On February 21, 2024, the White House issued an executive order implementing various measures to bolster the security of US ports by expanding the US Coast Guard’s authority to regulate maritime cybersecurity, requiring the reporting of cyber incidents and investing in the US port critical infrastructure.
While many have focused in recent months on the US enforcement of the forced labor import ban (19 U.S.C. 1307) and the Uyghur Forced Labor Prevention Act (UFLPA) (Public Law No. 117-78), the EU is working on its own set of regulations prohibiting products made with forced labor from entering the EU market.
As Yemen’s Houthi rebels have increased attacks against vessels sailing through the Red Sea and the Gulf of Aden, global trade stakeholders have responded. It has been announced in the media that oil majors and large global shipping lines are suspending shipping operations in the Red Sea.
In light of the current geopolitical climate, the Federal Maritime Commission (FMC) announced that it will hold an informal public hearing on February 7, 2024, to examine how conditions in the Red Sea and Gulf of Aden regions are impacting commercial shipping and global supply chains. The hearing will allow stakeholders in the supply chain to communicate with the FMC on how operations have been disrupted by attacks on commercial shipping emanating from Yemen, steps taken in response to these events, and the resulting effects.
November 27, 2023 marked the inaugural meeting of the White House Council on Supply Chain Resilience, a cabinet-level council focused on building and advancing the success of America’s critical supply chains. The meeting commenced the Biden-Harris Administration’s initiative to provide American citizens with domestic access to medicine and vaccines that have previously been inconsistently available.
The purpose of this Act is to implement Canada’s international commitment to fighting forced and child labor through reporting obligations on (a) government institutions[1] producing, purchasing, or distributing goods in Canada or elsewhere; and (b) entities[2] producing goods in Canada or elsewhere or importing goods produced outside of Canada.
On June 29, 2023, the European Parliament and Council formally adopted the EUDR. The EUDR goes into effect on December 30, 2024 for large companies (operators and traders)[1] and June 30, 2025 for micro and small exporters.[2]
On November 15, 2021, President Biden signed into law the Infrastructure Investment and Jobs Act (IIJA) (P.L. 117-58), which includes the Build America, Buy America Act (BABA) requiring infrastructure projects receiving IIJA funding and other federal financial assistance to utilize certain domestically produced materials, including iron or steel products, manufactured products, and construction materials. On August 23, 2023, the Office of Management and Budget (OMB) published final guidance to federal awarding agencies on BABA’s requirements in the Federal Register. Squire recently wrote an article about the final guidance, which you can read here.
The Michigan Supreme Court issued an Opinion on July 11, 2023 in MSSC, Inc. v. Airboss Flexible Products Co.,reversing a Court of Appeals opinion holding that blanket purchase orders were enforceable under the UCC Statute of Frauds.
In short, the Michigan Supreme Court upheld the longstanding Statute of Frauds rule that contracts must contain a written quantity term to be binding, including its conclusions that:
The parties’ blanket purchase order, terms and conditions, and other writings lacked a written quantity term.
The term, “blanket,” does not constitute a quantity term within the meaning of the Statute of Frauds, overturning Great Northern Packaging, 154 Mich App 777; 399 NW 2d 408 (1986), “to the extent that it conflicts with the holding.”
Since there was not a quantity term in the MSSC and Airboss documents at issue, the parties’ agreement did not comply with the UCC Statute of Frauds, which requires a quantity term to be included in the written contract to be enforceable, and therefore, it was error for the lower courts to use parol evidence to determine the intent of the parties.
Without a quantity term, and without being a requirements contract under MCL 440.2306(1), the parties entered into a “release-by-release” contract that was binding against the supplier only to the extent of releases issued by the buyer and accepted by the supplier.
Changes may be coming to the “de minimis” exception under Section 321 of the Tariff Act of 1930, as amended, which allows goods valued less than $800 to enter the United States free of duty and taxes, and generally free from formal review, when shipped to individual consumers.
Senators Sherrod Brown (D-OH) and Marco Rubio (R-FL) and Representatives Neal Dunn (R-FL) and Earl Blumenauer (D-OR) introduced the Import Security and Fairness Act (“the Act”) on June 15, 2023, the most recent of several legislative efforts proposing changes to the “de minimis” threshold. The Act would make goods sourced from perceived adversarial nations ineligible for de minimis treatment under Section 321 of the Tariff Act of 1930, as amended. Specifically, the Act targets countries that are both (i) a nonmarket economy (as defined by the Tariff Act) and (ii) listed on the United States Trade Representative’s (USTR) Priority Watch List. Notably, as of June 2023, only China and Russia meet both criteria. Accordingly, in practice, the Act would require a formal importation process for all small Chinese and Russian goods, likely exacting a heavy toll on top of the existing Uyghur Forced Labor Prevention Act (UFLPA) and U.S. sanctions regimes.
As tensions between the US and China continue to build, what does this mean for US companies operating in China? Partners George Grammas and Ed Newberry will discuss the current political landscape, as well as provide insight on where things are headed and what you can do to mitigate risks and protect your relationships going forward. The discussion will help senior leaders and decision makers evaluate their current activities in China and determine whether they should continue business and expand in China – or if they should close up shop.
