Understanding Force Majeure in an Uncertain World

By Victoria Callicott on April 4, 2025 Posted in supply chain

Please contact Max Rockall and Tim Flamank with any questions.

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.

Read the full insight here

Cross-Post from The Trade Practitioner – On March 14, 2025, the US Federal Maritime Commission (FMC) announced the initiation of a nonadjudicatory investigation into transit constraints at international maritime “chokepoints.”

By Squire Patton Boggs on March 31, 2025 Posted in supply chain

This is a cross-post from The Trade Practitioner. Please contact D. Michael Kaye, Katie Pritchard, Ruaridh Guy, Joel Cockerell, Michael J. Wray with any questions.

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

By Squire Patton Boggs on March 20, 2025 Posted in supply chain

Please contact Gerard McElwee and Oliver Geiss with any questions

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).

Copper Crisis? The Economic Impacts of a Copper Import Tariff

By Shawn Harwood, Amjad Wakil and Jeremy Dutra on March 4, 2025 Posted in supply chain

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.

Cross-Post from Trade Practitioner – Final Rule Implementing ICTS Supply Chain Executive Order 13873 In Effect

By Squire Patton Boggs on February 18, 2025 Posted in supply chain, US national security/supply chains

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

AirBoss II: Michigan Court Awards Automotive Supplier $3.5 Million Based On “Unjust Enrichment”

By Janine Little and Sarah Rathke on February 12, 2025 Posted in supply chain

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]

Bipartisan Push to Strengthen American Supply Chains

By C. Bradford Ellison, Shawn Harwood, D. Michael Kaye and Anya Bharat Ram on February 6, 2025 Posted in supply chain

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.

Sen. Marsha Blackburn (R-Tennessee) has partnered with Democratic colleagues as an original cosponsor on the reintroduction of two pieces of legislation aimed at coordinating the U.S. government’s focus on supply chain resilience: the Strengthening Support for American Manufacturing Act (S. 99); and, the Promoting Resilient Supply Chains Act(S. 257).

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.

Forced Labor Update & Analysis – Fresh Names for the UFLPA Entity List

By Shawn Harwood, Anya Bharat Ram, C. Bradford Ellison, Ludmilla Kasulke and D. Michael Kaye on January 31, 2025 Posted in supply chain

I. Background

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.

Cross-Post From Capital Thinking Blog – EU Publishes Regulation Banning Products Made With Forced Labour

By Squire Patton Boggs on January 7, 2025 Posted in supply chain

This is a Cross-Post from the Capital Thinking Blog. Please contact Thomas Delille, Marion Seranne, Ludmilla Kasulke, D. Michael Kaye, Christina Economides or Guillermo Giralda Fustes with any questions.

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.

Metal Surcharges Back in Antitrust Crosshairs

By Oliver Geiss on December 23, 2024 Posted in supply chain

On 12 December 2024, the Italian antitrust authority has launched an investigation into suspected cartel activity among low-voltage copper cable manufactures. According to the authority, the manufacturers allegedly agreed to standardize surcharges for metal procurement, evading competitive pricing practices as far back as 2005. Furthermore, since 2008, the manufacturers allegedly implemented a unified system, referred to as the “Sales System”, to adjust prices in response to copper cost fluctuations.

The recent raids in Italy add to a growing list of similar investigations involving standardized surcharges. Surcharges are used across many industries. They are often linked to fluctuating prices on global exchanges, allowing manufacturers to automatically adjust prices in response to cost changes. While surcharges are permitted tools for managing input costs, antitrust laws prohibit companies from collectively fixing or aligning surcharge formulas.

For example, in the Airfreight cartel case, that started in 2006, airlines were accused of coordinating fuel and security surcharges to offset external cost increases. In 2017, the German antitrust authority fined industrial battery manufacturers for coordinating lead surcharges, dating back to 2004. More recently, in 2022, Germany’s competition authority raided cable manufacturers over allegations of coordinated metal surcharge calculations. See our blog. In November 2023, the European Commission sent a statement of objections to manufacturers of automotive starter batteries regarding concerns that between 2004 until 2017 starter batteries manufacturers created, published and agreed to use new indices in their price negotiations with car producers.