In April 2025, CDU, CSU, and SPD – the coalition parties almost certainly forming Germany’s next federal government – announced their intention to repeal the German Supply Chain Due Diligence Act (Lieferkettensorgfaltspflichtengesetz (LkSG)) as part of a broader initiative to reduce administrative and economic burdens. According to the coalition agreement, the LkSG shall be replaced with legislation implementing the EU Corporate Sustainability Due Diligence Directive (CSDDD) in a bureaucracy-light and enforcement-friendly manner. The reporting obligations under the LkSG shall be abolished immediately, and enforcement of existing obligations shall be suspended, except in cases of grave human rights violations, until the new EU-aligned framework enters into force and is implemented in German law.
Over the years, we’ve encountered numerous supply chain challenges, and one recurring issue is the incorrect application of force majeure of contract. Often, suppliers attempt to invoke these clauses to escape their contractual obligations when the contract becomes unprofitable or too costly due to rising energy and fuel prices. This misuse could become more prevalent if suppliers are held accountable for tariffs affecting supply.
For a deeper understanding of how force majeure truly operates, Max Rockall and Tim Flamank have prepared an insightful article.
The Federal Register notice initiating the investigation identified the following seven global maritime passageways that may be subject to such constraints: (1) the English Channel, (2) the Malacca Strait, (3) the Northern Sea Passage, (4) the Singapore Strait, (5) the Panama Canal, (6) the Strait of Gibraltar and (7) the Suez Canal. The FMC announcement is another sign of the continued merger of national security, trade issues and global shipping and transportation issues. Continue reading here.
Territorial Supply Constraints (TSCs) refer to a range of practices used by brands and manufacturers that limit where retailers, wholesalers and distributors source their products – for example, preventing them from buying products from outside the country where they operate.
EU competition law does not outright prohibit TSCs, as TSCs are necessary in some situations and indeed can lead to lower prices for consumers. However, the Commission has conducted several investigations into restrictions on cross-border trade, and has taken enforcement action in notable cases. The Commission adopted two decisions prohibiting TSCs in 2024, imposing fines in both cases, and the trend of increased enforcement is continuing; in March 2025, the Commission confirmed that it had conducted unannounced inspections (dawn raids) in the soft drink industry to investigate suspected restrictions on trade between EU member states. In addition to enforcement action, TSCs are increasingly subject to policy initiatives aimed at increasing free trade.
We anticipate that TSCs will remain in focus in the short-to medium-term. Any changes to how TSCs are addressed – including a possible blanket ban, as endorsed by some EU member states – would have a significant impact on operators at all levels of the supply chain from manufacturing to wholesale, distribution and retail, and across all industries (both goods and services).
On February 25, 2025, President Trump signed an executive order directing the Secretary of Commerce to investigate an alleged national security threat to the copper supply chain under Section 232 of the Trade Expansion Act and to report his findings and remediation recommendations.[1]
Why Copper?
Copper is crucial for defense, infrastructure, electronics, and emerging technologies, making it the U.S. Defense Department’s second-most used material. While the United States maintains significant copper reserves, it only produces half of the refined copper it consumes, making it heavily reliant on foreign suppliers. China controls approximately 50% of global smelting and refining capacity, although the United States sources the majority of its foreign copper from Canada, Chile, and Mexico.[2] This reliance, along with potential foreign market manipulation, is believed to pose a national security risk to America’s supply of raw copper, copper concentrates, refined copper, copper alloys, scrap copper, and copper derivative products.[3] Currently, no tariffs or quotas exist on copper imports.
What is Section 232?
Section 232 of the Trade Expansion Act of 1962 (19 U.S.C. § 1862) specifically allows the President of the United States to impose import restrictions if certain imports are found to threaten national security. The U.S. Government relies on the Section 232 investigation process to evaluate the threat posed by imports. An application from an interested party or a request from a government department or agency or the Secretary of Commerce can initiate 232 investigations.
Investigative Process
The 232 investigation will evaluate several key aspects of the U.S. copper supply chain. These include the current and projected demand for copper in critical sectors like defense, energy, and infrastructure, as well as the ability of domestic production, smelting, refining, and recycling to meet this demand. The investigation will also examine the role of foreign supply chains, particularly major exporters, and the risks associated with the concentration of U.S. copper imports from a small number of suppliers. It will assess the impact of foreign government subsidies, overcapacity, and predatory trade practices on U.S. competitiveness, as well as the economic effects of artificially suppressed copper prices through dumping and overproduction. The investigation will explore the potential for foreign nations to restrict exports or weaponize their control over refined copper, and whether increasing domestic copper mining and refining capacity could reduce reliance on imports. Finally, it will review the impact of current trade policies and whether measures such as tariffs or quotas are necessary to safeguard national security.
Under U.S. law, the Commerce Department must consult with the Secretaries of Defense, Interior, and Energy, as well as other relevant agencies, during the investigation. Once initiated, the Secretary of Commerce has 270 days to present findings on whether copper import dependence threatens national security, along with recommendations to mitigate these risks, including tariffs, export controls, or incentives for domestic production. The Secretary will also provide policy suggestions for strengthening the copper supply chain through strategic investments, permitting reforms, and enhanced recycling efforts. While the public may have an opportunity to comment on the investigation, it is not required by statute; the Department of Commerce may gather additional information from surveys of industry stakeholders and other external resources. If the Secretary concludes that imports threaten national security, the President has up to 90 days to decide whether to implement trade restrictions based on these findings.
Potential Outcomes
If President Trump decides to act on the 232 investigation results, adjusting imports of copper to mitigate the perceived national security threat, all measures must be implemented within 15 days. Possible actions include new tariffs and quotas, which would not ban the importation of copper, only limit the import amounts and make them more expensive. The 232 investigation results will help determine the tariff rate.
If President Trump seeks to limit or restrict imports, and either no agreement is reached within 180 days or an agreement fails to address the national security threat, he may take additional actions under Section 232. The President must submit a written statement to Congress explaining his decisions within 30 days and publish notice of all actions in the Federal Register.
If President Trump decides action is unnecessary, he must submit a written statement to Congress within 30 days explaining his reasons. He must also publish this determination and the accompanying explanation in the Federal Register.
Correlating Policies and Next Steps
As part of his America First Trade Policy, President Trump signed proclamations to close loopholes and exemptions, restoring a true 25% tariff on steel and raising the aluminum tariff to 25%. He also raised the general tariff on Chinese imports to 20% in response to China’s alleged role in the fentanyl crisis. Shifting focus to protect a strategic mineral like copper appears consistent with this administration’s trade strategy.
While publishing the executive order signals a meaningful action, it merely initiates the 232 investigation. However, given the administration’s current approach to trade strategy, it seems likely this exercise will lead to additional tariffs—potentially reaching the 25% rate applied to steel and aluminum. New tariffs will almost certainly prompt foreign governments to protest and likely bring challenges before the World Trade Organization. And make no mistake – copper import tariffs will impact the U.S. economy. From defense to electronics to automotive, all major U.S. corporations that depend on copper will feel the pinch.
[3] The definition of copper derivate products will likely be the same used for steel and aluminum derivative products found in Section 232 of the Trade Expansion Act of 1962.
This is a Cross-Post from the Trade Practitioner Blog.
On May 15, 2019, President Trump issued Executive Order 13873 – Securing the Information and Communications Technology and Services Supply Chain (“EO” or “EO 13873”). After taking comments on a proposed implementing rule, the Department of Commerce (“DOC” or “Secretary”), on the very eve of the Biden Administration taking office, issued an Interim Final Rule…… Continue Reading
On December 13, 2024, an Oakland County, Michigan trial court awarded AirBoss Flexible Products Co. nearly $3.5 million dollars on an unjust enrichment counterclaim asserted against MSSC, Inc., a tier one U.S. automotive supplier.[1] The ruling is the latest in a protracted battle between the two companies, which reached its well-known apex in July 2023 when the Michigan Supreme Court reversed a Court of Appeals opinion holding that blanket purchase orders lacking a written quantity term were unenforceable under the UCC Statute of Frauds.[2]
AirBoss, a supplier of rubber-based products, entered into a contract whereby it would provide MSSC, a supplier of parts for vehicle suspension systems, with components for ultimate use by an OEM.[3] The agreement between AirBoss and MSSC was set forth in a blanket purchase order that specified the parts to be supplied and the prices, but not the quantity.[4] The purchase order stated, “If this order is identified as a ‘blanket order’, [MSSC] shall issue a ‘Vendor Release and Shipping Schedule’ to [AirBoss] for specific part revisions, quantities, and delivery dates for Products. . . .” MSSC would therefore place orders for specific quantities of products through periodic releases as is common in the automotive industry.[5]
In mid-2019, AirBoss determined that it was experiencing financial losses on several of the parts it supplied MSSC and requested price increases.[6] MSSC did not respond, so AirBoss sent a notice that it was rejecting any future releases unless the parties reached an agreement on revised pricing.[7] MSSC, in turn, stated it would not agree and that it expected AirBoss to meet its contractual obligations.[8] AirBoss promptly notified MSSC that it was terminating their agreement and would stop supplying parts after the current release was filled.[9]
Shortly thereafter, in February 2020, MSSC sued AirBoss in Michigan for anticipatory breach of contract and moved for an injunction requiring specific performance by AirBoss.[10] The Oakland County Circuit Court granted the injunction and summary disposition in favor of MSSC on the grounds that the term “blanket order” expressed a quantity term sufficient to create an enforceable requirements contract under the Statute of Frauds in Michigan’s Uniform Commercial Code.[11] The Court of Appeals affirmed.[12]
The Michigan Supreme Court, however, reversed the decisions in July 2023.[13] The Court held that the blanket purchase order did not contain a quantity term and therefore could not satisfy the Statute of Frauds so as to create an enforceable requirements contract.[14] MSSC and AirBoss instead had a “release-by-release” business arrangement whereby AirBoss was bound by the terms of the blanket purchase order only to the extent that MSSC issued releases for specific quantities of products and AirBoss accepted those releases.[15] That being so, AirBoss was within its rights to reject future releases when MSSC would not agree to revised pricing. The case was then remanded to the trial court.[16]
Upon return to the Oakland County Circuit Court, only a counterclaim by AirBoss for unjust enrichment remained for adjudication.[17] AirBoss asserted that MSSC was unjustly enriched because the lower courts had erroneously ordered it to supply MSSC with parts at a substantial loss.[18] AirBoss sought as damages the difference in sales at prices it wanted to charge MSSC and those ordered by the lower courts—a total of $3,483,899.85.[19]
MSSC argued that AirBoss could not recover damages under an unjust enrichment theory because the sales were governed by contracts between the parties—i.e., individual releases under the blanket purchase order.[20] The Oakland County Circuit Court dismissed this argument because the releases were not entered voluntarily but rather through coercion of its “predecessor” court and the Michigan Court of Appeals.[21] The court equated the decision of AirBoss to enter the releases to that of Johnny Fontane in The Godfather:
MICHAEL
Well, when Johnny was first starting out, he was signed to this personal service contract with a big band leader. And as his career got better and better, he wanted to get out of it. Now, Johnny is my father’s godson. And my father went to see this band leader, and he offered him $10,000 to let Johnny go. But the band leader said no. So the next day, my father went to see him; only this time with Luca Brasi. And within an hour, he signed a release, for a certified check for $1,000.
KAY
How’d he do that?
MICHAEL
My father made him an offer he couldn’t refuse.
KAY
What was that?
MICHAEL
Lucas Brasi held a gun to his head, and my father assured him that either his brains – or his signature – would be on the contract.
The court then stated that “MSSC is decidedly not a mobster, and Judge Alexander and the Court of Appeals are the furthest things from gunmen.” But the court nevertheless recognized “the cold hard reality that the Supreme Court found that there was no contract and no obligation to sell parts under the releases” and that AirBoss only supplied MSSC at the prices in the blanket purchase order “under pain of contempt of court.”[22]
MSSC further argued that it would be inequitable to apply the Michigan Supreme Court decision retroactively.[23] The court found this claim baseless, stating that, “perhaps there is a parallel universe, but traditionally when a party in Michigan wins a lawsuit, they actually win the lawsuit and are awarded the relief requested.”[24] Thus, AirBoss, in a reversal of fortunes, was awarded full damages.[25]
The AirBoss saga is a cautionary tale about the dangers of a buyer misunderstanding a release-by-release business arrangement with its supplier to be a requirements contract. A supplier in such an arrangement is entitled to stop accepting release orders and demand a price increase. A buyer that stands its ground and seeks court intervention on the mistaken belief it has a requirements contract would be throwing good money after bad. The courts will eventually find in favor of a supplier if a buyer has imposed contract terms at odds with UCC. In fact, AirBoss may encourage a supplier that is a party to an unfavorable long-term agreement to test the waters by demanding a price increase. It would therefore be prudent for buyers to conduct audits of their “requirements contracts” to confirm they include a quantity term sufficient to satisfy the Statute of Frauds, and any other requirements under the applicable governing law.
[1]MSSC, Inc. v. AirBoss Flexible Products Co., No. 20-179620-CB, at *16 (Mich. Cir. Ct., Dec. 13, 2024).
[2]MSSC, Inc. v. AirBoss Flexible Products Co., 511 Mich. 176, 180, 999 N.W.2d 335 (Mich. 2023).
[3]MSSC, Inc. v. AirBoss Flexible Products Co., 338 Mich. App. 187, 979 N.W.2d 718 (Mich. Ct. App. 2021).
[4]MSSC, Inc. v. AirBoss Flexible Products Co., No. 20-179620-CB, 2020 WL 10964218, at *1-3 (Mich. Cir. Ct., July 17, 2020).
Members of the Senate Commerce Committee have demonstrated an early bipartisan interest in continuing to promote U.S. supply chain resilience, highlighting an avenue for bipartisanship in the Trump Administration’s foreign policy agenda.
The Strengthening Support for American Manufacturing Act would require the Secretary of Commerce and the National Academy of Public Administration to produce a report on the effectiveness and management of the Department of Commerce’s various manufacturing support programs. Notably, the report is tasked with identifying relevant offices and bureaus within the Department of Commerce with responsibilities related to critical supply chain resilience, and manufacturing and industrial innovation, and make recommendations on improving their efficiency by identifying gaps and duplicative duties between offices.
Sen. Gary Peters (D-Michigan), who introduced the Strengthening Support for American Manufacturing Act, explains the legislation is intended to streamline various manufacturing programs offered by the federal government. Specifically, in a press release associated with the bill, Sen. Peters highlights a 2017 report released by the Government Accountability Office that identified 58 manufacturing related programs across 11 different federal agencies that serve US manufacturing, several of which are managed by the Department of Commerce.
The Promoting Resilient Supply Chains Act (the “PRSCA”) would establish a Supply Chain Resilience Working Group (the “Working Group”) comprised of federal agencies – including the Departments of Commerce, State, Defense, Agriculture, and Health and Human Services, among others. Moreover, under the PRSCA, the Assistant Secretary of Commerce for Industry and Analysis would be required to designate “critical industries,” “critical supply chains,” and “critical goods,” and the Working Group would be charged with mapping, monitoring, and modeling U.S. capacity to mitigate vulnerabilities in these areas.
Notably, during the Commerce Committee’s January 29, 2025, hearing to consider the nomination of Howard Lutnick to become Secretary of Commerce, Sen. Lisa Blunt Rochester (D-Delaware), the author of the PRSCA, asked Mr. Lutnick whether the Department of Commerce would maintain the agency’s supply chain mapping initiatives under his direction. Mr. Lutnick replied in the affirmative.
In discussing the merits of the PRSCA, Sen. Blackburn stated: “To achieve a strong, resilient, supply chain, we must have a coordinated, national strategy that decreases dependence on our adversaries, like Communist China, and leverages American ingenuity.” This claim is particularly relevant in the PRSCA’s promise to design and implement an “early warning supply chain disruption system” that would employ artificial intelligence and quantum computing to identify and mitigate potential supply chain shocks. As a crisis response measure, the platform would locate alternative sourcing options for supply chains under imminent threat and press private sector to shift their supply chains toward “countries that are allies or key international partners” of the United States. Secretary of State Marco Rubio has emphasized that the Trump Administration’s foreign policy program will prioritize “relocating [U.S.] critical supply chains closer to the Western Hemisphere,” namely in Latin American countries, as a means to enhance “neighbors’ economic growth and safeguard Americans’ own economic security.”
Sen. Blackburn’s willingness to support these Democratic pieces of legislation reflects an increasing bipartisan sense that the impacts of recent geopolitical conflicts, natural disasters, and the COVID-19 pandemic highlighted the fragility of U.S. supply chains. Additionally, the PRSCA has been endorsed by the private sector, including the Information Technology Industry Council, the National Association of Electrical Distributor, the National Association of Wholesaler-Distributors, and the Supply Chain Resiliency Consumer Brands Association.
It remains uncertain whether either the PRSCA or Strengthening Support for American Manufacturing Act can advance this Congress as standalone bills, as the Trump Administration’s tariff and foreign assistance actions deepen partisan trends. Still, the bills’ emphasis on government efficiency, prioritizing American manufacturing, and near-shoring may be able to leverage Trump Administration “America First” and “Department of Government Efficiency” themes to ride momentum into FY 2026 annual appropriations legislation under a national security title. Accordingly, importers interested in the U.S. market would likely benefit from reviewing their supply chains with a long view that seeks to leverage opportunities to reinvest in American manufacturing and looks to near shore material supply chains, particularly in the Western Hemisphere – where the Trump Administration has underscored its interests in boxing out Chinese investment.
The Uyghur Forced Labor Prevention Act[1] (“UFLPA”) was enacted to address alleged forced labor and human rights abuses in the Xinjiang Uyghur Autonomous Region (“XUAR”) of China. The Act relies on a rebuttable presumption that goods were made with forced labor if mined, produced, or manufactured, wholly or in part, in the XUAR or produced by one of 144 organizations currently named to the UFLPA Entity List. As such, these commodities are prohibited from entering the United States pursuant to Section 307 of the Tariff Act of 1930. The UFLPA was signed into law on December 23, 2021 and implemented on June 21, 2022 without regulatory guidance. U.S. Customs and Border Protection (“CBP”) enforces the Act and the multi-agency Forced Labor Enforcement Task Force (“FLETF”) directs its implementation.
II. Enforcement Update
Since June 2022, CBP has detained over 12,500 shipments valued at $3.68 billion, impacting significant quantities and varieties of goods imported from China as well as Malaysia, Vietnam, Thailand, and others. The four most heavily impacted commercial industries are electronics, automotive/aerospace, apparel/textiles, and industrial/manufacturing materials. These sweeping enforcement measures have required companies to examine their global supply chains and operating policies to remediate exposure to UFLPA enforcement.
III. Regulatory Update
On January 15, 2025, the FLETF designated an additional 37 China-based companies to the UFLPA Entity List, increasing the number of organizations subject to the rebuttable presumption to 144. The Department of Homeland Security (“DHS”) leads the planning and strategy of the FLETF, and recently stated in a press release that: “These actions are part of the FLETF’s commitment to eliminating forced labor in U.S. supply chains and holding accountable those responsible for human rights abuses against Uyghurs and other religious and ethnic minority groups in the Xinjiang Uyghur Autonomous Region (XUAR).”[2] The companies newly named to the Entity List are from the following sectors: cotton (26 companies), silicon and/or solar (six companies), mining (five companies).
This latest tranche of UFLPA updates have targeted mining giant Zijin Mining Group and subsidiaries. The import prohibition against goods containing the critical materials these companies produce (including copper, lithium, molybdenum, and tungsten) will impact global supply chains in the electronics, automotive, aerospace, solar, and telecommunications industries. The Zijin Mining Group corporate family has been subject to significant scrutiny over the past four years. It was specifically identified in the January 19, 2024 letter from former Congressman Mike Gallagher to DHS urging increased UFLPA enforcement. Zijin Mining Group is the parent company of more than 10 domestic mining companies; all of its subsidiaries and international affiliates may be considered for future designation to the UFLPA Entity List. NGOs, civil society organizations, and related media have a long history reporting links between the Zijin Mining Group and human rights violations dating back to at least 2009.
The entities added from China’s cotton industry are part of one principal entity, Huafu Fashion Co., Ltd (“Huafu”). In May 2019, the Wall Street Journal reported that several western retail brands used gray yarn made by Huafu in their supply chains, prompting at least one brand to implement a new policy prohibiting the purchase of “yarn from the Xinjiang region.” The Washington, DC-based Center for Strategic and International Studies (CSIS) also published a report detailing Huafu’s apparent cooperation with forced labor programs in Xinjiang. The FLETF’s designation of Huafu and its subsidiaries likely reflects considerable momentum from these reputable reporting sources and confirmation that global textile brands’ dependence on Chinese cotton represents a continuing concern for the industry.
The inclusion of several silicon and solar energy companies to the UFLPA Entity List was predictable as approximately 50% of the global supply of polysilicon, the essential material in solar panel manufacture, is produced in the Xinjiang region. In 2021, Horizon Advisory (a risk consultancy specializing in Chinese-language research) produced a report alleging that many of the world’s largest solar manufacturing companies depend on forced labor. Since the Horizon Advisory report, the FLETF has steadily added most of its identified solar manufacturers to the Entity List. Of the entities named in this round of additions, Donghai JA Solar Technology Co., Ltd. is one of the world’s largest producers of solar energy products.
A final note, Dr. Laura Murphy, formerly the head of the Forced Labor Project at Sheffield Hallam University, is currently a leading advisor to the U.S. Department of Homeland Security and the FLETF on UFLPA implementation. In her former role with Sheffield University, Dr. Murphy contributed to articles identifying many of the recent additions to the UFLPA Entity List, including Zijin Mining Group, as proliferators of forced labor in China.
The Forced Labour Regulation (FLR) was published on December 12, 2024, prohibiting products made with forced labor on the EU market. The ban—which will begin on December 14, 2027—will apply to any global company that sell products in, or export products from, the EU. Although the prohibition will not enter into force for nearly three years, companies operating in the EU should begin surveying for potential risks in their supply chains and prepare internal compliance programs. For more information, including a comparison of the FLR to the U.S. Uyghur Forced Labor Prevention, read the full analysis here.
