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The Month in International Trade – January 2025

Client Alert | 18 min read | 02.05.25

Trump Sets Stage for Future Tariffs and Trade Actions

President Trump’s Executive Orders and Actions - Sanctions

Section 232: History and the Exclusion Process

Section 301: History and Overview

Top Trade Developments

Crowell Webinars

Crowell Speaks

This news bulletin is provided by the International Trade Group of Crowell & Moring. If you have questions or need assistance on trade law matters, please contact Maria Alejandra (Jana) del-Cerro or any member of the International Trade Group. 

Trump Sets Stage for Future Tariffs and Trade Actions

On his first day in office, President Trump rolled out a sprawling set of directives to the heads of numerous government agencies charged with shaping U.S. trade policy.  While stopping short of enacting new tariffs, the Presidential Memorandum defining an “America First Trade Policy” lays the investigative groundwork for potentially sweeping changes to tariffs and the existing trade environment.  

The Memorandum requires various agencies—including, e.g., the Department of Commerce, the Department of the Treasury, and the Office of the U.S. Trade Representative (“USTR”)—to issue upward of twenty reports by April 1, 2025, each one covering a unique trade-related issue pertaining to certain key themes, including unfair and unbalanced trade with all U.S. trading partners, the relationship and impact of trade relations with the People’s Republic of China, and the state of economic security matters relevant for goods entering and exiting the United States.

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For more information, contact: John Brew, Dan Cannistra, Maria Vanikiotis, Weronika Bukowski, Jasmine Masri, Emily Devereaux, Ivy Xun

President Trump’s Executive Orders & Actions - Sanctions

President Trump signed a raft of Executive Orders (E.O.) in the initial days of his new administration, several of which relate to sanctions.

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For more information, contact: Erik Woodhouse, Edward Goetz

Section 232: History and the Exclusion Process

Section 232 of the Trade Expansion Act of 1962 serves as a critical U.S. trade policy tool designed to safeguard national security by regulating imports. The provision grants the President the authority to impose tariffs or other trade restrictions on imports that threaten national security. The underlying rationale is that certain imports could undermine domestic industries vital for national defense and infrastructure. This post provides background on the key aspects of Section 232, including its history and the exclusion process.

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For more information, contact: Dan Cannistra, Jasmine Masri

Section 301: History and Overview

Section 301 of the Trade Act of 1974 delegates to the Office of the United States Trade Representative (USTR) authority to investigate and respond to unfair foreign trade practices that could harm domestic interests. Under Section 301, USTR can act against foreign countries that violate U.S. trade agreements or engage in acts that are “unjustifiable” or “unreasonable” and that burden U.S. commerce. Following a Section 301 investigation, USTR may impose new tariffs, withdraw or suspend trade agreement concessions, and negotiate binding agreements.

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For more information, contact: Dan Cannistra, Jasmine Masri, Emily Devereaux, Ivy Xun

Top Trade Developments

The Anti-Coercion Instrument: What Is It and How Europe Might Use It Over the Next Four Years

Amidst all of the discussion about potential impacts in Europe of changes to US policy, some senior politicians have raised whether the EU could use the ACI to protect its interests. This article explores what the ACI is, how it works, what remedies it provides, and how business can influence those discussions.

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For more information, contact: Vassilis Akritidis, Jean-Baptiste Blancardi

U.S. Export Controls and Sanctions Regulatory Agencies Increase Civil Monetary Penalties for Violations

As of January 15, 2025, Commerce, Energy, State, and Treasury have each published their annual increase in civil monetary penalties for violations of U.S. export controls and sanctions regulations to account for inflation.  Below is a summary of the increases for calendar year 2025.

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For more information, contact: Jana del-Cerro, Dilan Wickrema, Edward Goetz

Moolenaar Heads Reintroduction of Bill to Strip China of PNTR Status

On January 23, 2025, Representative John Moolenaar (R-MI) of the House Select Committee on the Chinese Communist Party, along with House Ways & Means Committee member Tom Suozzi (D-NY), reintroduced a bill in the House of Representatives to revoke Permanent Normal Trade Relations (“PNTR”) with the People’s Republic of China.  When reintroducing the bill, Molenaar cited to Trump’s “America First Trade Policy” memo issued on Monday, which instructed the Department of Commerce and the USTR to assess legislative proposals regarding Permanent Normal Trade Relations with China.

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For more information, contact: John Brew, Weronika Bukowski, Andrew Schlegel

Goods Subject to Tariffs May Lose 321 De Minimis Treatment in Proposed Rulemaking

On January 21, 2025, U.S. Customs and Border Protection (CBP) published a notice of proposed rulemaking that would make goods subject to tariffs under Sections 232, 201, and 301 ineligible for the de minimis duty exemption under the Section 321 Program, which allows imported shipments not exceeding $800 to enter the United States duty-free.  To help CBP identify and ensure that such goods would not claim 321 de minimis exemption, the proposed rule would require goods entered under this program to enter with a 10-digit HTSUS classification.

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For more information, contact: John Brew, Maria Vanikiotis, Ivy Xun

Parting Shots by Biden Administration in the Form of Sweeping New Russia Sanctions

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) and the U.S. Department of State issued new Russia sanctions on January 10th and 15th, 2025.

  • On the 10th, OFAC and the State Department aggressively targeted the Russian energy sector by designating major Russian oil companies liquefied natural gas (LNG) facilities, and senior officials of State Atomic Energy Corporation, Rosatom, as well as insurers, traders, and dozens of vessels involved in shipping Russian oil.
  • On the 15th, OFAC designated Keremet Bank, a Kyrgyz Republic-based financial institution, along with other entities involved in a sanctions evasion scheme to facilitate cross border payments for sensitive goods. Keremet Bank’s designation is the first use of authorities established by Executive Order (E.O.) 14114 (amending E.O. 14024) targeting non-US financial institutions for facilitating transactions involving Russia’s military-industrial base. OFAC also re-designated almost 100 already sanctioned entities pursuant to E.O. 13662. The State Department designated more than 150 individuals and entities involved in providing items critical to Russia’s military industrial base, including a number of PRC-based entities.

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For more information, contact: Dj Wolff, Carlton Greene, Erik Woodhouse, Jeremy Iloulian, Edward Goetz, Dmitry Bergoltsev

DHS Adds 37 China-Based Firms to UFLPA Entity List

On January 14, 2025, the Department of Homeland Security (DHS) announced the addition of 37 China-based entities to the Uyghur Forced Labor Prevention Act (UFLPA) Entity List. DHS cited these entities’ alleged connections to sourcing material and forced labor in the Xinjiang Uyghur Autonomous Region (XUAR) as reasons for their addition.

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For more information, contact: Pier Natta, Ivy Xun

CBP Proposes Rule Imposing Greater Regulation of De Minimis Imports

U.S. Customs and Border Protection (CBP) issued a notice of proposed rulemaking concerning the de minimis exemption under 19 U.S.C. § 1321 (Section 321).  Currently, the de minimis exemption allows goods with an aggregate value under $800 to enter the U.S. duty-free and via an expedited process.  The proposed amendment is intended to stem the flow of unsafe and illegal goods by mandating that importers provide additional shipment data through an electronic filing process. Further, the proposed amendment would impose greater requirements for compliance with trade enforcement laws, such as Sections 201, 232 and 301, which address threats to national security and unfair trade practices.

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For more information, contact: Simeon Yerokun, Sibilla Grenon

China Unveils New Framework To Stimulate Cross-Border Data Flows: Risk or Opportunity for Multinational Companies

As Foreign Investment in China Shrinks, China Unveils New Framework to Stimulate Cross-Border Data Flows: Risk or Opportunity for Multinational Companies?

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For more information, contact: Nigel Cory, Zhiwei Chen

UK’s OTSI Publishes New Russia Evasion and Diversion Guidance

To kick-start 2025, the UK’s recently established Office of Trade Sanctions Implementation (“OTSI”) has published two related guidance notes for UK exporters on Russian trade sanctions evasion and diversion.

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For more information, contact: Dj Wolff, Jana del-Cerro, Nicola Phillips, Sophie Davis

Biden Administration Updates Policy Guidance for the Implementation of the Missile Technology Control Regime

On January 3, 2025, President Biden issued a National Security Memorandum (NSM) to update policy guidance for the Government of the United States’ implementation of the Missile Technology Control Regime (MTCR).  The NSM directs the relevant executive branch agencies to provide increased flexibility for case-by-case review and facilitate support for certain MTCR Category I military missiles, unmanned aerial systems, and space launch vehicle (SLV) systems to certain partners with strong export control systems.

However, the NSM explicitly excluded transfers of complete production facilities that encompass all capabilities necessary to produce a Category I system independently.

As a result, transfers of MTCR Category I SLV related commodities, software, and technology will be considered on a case-by-case basis for select and vetted partner space programs and participation in international space programs, whether such programs are governmental or commercial in nature.

For more information, contact: Jana del-Cerro, Dilan Wickrema

Proactive Strategies for Managing Tariff Impacts on Megaprojects – Part 1

Prepare for potential cost increases and delays in megaprojects arising from proposed tariffs in a second Trump administration by leveraging proactive risk management strategies and contract adjustments.

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For more information, contact: T. Michael Guiffre, Dan Cannistra, Lily Geyer

Proactive Strategies for Managing Tariff Impacts on Megaprojects – Part 2

This alert examines the potential for disputes arising from President-elect Trump’s proposed tariffs and offers strategies for mitigating cost increases, delays, and contractual conflicts in megaprojects. 

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For more information, contact: T. Michael Guiffre, Dan Cannistra, Lily Geyer

New Year, Updated List: The U.S. Department of Defense Updates Its List of Chinese Military Companies with Ancillary Supply Chain and USG Contracting Impacts

On January 2, 2025, the U.S. Department of Defense (DoD) updated the 1260H List of entities identified as “Chinese military companies” (CMC) operating in the United States, as required by section 1260H of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2021 (Section 1260H), adding new entities and removing others.  The updated 1260H List now includes 76 entities.  

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For more information, contact: Addie Cliffe, Jana del-Cerro, Jeremy Iloulian, Alexandra Barbee-Garrett

OFAC Issues New Syria General License and Updates FAQs

On January 6, 2024, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Syria General License 24, which authorizes transactions with governing institutions in Syria and certain activities related to energy and personal remittances. OFAC explained it issued General License 24 in light of the collapse of Bashar al-Assad’s government and to support the Syrian people with maintaining essential services and continuity of governance functions in Syria.    

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For more information, contact: Anand Sithian, Erik Woodhouse, Jeremy Iloulian, Dmitry Bergoltsev

Temporary Exclusion Requests for Relief from Section 301 Tariffs for Certain Machinery and Equipment

The Office of the United States Trade Representative (“USTR”) opened its exclusion request process on October 15, 2024, allowing for importers to request temporary exclusion from Section 301 tariffs on certain Chinese machinery and equipment. The purpose of this exclusion process is to encourage US manufacturing by permitting machinery to be imported duty-free.  This process includes over 300 tariff subheadings in chapters 84 and 85 of the Harmonized Tariff Schedule of the United States (“HTSUS”). The portal to request temporary exclusion is set to close on March 31, 2025.    

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For more information, contact: Dan Cannistra, Emily Devereaux

DDTC Increase in Registration Fees Becomes Effective

On January 9, 2025, DDTC’s new registration fee rates become effective.  This is the first time in fifteen years DDTC has increased the registration fees charged to those who are required to register with DDTC pursuant to the Arms Export Control Act.    

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For more information, contact: Jana del-Cerro, Dilan Wickrema

Crowell Webinars

Webinar: Trump Administration and Trade: Sanctions, Export Controls, Investment Restrictions, and Global Mobility

Register Here

February 11, 2025, 12:00 p.m. – 12:45 p.m. ET

Join Crowell's International Trade attorneys as they explore the landscape facing the new Trump Administration across sanctions, export controls, inbound and outbound investment regimes, and global mobility. Crowell’s team will consider the status quo that the new Administration inherits and will discuss early actions and potential policy trajectories in all of these areas. The session will deliver critical insights to help make sense of a complex and rapidly evolving area that will shape risks and opportunities for companies across industries.

Speakers: Erik Woodhouse, Caroline Brown, Jana del-Cerro, Nicole Simonian

Crowell Speaks

19th Annual Flagship Economic Sanctions Enforcement and Compliance
The National Press Club, Washington, DC (May 1, 2025)
Speaker: Erik Woodhouse 

“Trump 2.0: Overview of National Security Trade Controls”
RFG Webinar (March 19, 2025)
Speaker: Erik Woodhouse 

“Tariffs & Trade in the Trump Administration: Adding Value to Your Supply Chain”
Crowell & Moring 11th Annual In-House Recovery Conference
Dana Point, CA (March 4, 2025)
Speakers: Erik Woodhouse and Weronika Bukowski

“National Security Law and Business”
Duke’s Center of Law, Ethics, and National Security (LENS) 30th Annual National Security Law Conference
Duke Law School, Durham, NC (February 28, 2025)
Panelist: Caroline Brown

Fordham Law School Sanctions Symposium
New York City, NY (February 21, 2025)
Speaker: Erik Woodhouse 

5 Questions About Trump’s Tariff Plans
January 30, 2025 – Supply Chain Drive
Related Professionals: John Brew and Alex Schaefer

Fintechs May Gain At Banks’ Expense in Trump Era
January 28, 2025 – Payments Drive
Related Professionals: Anand Sithian

How Trump’s Tariff Threats Could Impact Foreign Policy
January 28, 2025 – FOX Business
Related Professionals: Monica Gorman

Looming Tariffs Prompt Companies To Protect Supply Chains
January 22, 2025 – Bloomberg Law
Related Professionals: Dan Cannistra

Trump Eyes 10% China Tariff Hike By Feb 1
January 22, 2025 – Supply Chain Drive
Related Professionals: Evan Chuck

Obscure Pentagon Watchlist Offers Blueprint For China Sanctions
January 19, 2025 – Bloomberg News
Related Professionals: Michael Atkinson

Trump Is Promising New Tariffs. How Are Companies Preparing?
January 2, 2025 – Supply Chain Drive
Related Professionals: Evan Chuck

Contacts

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Client Alert | 18 min read | 02.05.25

The Month in International Trade – January 2025

This news bulletin is provided by the International Trade Group of Crowell & Moring. If you have questions or need assistance on trade law matters, please contact Maria Alejandra (Jana) del-Cerro or any member of the International Trade Group. ...

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