Tariffs and Commercial Disputes: Key Questions to Consider
Introduction
The Trump Administration’s implementation of significant and widespread tariffs – and the potential for additional and farther-reaching tariffs – represents more than just a trade challenge. For companies engaged in international commerce, the uncertainty created by these measures increases the risk of commercial disputes. Among other things, tariffs can increase costs, reduce margins, and reveal contractual assumptions and ambiguities that lead to disputes throughout the supply chain: between buyers and sellers, manufacturers and distributors, and in a variety of other business dealings.
Below we highlight four key questions for assessing and mitigating commercial dispute risks. Whether reviewing existing contracts or negotiating new ones, companies should take strategic steps to protect their interests and minimize potential disputes and supply chain disruptions.
Background: Tariffs Under the Trump Administration
Since the America First Trade Policy memorandum that President Trump signed on the first day of his second term, the current administration has imposed a variety of country- and product-specific tariffs, threatened additional tariffs, and promised other future actions. Importers, foreign producers, and U.S. purchasers of imported products all face a heightened risk that products that they have contracted to purchase or supply may be impacted by tariffs, at times potentially altering the fundamental bargain between the parties. The threat of retaliatory tariffs leads to even further uncertainty.
At the time of publication, the Trump Administration has imposed or threatened to impose a variety of tariffs under an array of different statutory authorities. For instance:
- Canada, Mexico, and China Tariffs: President Trump ordered 20% tariffs on products from China and 25% tariffs on products from Canada and Mexico not covered by the U.S.-Mexico-Canada Agreement (“USMCA”) under the International Economic Emergency Powers Act (“IEEPA”).
- Steel and Aluminum Tariffs: Separately, for the Section 232 tariffs on steel and aluminum, President Trump removed country-specific exemptions, is phasing out the product-specific exclusions and removing General Approved Exclusions, and is creating a petition process for the expansion of the tariffs to derivative steel and aluminum products not already covered.
- Reciprocal Tariffs: Meanwhile, the Office of the U.S. Trade Representative and the Department of Commerce are leading a broad review of foreign trade partners to determine whether they are imposing nonreciprocal tariffs and other trade restrictive measures, for the United States to respond in kind (possibly with higher tariffs of its own).
- Other Potential Tariffs: All the while, myriad agencies are reporting to the President in April on a variety of trade and tariff issues, which could serve as the foundation for additional, future tariff actions by the Trump Administration.
Continue Reading Trump 2.0 Tariffs and Commercial Disputes: Key Questions to Consider
USTR Seeks Public Comment on Unfair or Non-Reciprocal Trade Practices
On February 20, 2025, the Office of the U.S. Trade Representative (“USTR”) announced that it is seeking public comments on any unfair trade practices and non-reciprocal trade arrangements implemented by foreign trading partners. The comment period is currently open and the deadline for submitting comments is March 11, 2025.
According to the Federal Register notice, comments can be submitted through a portal accessible at https://comments.ustr.gov/s/, under docket number USTR-2025-0001. USTR will accept comments from any interested party, including businesses, individuals, and trade associations, among others. Interested parties are able to include business confidential information in their submissions, which will not appear in the public version of their comments.
USTR’s announcement also stated that the public comment process is not the only opportunity to provide information to the agency on these issues, and that USTR “welcomes ongoing engagement with and information from any interested party.”
This comment period offers a new opportunity for U.S. exporters to seek the Administration’s potential support in eliminating foreign market access barriers. If you are interested in submitting comments to USTR as part of this process, Covington can assist in the preparation and transmission of these comments. We would also be happy to assist in crafting a broader strategy for engaging USTR and other relevant agencies on these or other trade-related issues.
Background
USTR’s launch of this public comment process follows the issuance of the “America First Trade Policy” memorandum by President Trump on his first day in office, which directed USTR to lead a review of unfair foreign trade practices and to recommend appropriate remedies. USTR also linked the comment process to President Trump’s “Reciprocal Trade and Tariffs” memorandum issued on February 13, which directed USTR and the Commerce Department to investigate “the harm to the United States from any non-reciprocal trade arrangements adopted by any trading partners” and to recommend actions in response. Covington’s alert on this memorandum is available here.
Scope of Requested Comments
USTR has invited comments on a country-by-country basis (or also on an economy-wide basis in the case of the European Union) regarding (i) “any unfair trade practice by a foreign country or economy”; or (ii) “any non-reciprocal trade arrangements.” USTR has defined unfair trade practices broadly, to include “policies, measures, or barriers that undermine or harm U.S. production, or exports, or a failure by a country to take action to address a non-market policy or practice in a way which harms the United States.” USTR has also requested that comments quantify the harm caused by such practices—ideally with a corresponding dollar amount—and to explain the underlying methodology used to calculate that figure.Continue Reading USTR Seeks Public Comment on Unfair or Non-Reciprocal Trade Practices
Trump Administration Imposes Tariffs on Imports from Canada, Mexico, and China
On February 1, President Trump issued three executive orders (“EOs”) imposing broad tariffs on U.S. imports from Canada, Mexico, and China, initially to be effective on February 4. Invoking Presidential authority under the International Emergency Economic Powers Act (“IEEPA”), the EOs expand the national emergency declared by
Continue Reading Trump Administration Imposes Tariffs on Imports from Canada, Mexico, and ChinaSection 301 Tariffs and Proceedings: Recent and Potential Developments
Alert December 19, 2024
As discussed in our prior client alert, President-elect Trump’s second term is expected to bring important changes to U.S. trade policy, including with respect to U.S. tariffs. Among the tools Trump may use to modify existing U.S. tariffs is Section 301 of the Trade Act of 1974 (“Section 301”), which provided the vehicle for imposition of tariffs against China under the first Trump administration. More recently, the Biden administration has initiated new proceedings under Section 301, while also modifying existing Section 301 tariffs against China. This alert provides an overview of Section 301, explores how Section 301 has been used by recent administrations to increase tariffs on imports from China, and surveys other Section 301 actions, including currently pending investigations. This alert also examines how a second Trump administration could reactivate or modify Section 301 tariffs that were previously announced, but have been suspended or terminated.
Overview of Section 301
Section 301 is an investigative tool under U.S. trade law that allows the Office of the U.S. Trade Representative (“USTR”) to pursue unilateral trade retaliation against countries that impose unfair trade barriers against the United States. USTR may launch Section 301 investigations in response to the filing of a petition submitted by an “interested party,” or upon USTR’s own initiative. Once a Section 301 investigation is launched, the statutory deadline for completion is typically between 12 and 18 months. Under the first Trump administration, USTR often did not use the full period provided under the statute, instead completing certain investigations several months before the statutory deadline.
As part of the investigative process, USTR must request consultations with the foreign government whose conduct is at issue, and it will generally also solicit public comments and hold a hearing as part of its investigation. At the end of the investigation, USTR is authorized to impose duties or other trade restrictions where it has determined:
- that the rights of the United States under any trade agreement are being denied;
- that an act, policy, or practice of a foreign country violates, is inconsistent with, or otherwise denies the United States the benefits of any trade agreement; or
- that an act, policy, or practice of a foreign country is unjustifiable and burdens or restricts U.S. commerce.
Once imposed, Section 301 tariffs must be terminated after four years unless an extension is requested. As explained below, USTR under certain conditions can also modify existing Section 301 duties or reinstitute previously suspended or terminated Section 301 actions.Continue Reading Section 301 Tariffs and Proceedings: Recent and Potential Developments
Trade Policy Under a Second Trump Administration and Implications for Business
November 25, 2024, Covington Alert
The inauguration of President Trump on January 20 is expected to bring important changes to U.S. trade policy that are likely to affect companies that supply international customers, or are reliant on global supply chains. As discussed in our prior client alert, international trade is expected to be a key focus of President Trump, who has repeatedly expressed a preference for using tariffs as a policy tool to create perceived leverage for dealmaking with international partners on both economic and non-economic issues. Recent announcements by the Trump transition team regarding cabinet and staff appointments reinforce the view that trade policy under a second Trump administration could involve significant unilateral U.S. action, including the imposition of substantial new tariffs and a hawkish stance toward China. These new tariffs could be implemented swiftly after Trump takes office, or could alternatively be subject to more extensive investigative and reporting procedures, depending on the legal authority invoked. New tariff measures, as well as other trade actions Trump has proposed, could lead to retaliatory responses by U.S. trading partners, including key U.S. allies. This alert explores how trade policy may be implemented by a second Trump administration, and considers how companies may prepare for and mitigate the risks associated with these developments.
Cabinet Nominations and Other Economic Appointees
In recent weeks, Trump has announced several cabinet and staff appointments for his second administration, including individuals responsible for implementing trade policy. Key among them is Howard Lutnick, chairman and CEO of a Wall Street investment firm and co-chair of Trump’s transition team, whom Trump has selected to be Secretary of Commerce. Echoing Trump’s own views, Lutnick has been a strong advocate for using tariffs as an industrial policy tool and bargaining chip to rebalance U.S. trade, though he has suggested tariff measures under a second Trump administration may be more “targeted” than the universal 10 to 20 percent tariffs proposed by Trump during his campaign. In announcing Lutnick’s forthcoming nomination, Trump noted Lutnick would lead the administration’s “Tariff and Trade agenda,” and that he would have direct responsibility over the Office of the United States Trade Representative (“USTR”). As USTR is a separate agency established by Congress within the Executive Office of the President to lead on trade issues, it is uncertain if the announcement was referring to informal oversight over USTR or a formal restructuring of the agency. Should Trump seek to consolidate USTR within or under the Commerce Department, he may face opposition from Congress, whose approval would be required for such a reorganization. Continue Reading Trade Policy Under a Second Trump Administration and Implications for Business
The Impact of the U.S. Elections on Trade and International Supply Chains
October 28, 2024, Covington Alert
The upcoming U.S. presidential election on November 5 will have important implications for U.S. trade policy that are likely to affect companies reliant on international supply chains. There are important differences in how former President Donald Trump and Vice President Kamala Harris approach the use of trade tools to advance U.S. policies and priorities, including whether such tools should be deployed unilaterally, or as part of a collective action with U.S. allies.
For instance, a victory by Harris will likely signal continuity in the current approach of the Biden administration, in which trade has not been a central policy priority, but has instead taken a backseat to—and been used as a tool to support—other key policies on climate, technology, human rights, and industrial development. While a Harris administration is therefore unlikely to pursue new trade initiatives aimed at increased market access, a Harris administration may consider joint action with U.S. allies and likeminded trading partners, or at least be receptive to input from such partners in pursuing trade-related actions.
In contrast, trade is expected to take center stage under a second Trump administration, with unilateral action expected to be the preferred approach. Trump has repeatedly referred to tariffs as his policy tool of choice, and views tariffs as important in creating leverage for dealmaking with international partners on both economic and non-economic issues. Trump and his economic advisors also view the U.S. trade balance as an important measure of economic performance, and bilateral trade deficits are likely to face scrutiny and provoke potential action.
This alert explores certain key trade issues to be confronted by the next administration, assesses how each candidate may approach these issues differently, and considers how companies may prepare for and mitigate the risks associated with each candidate’s approach.
Divergent Approaches to U.S. Tariffs
While Congress has primary constitutional authority over tariffs and other trade policy matters, the President has broad authority to adjust tariffs and impose other import restrictions under certain statutes, without approval from Congress. The outcome of the U.S. election will determine to a great extent the importance that tariffs will play as a U.S. policy tool over the next four years.Continue Reading The Impact of the U.S. Elections on Trade and International Supply Chains
Protecting Against Russia’s Asset Seizures: Investment Treaties May Provide a Remedy for Foreign Investors
On Sunday, July 16, Russian President Vladimir Putin signed a decree putting shares of Danone Russia JSC, owned by French yogurt maker Danone, and of Baltika Brewing Company, owned by Danish brewer Carlsberg A/S, under “temporary management.”
The Kremlin has since reportedly appointed Yakub Zakriev, deputy prime minister and agriculture minister of Chechnya, as head of the Danone business.[1] Mr. Zakriev has been described as a close ally of Ramzan Kadyrov, the notorious leader of the Chechen Republic, and himself a close ally of President Putin.[2] Meanwhile, Taimuraz Bolloev, a longtime friend of Putin, has been installed as director of Carlsberg’s Baltika business.[3]
These recent seizures follow a decree Putin signed in April, laying the groundwork to expropriate, damage, or otherwise impair the investments of companies from “unfriendly” countries—including the U.S., UK, Canada, all EU member states, Japan, Singapore, and South Korea.[4] This is the second time Russia has used the decree to seize assets. Previously, Russia took control of utilities owned by Finland’s Fortum Oyj and Germany’s Uniper SE.[5]
These Russian actions demonstrate the significant risks for foreign companies that continue to operate in Russia and signal further potential asset seizures, including the possible transfer of foreign assets to regime-friendly owners. Russia’s measures appear to constitute uncompensated expropriations, for which investors could seek redress under Russia’s network of bilateral investment treaties (BITs).[6]
In prior Covington alerts, we have discussed how foreign investors in Russia can protect their investments from Russian retaliatory measures by ensuring that they have access to international arbitration, including through BITs. We also have highlighted certain key protections available under BITs that may provide recourse to foreign investors affected by Russia’s recent measures. In this alert, we focus on those protections under Russian BITs of most direct relevance to foreign investors whose assets have been expropriated or that have had the management of that investment obstructed by Russia’s actions, present and future.
Key Protections in Russian BITs
Russia has BITs in force with over 60 countries, including many EU members (such as Austria, Belgium, Bulgaria, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Lithuania, Italy, Luxembourg, the Netherlands, Romania, Slovakia, Spain, and Sweden) and countries such as Canada, Japan, Korea, Switzerland, the UK, and Ukraine. There is no BIT between Russia and the United States, but U.S. companies may nonetheless benefit from BIT protection if they hold their investments in Russia through a third country that does have a Russian BIT.
In its BITs, Russia has committed to, among other things, treat investors from the relevant countries in a fair and equitable manner, not to discriminate against such investors on the basis of nationality, not to expropriate their investments except under certain conditions and upon payment of adequate compensation, and to guarantee their right to freely transfer payments related to their investments out of Russia. All of these protections are relevant in the present context.Continue Reading Protecting Against Russia’s Asset Seizures: Investment Treaties May Provide a Remedy for Foreign Investors
The World Court Set to Become the Latest Venue for Climate Change Jurisprudence
UN General Assembly Adopts Resolution Requesting Advisory Opinion on States’ Obligations Concerning Climate Change
On March 29, 2023, the UN General Assembly (“UNGA”) adopted by consensus a resolution (A/77/L.58) requesting an advisory opinion from the International Court of Justice (“ICJ” or “Court”) on the obligations of states in respect of climate change. The resolution results from coordinated efforts by the Republic of Vanuatu, along with a “Core Group” of states, including Antigua and Barbuda, Bangladesh, Costa Rica, the Federated States of Micronesia, Morocco, Mozambique, New Zealand, Portugal, Samoa, Sierra Leone, Singapore, Uganda, and Viet Nam. The efforts of the Core Group drew on grassroots and civil society support, and the resolution was ultimately co-sponsored by more than 130 UN member states (although not the United States, Brazil, India, China, or Russia).
This marks the latest effort to ask international courts and tribunals to clarify the legal obligations of states in relation to climate change. In the last few months, similar requests for advisory opinions have been submitted to the International Tribunal for the Law of the Sea (“ITLOS”) and the Inter-American Court of Human Rights (“IACHR”).
Questions in the UNGA Resolution
The UNGA resolution observes that “as temperatures rise, impacts from climate and weather extremes […] will pose an ever-greater social, cultural, economic and environmental threat.” It asks the ICJ to issue its opinion on the following questions:
a) What are the obligations of States under international law to ensure the protection of the climate system and other parts of the environment from anthropogenic emissions of greenhouse gases for States and for present and future generations;Continue Reading The World Court Set to Become the Latest Venue for Climate Change Jurisprudence
IPEF Partners Adopt Ministerial Statement and Negotiation Objectives
On September 8 and 9, top trade officials of the United States and the other Indo-Pacific Economic Framework (“IPEF” or “Framework”) partner countries—Australia, Brunei Darussalam, Fiji, India, Indonesia, Japan, Republic of Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand and Vietnam—launched formal negotiations in Los Angeles.
This marked the first in-person ministerial-level meeting since the IPEF launched on May 23, 2022 and follows three informal meetings since May 2022, the latest event being the virtual ministerial on July 26-27, discussed in detail in our previous post.
The Los Angeles ministerial involved intensive discussions on what to include in the scope of the Framework. Ultimately, the IPEF partners reached consensus on ministerial statements for each of the four IPEF framework pillars: Trade, Supply Chain, Clean Economy, and Fair Economy. All 14 IPEF partners have joined three of the pillars, and 13 joined the fourth—with just India opting out of the Trade pillar. While this near unanimous support for the four pillars is certainly a positive sign, the real work begins now.
This blog post summarizes how the ministerial statements characterize the four pillars and outlines next steps for the Framework and key remaining questions.
Takeaways from the Ministerial Statements
The ministerial statements confirmed the four pillars of negotiation and provided added clarity on the scope and content of each pillar. While the statements add little to the substance, they indicate a political commitment among the partners to the Framework.Continue Reading IPEF Partners Adopt Ministerial Statement and Negotiation Objectives