International Strategy

On 3 December 2025, the European Commission adopted the RESourceEU Action Plan, signaling that Europe’s industrial competitiveness will increasingly depend on its ability to secure and diversify critical raw material (“CRM”) supply chains.  For companies, inside and outside the EU, RESourceEU is more than a technical update: it marks a policy shift toward a more interventionist and security-driven approach to CRM governance.

The analysis below outlines the drivers behind the initiative, its main components, and the implications for multinationals trading into the EU.Continue Reading RESourceEU Action Plan – Strengthening the EU’s Access to Critical Raw Materials

On 3 December 2025, the European Commission unveiled the next phase of its economic security agenda.  Building on the 2023 Economic Security Strategy and the 2024 European Economic Security Package (see our prior blog), the new communication sets out a more assertive and coordinated approach to managing risks linked to trade, investment, technology and critical infrastructure.

The EU intends to remain open to trade and investment, but that openness will increasingly be conditioned on economic security objectives.  For businesses and investors, this translates into more scrutiny, more due diligence, and a more integrated interplay between the EU and Member States.Continue Reading Strengthening EU Economic Security – More of the Same or a New Approach?

The government is officially closed, and the House of Representatives is in an extended recess, but the Senate keeps working. 

On Wednesday October 22, the Senate Foreign Relations Committee held a business meeting to consider 19 bills and approve two nominations (Joel Rayburn to be Assistant Secretary of State for Near Eastern Affairs and Andrew Veprek to be Assistant Secretary of State for Population, Refugees and Migration).  The bills focused mostly on Russia’s war in Ukraine, and on security concerns relating to China, and generally commanded bipartisan support.  All of the bills were approved, though some were amended.

One of the more consequential bills was the “REPO Implementation Act”, S. 2918, sponsored by Sen. Whitehouse, and co-sponsored by, among others, Foreign Relations Committee Chairman Risch.  This bill seeks to build on last year’s “Rebuilding Economic Prosperity and Opportunity for Ukrainians Act”, or “REPO Act”.  That legislation granted authority to the President to confiscate the approximately $5 billion in immobilized Russian sovereign assets in the United States and provide that money to Ukraine and Ukrainian claimants as compensation for the injuries inflicted on them by the war. Continue Reading Senate Foreign Relations Committee Action on Russia and China-related Legislation

Friday the White House released an executive summary of the policy reviews President Trump ordered in his America First Trade Policy (AFTP) memorandum, issued on January 20.  Although the full report to the President is nonpublic, according to the executive summary it contains twenty-four chapters, organized into three main…

Continue Reading Agencies Deliver America First Trade Policy Recommendations to White House

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:

  1. that the rights of the United States under any trade agreement are being denied;
  2. 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
  3. 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

As the world anticipates the return of Donald Trump to the White House, the European Union (“EU”) braces for significant impacts in various sectors. The first Trump administration’s approach to transatlantic relations was characterized by unpredictability, tariffs on imported goods, a strained NATO relationship, and withdrawal from the Iran nuclear deal and the Paris climate agreement. If past is prologue, the EU must prepare for a renewed era of uncertainty and potential adversarial policies.

Trade Relations

Trump’s self-proclaimed identity as a “tariff man” suggests that trade policies would once again be at the forefront of his administration’s priorities. His campaign promises, which include imposing global tariffs on all goods from all countries in the range of 10 % to 20%, signal a departure from traditional U.S. trade policies. Such measures could have severe repercussions for the EU, both directly through increased tariffs on its exports and indirectly via an influx of dumped products from other affected nations, particularly China. Broad-based tariffs of this nature would likely provoke retaliatory measures from the EU.

The EU’s response toolkit would likely mirror many of the actions it employed between 2018 and 2020 in reaction to U.S. tariffs imposed during the first Trump administration. These measures would include retaliation on U.S. products to maximize political pressure by targeting Trump-supporting constituencies, pursuing chosen legal challenges against the U.S. at the World Trade Organization, and implementing safeguards to shield the EU market from an influx of Chinese and other diverted goods following U.S. tariff hikes. Very practically, the EU has suspended tariffs on US exports of steel and aluminum to its market worth €2.8 billion. The suspension expires on 1 March 2025, requiring an active decision on whether to reintroduce them or not.

In executing these measures, the EU is expected to collaborate with allies such as the UK, Canada, Japan, Australia, and South Korea to amplify its response. The EU may also explore smaller trade agreements or informal “packages” with the U.S. as part of a negotiated tariff truce. Broader protective measures could also be pursued, focusing on subsidies and industrial policies aimed at strengthening Europe’s strategic sectors, beyond actions specific to the U.S. Some cooperation with the U.S. on China may also be possible in areas like export control, investment control, and dual-use technologies.Continue Reading Policy Implications for Europe Under a Second Trump Administration

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

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

June 18, 2024, Covington Alert

On June 12, 2024, the U.S. Department of the Treasury, Office of Foreign Assets Control (“OFAC”) and the U.S. Commerce Department, Bureau of Industry and Security (“BIS”) issued additional measures to counter Russia’s continued aggression in Ukraine. The measures, announced in advance of the G7 summit in Italy last week, are intended to “continue to drive up costs for the Russian war machine.”

The actions taken by OFAC and BIS include new prohibitions on providing certain information technology- and software-related services to persons located in Russia, establishing additional sanctions designed to target the Russian financial infrastructure, strengthening secondary sanctions that can be applied to non-U.S. persons (including in particular non-U.S. financial institutions), and expanding export controls restrictions on items destined for Russia and Belarus (including with respect to certain types of software). Along with the new rules, OFAC designated for property-blocking sanctions more than 300 individuals and entities (including parties identified for sanctions by the U.S. State Department), while BIS used its authority to make additions to the Entity List, issue Temporary Denial Orders, and notify U.S. distributors of additional restrictions on shipments to parties known to be supplying items to Russia. Significantly, BIS altered its Entity List rules to permit certain address-only designations to the Entity List and, among other designations, added to the Entity List eight addresses in Hong Kong with a high diversion risk. Exports, reexports, or transfers of certain items subject to the Export Administration Regulations (“EAR”) to purchasers, intermediate or ultimate consignees, and end ­users who use those addresses generally will require authorization from BIS.

Separately, on June 13, 2024, the UK Government imposed a new round of asset-freezing sanctions on a number of notable Russian entities. The European Union is also considering a 14th package of sanctions measures relating to Russia, although as of this writing the EU has not yet enacted the new package.

New U.S. Sanctions

Prohibition on Certain Information Technology and Software Services

As part of the joint actions, OFAC issued a determination pursuant to the authority of Executive Order 14071 (the “IT and Software Services Determination”) that prohibits the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a U.S. person, wherever located, of (i) information technology (“IT”) consultancy and design services, and (ii) IT support services and cloud-based services for enterprise management software and design and manufacturing software (collectively, “Covered Software”) to any person located in the Russian Federation, unless licensed or otherwise authorized by OFAC. The IT and Software Services Determination is effective beginning at 12:01 eastern daylight time on September 12, 2024. “U.S. persons” include U.S. legal entities and their non-U.S. branches; U.S. citizens and lawful permanent residents, no matter where located or employed; and persons present in the United States.Continue Reading U.S. Government Issues New U.S. Sanctions and Export Controls Targeting Russia and Belarus for Continued Aggression Against Ukraine; Update on European Sanctions Developments

As the energy transition gathers pace, the need for access to the essential raw materials which underpin it, is also accelerating:

  • An electric car needs six times more rare earth minerals than a conventional vehicle;
  • An onshore wind plant needs nine times more materials than a comparable gas facility;
  • Between 2017 and 2022, the energy sector drove a tripling of global demand for lithium, whilst demand for cobalt and nickel rose by 70% and 40%[1] respectively;
  • Between three to 6.5 billion tonnes of transitional minerals will be needed over the next three decades if the world is to meet its climate goals[2].

The current and future global demand for transitional metals and minerals offers a potentially huge economic opportunity[3]. This is particularly the case for Africa, where more than 50% of the world’s cobalt and manganese, 92% of its platinum and significant quantities of lithium and copper are to be found. Almost all of the continent’s current output is presently shipped as ore for processing in third countries, meaning the potential economic benefit of this enormous mineral wealth has not filtered through to the real economics in its African source countries[4].  Africa exports roughly 75% of its crude oil, which is refined elsewhere and re-imported as (more expensive) petroleum products; and exports 45% of its natural gas, whilst 600 million Africans have no access to electricity (approximately 53% of the continent’s population)[5].

A number of African governments have expressed their determination to avoid repeating the ‘resource curse’ mistakes of the past, by using the continent’s natural resources to drive domestic economic growth, while creating meaningful domestic job opportunities, rather than exporting them and the consequent economic growth elsewhere.  This approach has led a number of African countries to impose export restrictions on raw minerals; promote domestic processing; and demand that agreements with third countries promote technology transfers and improve domestic processing capacities and workforce skills.

Sustainable use of transition minerals

A resolution to promote equitable benefit-sharing from extraction was recently presented at the UN environmental assembly in Nairobi calling for the sustainable use of transitional minerals[6].  The Resolution, which was supported by a group of mainly African countries including the DRC, Senegal, Burkina Faso, Cameroon and Chad, was described as being ‘crucial for African countries, the environment and the future of [African nations’] populations.”

A number of African countries have already taken steps to protect their natural resources and move up the processing value chain[7].Continue Reading African Raw Material Export Bans: Protectionism or Self-Determination?