The UCC, Passover and Another Public Company Plans Delaware Exit
In recognition of the beginning of Passover at sunset tomorrow, today’s post reprises this post from 2015:
The Jewish holiday of Passover begins at sundown this evening [In 2025, Passover begins on April 12]. In preparation for Passover, observant Jews must dispose of absolutely all chametz,which is basically any food that is made with grain and water that has been allowed to leaven (rise). One way to dispose of chametz, which is also spelt chometz, is to sell it to a non-Jew and then buy it back after the holiday. Under this option, the parties enter into an actual written contract.
Thus, I began wondering about the secular legal implications of these contracts. I could find only a handful of U.S. cases that even mention chametz, and all of those cases involved prisoner complaints about being fed chametz. Nonetheless, it is possible that disputes could arise. For example, who bears the risk of loss if the chametz is destroyed in a fire or other calamity? What if one party fails to perform?
It seems to me that the sales of chametz are governed by, among other things, Division 2 of the California Commercial Code. Under Section 2102 provides that Division 2 applies to transactions in goods. Section 2105 defines “goods”, with certain exceptions, as all things (including specially manufactured goods) which are movable at the time of identification of the contract for sale. Most items of chametz (bread, beer, cookies, etc.) clearly fit within this definition. See, e.g., Webster v. Blue Ship Tea Room, Inc., 347 Mass. 421,198 N.E.2d 309 (1964) (applying the UCC to fish chowder).
You can watch Israel’s Prime Minister Benjamin Netanyahu sell all of the State of Israel’s chametz here. It is unlikely, however, that the contract included a California choice of law provision.
China Based Company Proposes Reincorporation In Nevada
DExit continued this week with the filing of a preliminary information statement by Baiyu Holdings, Inc., a company based in Shenzhen, Guangdong, China. Baiyu believes that moving to Nevada will reduce the risk of unmeritorious litigation:
The increasing frequency of claims and litigation in Delaware brought by financially-interested law firms against corporations and their directors and officers creates unnecessary distraction and costs for businesses, especially businesses in competitive and innovative industries. The absence of statutory bright-line standards in Delaware for transactions that may involve a controlling stockholder has encouraged law firms to test new theories of liability and broaden the definition of who is in control, what transactions should be deemed conflicted and how strict the standards should be for cleansing such transactions.
Trade Update: Navigating Trump Administration Tariffs – Reciprocal Tariffs and Further Developments
Since early 2025, the Trump administration has imposed a series of broad sector- and country-specific tariffs. These measures were significantly expanded on April 2, 2025, with the announcement of a global tariff regime grounded in the principle of reciprocity. However, some of these new reciprocal tariffs were soon paused on April 9, 2025. Further, reciprocal tariffs on China were raised to an unprecedented 125%.
As global trade tensions continue to rise and many countries have already begun to introduce retaliatory tariffs on the U.S., it will be critical to monitor how increased duty rates will impact your company’s cross-border transaction activity, as well as to develop practical supply chain strategies to mitigate the impact of these fluid and dynamic trade disputes. Additional background on each of these tariff regimes is included below.
I. Targeted IEEPA Tariffs
Before proceeding to describe the reciprocal tariff regime which was announced on April 2, 2025 pursuant to the International Emergency Economic Powers Act (“IEEPA”), it is important to note that on April 9, 2025, the Trump administration announced that application of reciprocal tariffs announced on April 2, 2025 to apply respectively to 57 named countries, have been suspended from application for 90 days, except in the case of retaliating countries, including China. The global baseline tariff of 10% announced on April 2, 2025, however, has not been suspended and will be applicable. IEEPA tariffs announced in 2025 prior to April 2 are also not affected by this suspension, nor are Section 232 based sectoral tariffs.
On April 2, 2025 pursuant to the IEEPA, President Trump declared a national emergency arising from the foreign trade and economic practices of other countries and their impact upon the U.S. He proceeded to announce a new global tariff program, with heightened U.S. tariffs calculated by reference to the trade deficit maintained between the U.S. and individual foreign countries. This program introduces a global baseline tariff of 10% ad valorem on all imported goods, effective April 5, 2025, with higher, country-specific rates for 57 individual countries coming into effect on April 9, 2025 (see these specific rates in Table 1 below).
On the same day, the administration announced the elimination of the de minimis exemption for Chinese imports, which previously allowed duty-free entry for low-value shipments under $800. This change, effective May 2, 2025, aims to close loopholes exploited by e-commerce platforms to bypass tariffs.
Importantly, this new global tariff program does not replace or supersede the tariff increases announced previously by the Trump administration since the beginning of 2025, and adopted pursuant both to the IEEPA and to Section 232 of the Trade Expansion Act of 1962 (Section 232). The reciprocal tariff program announced on April 2, 2025 delineates tariff increases that will be added to the increases previously announced pursuant to the IEEPA. However, for imports of goods subject to Section 232 sectoral tariff increases, the reciprocal tariffs announced on April 2, 2025 will not be additively applied to increase the overall tariff rate for the imports.
Previously announced IEEPA based increases include a 25% tariff on imports of goods from Mexico and Canada, with exceptions including imports of goods that qualify for duty-free importation pursuant to the United States-Mexico-Canada Free Trade Agreement (USMCA). They also include a 20% tariff on imports of nearly all goods from China.
Additional IEEPA based increases include the so-called “secondary tariff” regime, announced on March 24, 2025, which imposed 25% tariffs on all goods from any country that has been determined to import Venezuelan oil, whether directly from Venezuela or indirectly through third parties, effective April 2, 2025.
II. Section 232 National Security Tariffs
Again, these tariffs adopted under the IEEPA apply separately to tariff increases adopted pursuant to Section 232. These include the following:
1. Steel and Aluminum
In February 2025, the Trump Administration announced updated 25% tariffs on steel and aluminum products pursuant to Section 232, targeting all countries. The updated Section 232 tariffs went into effect as of March 12, 2025 – and CBP has since published guidance on impacted HTS classifications for steel, aluminum, and related derivative products. On April 2, 2025 a tariff of 25% was added under this authority for imports of beer and empty aluminum cans.
2. Automobiles and Related Parts
On March 26, 2025, President Trump issued a new Section 232 proclamation imposing a 25% tariff effective April 3, 2025 on imported passenger vehicles (sedans, SUVs, crossovers, minivans, cargo vans) and light trucks, as well as key automobile parts (engines, transmissions, powertrain parts, and electrical components). On April 2, 2025 this proclamation was updated to include nearly 150 additional auto parts categories that will be subject to a 25% tariff beginning on May 3, 2025.
3. Pending Section 232 Investigations
On February 25, 2025 and March 1, 2025, the White House announced two new Section 232 investigations into (i) copper, and (ii) timber and lumber imports – which may result in additional tariff actions.
III. Noteworthy Impacts
China
On April 9, 2025, President Trump announced that, due to China’s application of retaliatory tariffs in response to the reciprocal tariffs he announced on April 2, 2025, the reciprocal tariff on almost all imports from China to the U.S. would be set at 125%. The previously announced IEEPA tariff of 20%, plus any base HTS tariff and/or Section 301 tariff previously announced, would be added to this minimum rate. However, imports of goods subject to Section 232 sectoral tariffs are exempt from the application of IEEPA tariffs. This means that imports of steel, aluminum, and automobiles from China subject to Section 232 tariffs, will only be subject to a 25% tariff in addition to any base HTS tariff.
Southeast Asia
A number of southeast Asian countries were also hit particularly hard by the specific reciprocal tariff regime. This includes Vietnam (46%), Cambodia (49%), and Thailand (37%). Since the increased tariffs implemented during President Trump’s first administration on China, many Chinese companies had set up manufacturing in these countries to avoid these tariffs. Increased tariffs on southeast Asian countries are likely a response to that circumvention. However, again, these country-specific reciprocal tariffs were suspended for 90 days on April 9, 2025. Thus, these countries will at least temporarily be subject to the 10% global baseline tariff. Imports from the countries subject to Section 232 sectoral tariffs are exempt from this IEEPA based global baseline tariff.
E.U.
Imports from the E.U. were not hit with tariffs as high as those on China and some southeast Asian countries. The E.U. was hit with a relatively smaller country-specific reciprocal tariff rate of 20% on April 2, 2025. This additional reciprocal tariff will be applied in addition to any base HTS tariff. However, any imports subject to Section 232 sectoral tariffs are exempt from this reciprocal tariff increase. Even though the E.U. has announced its intention to retaliate against applied U.S. tariffs, the temporary suspension for non-retaliating countries announced on April 9, 2025 has been confirmed to include the E.U. Thus, during this suspension the E.U. will be subject to the 10% global baseline tariff instead of the 20% country specific reciprocal tariff.
Canada/Mexico
Imports from Canada and Mexico were exempted from any new specific reciprocal IEEPA tariffs and are not subject to the global tariff of 10% announced on April 2, 2025. They are, however, still subject to the previously announced 25% IEEPA tariffs on both countries, with the important exception that imports qualifying for duty-free treatment under the USMCA will continue to enter the U.S. duty-free. Imports from both countries are also subject to any base HTS tariff and/or Section 301 tariff previously announced. Again, however, imports subject to Section 232 sectoral tariffs are exempted from the 25% IEEPA tariffs.
The Section 232 auto and auto parts tariffs are of particular significance to both countries, due to the close integration of the auto manufacturing supply chain among the USMCA members. Importers of Mexican and Canadian automobiles covered under the USMCA will be given the opportunity to certify their U.S. content, which will not be subject to tariffs. However, the Section 232 based 25% tariff applies to the non-U.S. content of the vehicle. Further, after May 3, 2025, auto parts covered by the USMCA will also be subject to a 25% tariff on the non-US content of these parts.
FTAs
Pursuant to the reciprocal tariff order, imports from countries with which the U.S. has free trade agreements (FTAs) are subject to the newly imposed reciprocal tariffs. This means that products previously benefiting from reduced or zero tariffs under FTAs will now incur the additional reciprocal tariffs as outlined in the order. Although again, this impact is subject to the suspension of country-specific reciprocal tariffs for non-retaliating countries announced on April 9.
IV. Supply Chain Strategies and Key Takeaways
Tariffs have been and will continue to be a focal point of the Trump Administration’s global trade policy, whether in pursuit of economic security, national security, or as a broader negotiation tactic. The tariff landscape is evolving rapidly and subject to constant evolution and change – and accordingly, companies and importers should take the following steps as soon as possible:
Evaluate your supply chain and diversify suppliers to mitigate tariff costs;
Reevaluate product designs and manufacturing operations to establish favorable country(ies) of origin;
Negotiate tariff cost-sharing provisions in supply and distribution contracts to mitigate effect of increased tariffs;
Explore options to utilize “first sale” pricing for the transaction value of imported goods, potentially leading to lower import duties;
For related party transactions, reassess transfer pricing strategies and structuring of relationships for opportunities to mitigate the effect of tariffs;
For outbound products, identify potential new costs to customers and distributors associated with retaliatory tariffs implemented by third-countries;
Closely monitor evolving negotiations and regulatory changes for new exclusions, exemptions, or carve-outs that may impact your cross-border transaction activity;
Utilize free trade agreements or free trade zones where practicable; and
Consistently audit and document HTS classifications and country of origin determinations for imported goods to ensure customs compliance, timely duty payments, and efficient responses to requests for information issued by CBP.
Table 1
Countries and Territories
Reciprocal Tariff, Adjusted
Algeria
30%
Angola
32%
Bangladesh
37%
Bosnia and Herzegovina
36%
Botswana
38%
Brunei
24%
Cambodia
49%
Cameroon
12%
Chad
13%
China
34%
Côte d`Ivoire
21%
Democratic Republic of the Congo
11%
Equatorial Guinea
13%
European Union
20%
Falkland Islands
42%
Fiji
32%
Guyana
38%
India
27%
Indonesia
32%
Iraq
39%
Israel
17%
Japan
24%
Jordan
20%
Kazakhstan
27%
Laos
48%
Lesotho
50%
Libya
31%
Liechtenstein
37%
Madagascar
47%
Malawi
18%
Malaysia
24%
Mauritius
40%
Moldova
31%
Mozambique
16%
Mozambique
45%
Namibia
21%
Nauru
30%
Nicaragua
19%
Nigeria
14%
North Macedonia
33%
Norway
16%
Pakistan
30%
Philippines
18%
Serbia
38%
South Africa
31%
South Korea
26%
Sri Lanka
44%
Switzerland
32%
Syria
41%
Taiwan
32%
Thailand
37%
Tunisia
28%
Vanuatu
23%
Venezuela
15%
Vietnam
46%
Zambia
17%
Zimbabwe
18%
Dan Joyner, Scott A. Jones, Angela Ennis, and John McCullough contributed to this article.
Payroll Tax, Amnesties and Related Developments for Health Practices
Health practices across Australia have been paying increasing attention to their potential exposure to payroll tax. The importance of doing so continues, particularly with new legislation bringing some further certainty.
Payroll tax has become a critical compliance and business decision-making issue for medical, dental and allied health practices. Despite intentions to have a harmonised approach, the various states have different approaches to the legislation and enforcement; further legislated differences exist regarding the applicable wages threshold before payroll tax is applied to a business.
Exceptions or amnesties exist in some states where practices meet certain criteria. Audit and enforcement activity remain as available measures to the authorities to enforce the legislation in each jurisdiction, and that activity continues.
Key Take-Aways
Health practitioners should:
Review specific legislation and rulings applicable to the states(s) in which they operate;
Determine what amnesties or relief are available under their contractual arrangements with practitioners;
Assess the merits of voluntary disclosure and associated potential benefits (where available);
Review the advantages and disadvantages of their current contractual relationship with practitioners from both a payroll tax and nonpayroll tax perspective; and
Seek legal advice to ensure they take steps appropriate to their circumstances.
Snapshot – Payroll Tax Relief for Health Practices in Australia
A range of amnesties and concessions apply from state to state for the health sector, some of which require practices to opt-in and make critical, and potentially far-reaching, disclosures to the revenue authorities.
Practices should consider whether doing so is suitable in their particular circumstances and interests, having regard to all their circumstances (and not just in respect of payroll tax).
Payroll Tax Wage Thresholds
Payroll Tax Relief for Health Practices
New South Wales
Wages threshold: AU$1.2 million
General practitioners:
From 4 September 2023 to 3 September 2024, a 12-month pause on payroll tax audits (or the application of penalty interest) for general practitioner (GP) practices. More recent announcements have confirmed payroll tax on payments to contracted GPs before 4 September 2024, will be exempt.
From 4 September 2024, a rebate is available for practices where at least 70% (80% in metropolitan Sydney) of GP services are bulk billed. The rebate will apply by excluding the amount of payroll tax that would have applied to the relevant amounts paid to GPs.
Queensland
Wages threshold: AU$1.3 million
General practitioners:
Wages paid by a medical practice to a GP are exempt from payroll tax, following recent amendments to the Payroll Tax Act 1971 (Qld). These enshrine the amnesty previously available to GPs since 1 December 2024, under an administrative arrangement.
Dental practitioners:
A limited amnesty is available for payments to contracted dentists from 1 July 2018 to 30 June 2025, PROVIDED, the practice must have (among other things) registered for payroll tax and made voluntary disclosure to the Queensland Revenue Office by 30 June 2025.
Victoria
Wages threshold: AU$900,000
General practitioners:
Up to 30 June 2025, relief may be available for any payments to contracted GPs by practices which have not paid payroll tax for their contracted GPs (or received advice that payroll tax was payable) before 30 June 2024.
From 1 July 2025, under new legislation in Victoria, exemptions will apply for wages paid or payable to GPs, although limited to payments relating to bulk-billed consultations.
South Australia
Wages threshold: AU$1.5 million
Tax is applied to total wages less a deduction of up to AU$600,000.
General practitioners:
From 1 July 2018 to 30 June 2024, an amnesty is available for this period for payments to contracted GPs where practices registered for payroll tax and made voluntary disclosure to RevenueSA.
From 1 July 2024, an exemption is now available for payments relating to bulk-billed consultations.
Medical specialists and dentists:
Up to 30 June 2024, no similar exemption or amnesty is available to medical specialists or dental practices for the period after 30 June 2024. However, retrospective relief is available to specialists or dental practices who registered with RevenueSA prior to 30 June 2024.
Australian Capital Territory
Wages threshold: AU$2 million
General practitioners:
Up to 30 June 2023, unpaid payroll tax has been waived on payments to GPs prior to 30 June 2023.
From 1 July 2023 to 30 June 2024:
An amnesty is available for this period for payments to contracted GPs where the practice:
Registered for payroll tax by 29 February 2024
Bulk billed at least 65% of GP attendances.
Registered for MyMedicare.
Tasmania
Wages threshold: AU$1,250,001
Tasmania has not announced any amnesties or concessions.
Northern Territory
Wages threshold: AU$1.5 million
The Northern Territory has not announced any amnesties or concessions.
Western Australia
Wages threshold: AU$11 million
Western Australia does not levy payroll tax on payments to contractors.
Queensland Legislates Permanent Relief for GPs
On 20 February 2025, the Queensland Parliament passed new legislation enshrining relief from payroll tax for payments to any contracted GPs. This goes beyond the administrative relief or more limited legislated exemptions in other states. It does not offer assistance to practices beyond GPs, though outside the legislation there remains a more limited amnesty for Queensland dentists until 30 June 2025 (subject to some conditions).
It remains to be seen whether other states and territories will follow suit. Some have applied similar amnesties administratively but have not yet legislated to make those changes permanent. Others have legislated more limited exemptions, e.g., GP practices that bulk bill.
Payroll Tax and “Relevant Contractor” Provisions for Health Practices
Historically, though clearly no longer, industry and revenue authorities generally operated on the basis that certain contracting arrangements between practice owners and nonemployee practitioners did not attract payroll tax. This was particularly the case for clinics offering facilities and services to practitioners operating their own independent businesses. In those arrangements, clinics would usually collect patient fees (or Medicare entitlements) on behalf of those practitioners and remit the balance of those funds to the practitioners after deducting service fees charged by the clinic.
However, while the underlying legislation has not changed, the recent decisions in Optical Superstore Pty Ltd v Commissioner of State Revenue and Thomas and Naaz v Chief Commissioner of State Revenue questioned whether (or when) payroll tax should apply under the extended “relevant contractor” provisions existing in most states’ legislation.
Practice owners face the task of assessing whether they have an exposure to payroll tax and what might be done to mitigate it (while being mindful of important anti-avoidance provisions). Key questions for practice owners are whether:
The practitioner is providing a service to the practice;
There is a relevant payment from the practice to the practitioner “in relation to the performance of work”;
The business exceeds the applicable threshold for payroll tax (which can include consideration of other “grouped” businesses); and
Any exemptions or exceptions apply.
Broader Contracting Issues
While payroll tax issues have been a key recent focus for practices in revisiting their commercial and legal arrangements with practitioners, it is important to consider other (nonpayroll tax) issues relevant to those arrangements.
For some practices, the perennial question of whether a practitioner potentially has entitlements as an employee or an independent contractor are still relevant. While High Court decisions in 2022 (briefly) restored the focus on the written contractual terms (with some exceptions), the effect of those were largely undone by federal legislation that commenced in August 2024 to re-instate the previous “multi-factorial” test.
It is critical to have regard to other potential obligations (superannuation, leave entitlements etc.) in assessing the type of contractual arrangement to be entered into, and how it is to be implemented.
More Changes on the Horizon
More change at state and federal levels remains possible from potential new legislation and anticipated court decisions, namely:
The various state governments and revenue authorities can be expected to consider their positions regarding payroll tax for contractors, particularly in light of the recent legislative changes in Queensland.
In New South Wales, a Parliamentary inquiry has commenced to undertake a broader review of the legislated contractor provisions. The inquiry’s terms of reference indicate a focus on on-demand and “gig economy” workers, but the inquiry may have broader implications for how health practices and other businesses contract and establish payment arrangements with practitioners.
In September 2024, Uber Australia Pty Ltd (Uber) successfully challenged its liability for payroll tax in New South Wales in relation to payments made to drivers. The Supreme Court of New South Wales concluded that the payment from Uber to drivers was not taxable for payroll tax purposes, taking a narrower interpretation of the legislation than in some other recent decisions (such as, in a case involving a medical practice, Thomas and Naaz Pty Ltd). However, Revenue NSW appealed that decision. The appeal has yet to be heard, and the result will be keenly followed nationally.
REACH and GHS in Latin America — A Conversation with Melissa Owen [PODCAST]
This week I had the pleasure of speaking with Melissa Owen, attorney/owner of Ambiente Legal, about the significant regulatory developments regarding chemical registration in Latin America, including Latin American Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) initiatives and the Globally Harmonized System of Classification and Labeling of Chemicals (GHS). We discuss Brazil REACH, which requires by law the government to have an implementing regulation issued by May 2025, Colombia REACH, also subject to a fast-approaching May 2025 deadline, and other Latin American REACH and GHS deadlines. We also discuss the August 2025 deadline in Chile for the notification of chemicals included in professional and consumer products, and much more regarding developments in countries south of our border.
Trump Administration Announces 90-Day Pause on Country-Specific Tariffs for All Countries Except China
On April 9, 2025, President Trump walked back his April 2, 2025 announcement of increased global tariffs (see our client alert here). Under the April 9 Executive Order, the country-specific tariffs — except those on the People’s Republic of China (PRC) — are suspended until 12:01am EDT on July 9, 2025. The new order does not modify the 10% minimum tariff on all imported goods that came into effect on April 5.
Canada and Mexico remain exempt from both the country-specific and the minimum 10% tariff, but are subject to 25% tariffs if goods do not qualify as “originating” in Canada and Mexico under the USMCA; energy, energy resources, and potash from Canada remain subject to a lower product specific 10% tariff.
For all countries but China, the elimination of the de minimis exception for shipments valued at less than $800 remains in place and comes into effect on May 2, 2025.
In the same order, President Trump increased tariffs on all goods from the PRC, including Hong Kong and Macau, to 125%, in response to retaliation by the PRC to the first round of tariffs. Because the tariffs on China are additive, the U.S. tariff rate on Chinese imports is now effectively 145%. For goods that qualify as de minimis coming from China, the duties have increased to 120%, or if sent via the international postal service, $100 per item until June 1, when they will increase to $200.
The administration has announced that it is entering into country-by-country bilateral negotiations to potentially reduce tariffs before the pause ends. Changes to the tariff rates are expected, but timing is unclear. The impact may vary depending on the product, the country of origin, and the terms of the governing contract. If you are affected by the ongoing tariff uncertainty, we encourage you to contact our Tariff Strategy team to discuss your specific circumstances.
Our Tariff Strategy team suggests that all companies, whether currently impacted or not, should take advantage of the 90-day pause to review their standard contracts and terms and conditions to ensure that they have language specifically addressing tariffs and duties (in addition to any clauses regarding taxes) and have strong force majeure clauses. Companies should also review what INCOTERMS govern their imports.
The Recently-Announced U.S. Tariffs Followed By a 90-Day Pause: Frequently Asked Questions
These “frequently asked questions” explain tariffs at a basic level, the Administration’s recently-announced new tariffs, its announced a 90-day “pause” on certain of the new tariffs, and how the new tariffs will impact U.S. companies.
We start with the basics below, then address what we currently believe is happening and what the near-term future is likely to hold.
Tariff Basics
What are Tariffs?
Tariffs are taxes on goods imported into a country from another country, the way that cars on a highway might pay a toll. Countries can vary these taxes depending on what country they come from, and what kinds of products they are.
Who Pays the Tariffs?
Tariffs are not paid by the “target” country, i.e., the country from which the products derive, nor by the manufacturer in that country. Rather, they are typically paid by the distributor that transports the goods from the original country into the country that set and imposed the tariff, in this case the U.S. The distributor, of course, normally can be expected to pass the additional cost onto the purchaser.
What Is the Primary Impact of Tariffs?
Tariffs can generate revenue for the country imposing the tariff, but they can also result in decreased demand for imported products due to the increased prices, and corresponding increased demand for products produced domestically, or produced by a third country that is subject to lower tariffs.
Increases in tariff rates can also result in reciprocal countries raising their own tariffs in response, making goods produced in the U.S. more expensive, and less desirable, in the “target” country.
Why Do Governments Impose Tariffs?
Tariffs can play a role in protecting a local industry if businesses in other countries are able to operate at a lower cost, such as if wages are much lower in the other country. They can also play a role in enforcing national policy. For example, the Administration has stated that its current tariff changes with respect to certain countries are designed to encourage those countries to make a greater effort to prevent the importation of illegal drugs.
Has the U.S. Had Tariffs In the Past ?
Yes, Tariffs have been around for a very long time. The United States has had tariffs in place, despite a general policy of free trade since World War II. The tariffs are a hodge-podge of government policy, legislative mandates, and trade agreements with other countries.
Countries around the world have had disputes over relative tariffs, including claims that a country may be violating whatever treaty or other rule governs the trade relationship between the countries. Since 1995, these disputes have been adjudicated by the World Trade Organization, or WTO.
The New U.S. Tariffs
What Tariffs Has the Administration Recently Announced ?
On April 2, 2025, the Administration announced an across-the-board “base” 10% tariff on imported goods from most countries, with even materially higher tariffs imposed many of them, although as noted below the Administration has since announced a 90-day suspension of the “higher” tariffs, i.e., those beyond the 10% base rate. The countries subject to the higher tariffs are listed in Annex I to the Administrations announcement available at the following link.
There are exceptions under the new tariffs for certain products, including energy products like oil, copper, pharmaceuticals, semiconductors, and lumber, all of which may become subject to separate tariffs. The Administration is already making public statements about ending the exemption for pharmaceuticals.
Canada and Mexico were not included in the April 2 announcement because corresponding tariffs have subject to negotiations on separate tracks. China was included in the April 2 announcement, but also appears to be on a separate track, and the Administration very recently substantially further increased tariffs on Chinese goods in what appears to be, at least for the time being, a trade war with that country. On April 9th, the Administration announced a 90-day suspension of additional tariffs beyond the “base” 10% tariff applicable to all countries identified in the announcement on April 2, with the exception of China, with respect to which it actually further increased tariffs.
What did the 90-day Suspension Include ?
According to the Administration, they have decided on a 90-day suspension of additional tariffs beyond the “base” 10% tariff applicable to the numerous countries identified in Annex II to the announcement on April 2nd. As noted above, the announcement on April 2 imposed a “base” tariff of 10% on all affected countries, but most countries were slated to be subject to even higher tariff rates.
Are The Tariff Rates Expected to Change Over the 90-day Period?
The White House expressly worded its most recent announcement as the opening bid in a negotiation, and it recently announced a limited 90-day pause citing how many countries are negotiating without imposing retaliatory tariffs of their own. Accordingly, the tariffs are expected to change for many countries on a case-by-case basis, but the timeframe for such changes is unclear, and the results of negotiations will likely be publicly-announced in a staggered fashion.
How The New U.S. Tariffs Impact Companies
What will be the impact on companies that do business in the U.S.?
Some companies will not be materially impacted because they do not use a material number of imported goods, do not sell goods abroad as a material part of their business, or have practical alternative sources for goods or markets in which to sell their products.
Many companies, however, will be materially impacted, given the broad scope of countries impacted by the new tariffs, and the likelihood that other countries will in due course adopt retaliatory tariff increases. In the medium and long term, the impact will depend on the results of the negotiations that are ongoing. In the short term, the greatest impact may result from uncertainty about what will happen in the future.
What about publicly-reporting companies?
Companies that are publicly-reporting in the U.S. will be under some pressure to provide information at their quarterly earnings conferences about the impact of the tariffs on their business. If companies have earnings guidance for their 2025 fiscal years, they will have to address whether and how the tariffs impact the guidance.
In addition, the MD&A section of a quarterly report on Form 10-Q must address known uncertainties that are reasonably likely to have a material impact on results of operations. The current uncertainty about ultimate tariff rates set by the U.S., and about potential retaliatory tariffs imposed by other countries, will make this a complex exercise for many public companies. One option is to address multiple scenarios based on varying assumptions.
Increase of Certain Reciprocal Tariffs Paused, While China Duties Ratchet Higher
On April 9, President Trump issued an executive order pausing certain new reciprocal tariffs announced last week while simultaneously substantially increasing tariffs on Chinese imports subject to those reciprocal tariffs. This was prompted by outreach from countries to negotiate the planned tariff increases and follows on changes announced April 8, increasing duties owed on Chinese origin imports and altering payments for de minimis shipments of Chinese origin goods.
Last week, on April 2, President Trump announced 10% reciprocal tariffs on the vast majority of imports from the vast majority of countries effective April 5. For certain countries, those 10% tariffs increased to higher country-specific rates at 12:01 am ET on April 9, 2025.
President Trump’s April 9 action notes that since his April 2 executive order, “more than 75 other foreign trading partners … have approached the United States to address the lack of trade reciprocity in our economic relationships and our resulting national and economic security concerns,” and therefore pauses the increase of reciprocal duties above 10% for all countries other than China through July 9, 2025. Shipments with an April 9 entry date may still be subject to the higher country-specific reciprocal tariffs unless qualifying for the “in transit” provision of the April 2 executive order. The higher country-specific reciprocal tariff rates will snap back into effect at 12:01 a.m. ET on July 9, 2025, absent additional executive action.
With regard to shipments from China, President Trump announced on April 8 an increase from the original 34% reciprocal tariff to 84%, effective April 9. The action yesterday, April 9, further increases the 84% reciprocal tariff rate to 125%, effective 12:01 am ET on April 10, 2025. In addition, the April 9 action, further increases the costs for de minimis shipments of Chinese origin products.
The scope and application of the reciprocal tariffs otherwise is unchanged. The following are excluded from any of the above tariffs regardless of country of origin:
Donations intended to relieve human suffering, informational materials, importations ordinarily incident to travel to or from any country (such as personal luggage) and any other articles subject to 50 USC 1702(b);
steel and aluminum articles and autos and auto parts already subject to Section 232 tariffs;
all articles that may become subject to future Section 232 tariffs; and
copper, pharmaceuticals, semiconductors, lumber articles, certain critical minerals and energy and energy products, as set out in Annex II.
For goods of Canada and Mexico, the existing February/March International Emergency Economic Powers Act (IEEPA) orders and exclusions are unaffected by these announcements. United States-Mexico-Canada Agreement (USMCA) eligible goods will continue to enter free of the newly announced reciprocal tariffs, and non-USMCA eligible goods will be subject to the same 25% IEEPA tariff as has been in place since March 4, 2025 (other than Canadian energy and potash, which will continue to be subject to a 10% IEEPA tariff that has been in place since March 4, 2025).
Customs guidance implementing the above was issued late April 9, 2025.
Executive Order To Restore America’s Maritime Dominance
On April 9, 2025, President Trump issued an Executive Order (EO) entitled “Restoring America’s Maritime Dominance.” This EO recognizes the urgent need to revitalize and rebuild the domestic maritime industry and the strategic importance of commercial shipbuilding capacity and the maritime workforce to the national and economic security of the United States.
The EO references decades of neglect for the declining U.S. flag fleet and sets forth a comprehensive agenda of legislative and governmental initiatives to bolster the United States as a maritime nation. The EO recognizes the need for consistent predictable federal funding to support shipbuilding, to make U.S. flag vessels competitive in international commerce, and to expand and strengthen the maritime workforce. The EO notes that the United States constructs less than one percent of commercial ships globally while China produces approximately half of the world’s commercial ships.
The EO directs the National Security Advisor, in consultation with various Cabinet level officials, to prepare and submit to the President within 210 days a Maritime Action Plan (MAP). The overarching goal of the MAP is to enhance the maritime infrastructure of the United States, to promote the construction of commercial vessels in the United States, and to have trained workforces of mariners and shipyard workers to support the construction and operation of a diversified fleet of commercial and military vessels that will be available to the Government during a war or national emergency.
The MAP will incorporate specific objectives within the timelines set out in the EO, including legislative proposals and recommendations as to any Congressional appropriations necessary to carry out the policy objectives of the EO. The EO is 15 pages in length and is divided into discrete topics that are summarized below on a section-by-section basis.
1. Policy — The EO broadly states that “[it] is the policy of the United States to revitalize and rebuild domestic maritime industries and workforce to promote national security and economic prosperity.”
2. Maritime Action Plan (MAP) — The National Security Advisor, in coordination with various Cabinet level officials, shall submit a MAP to the President within 210 days of the issuance of the EO that shall incorporate the following 18 action items:
a. Maritime Industrial Base — Within 180 days, the Secretary of Defense, in coordination with the Secretary of Commerce, the Secretary of Transportation, and the Secretary of Homeland Security shall provide for inclusion in the MAP an assessment of options and authorities, such as Title III of the Defense Production Act and use of private capital to the maximum extent possible, to invest in and expand the “Maritime Industrial Base,” including expansion of commercial and defense shipbuilding capabilities, ship repair and marine transportation capabilities, port infrastructure and the maritime workforce. The Secretary of Defense is to pursue using the Office of Strategic Capital loan program to improve the shipbuilding industrial base.
b. China’s Unfair Trading Practices — The EO references the United States Trade Representative’s (USTR) recent public hearing and proposed actions regarding Section 301 of the Trade Act of 1974. USTR is directed to coordinate with other agencies to collect additional information in support of administering proposed actions and to coordinate with the Attorney General and Secretary of Homeland Security to take steps to impose any restriction, fee, penalty, or duty that might be imposed. This includes possible tonnage-based fees on Chinese built or flagged vessels that dock in U.S. ports and tariffs on ship-to-shore cranes and other port cargo-handling equipment of Chinese origin.
c. Harbor Maintenance Fee (HMF) — The EO directs U.S. Customs and Border Protection (CBP) to assess applicable customs duties, taxes and fees, including enforcement of the collection of the federal Harbor Maintenance Fee (HMF), on all cargo of foreign origin, including cargo that is offloaded by carriers in Mexico or Canada and transported by land into the United States. CBP is directed to charge a 10% service fee for additional costs to CBP.
d. Engagement and Coordination with Allies — Within 90 days, the Secretary of State, together with the USTR, is directed to engage U.S. treaty allies and other like-minded countries to impose similar measures to those described in items b and c above in order to counter China’s unfair trade practices.
e. Shipbuilding Financial Incentives Program to Reduce Dependence on Adversaries through Allies and Partners — Within 90 days, the Secretary of Commerce, in coordination with the President’s Assistant for Economic Policy, shall deliver a proposal for inclusion in the MAP to establish financial incentives to assist shipbuilders based in allied nations to undertake capital investment in the United States to strengthen its shipbuilding capacity.
f. Legislative Proposal to Establish a Maritime Security Trust Fund — In conjunction with formulation of the President’s Budget, OMB and the Secretary of Transportation are to develop a legislative proposal to establish a “Maritime Security Trust Fund” to serve as a reliable funding source for MAP programs. In crafting this legislative proposal, OMB and the Secretary of Transportation shall consider how new or existing tariffs, taxes, or fees could further the goal of establishing a dedicated funding source for programs supported by the MAP.
g. Shipbuilding Financial Incentives Program — In conjunction with formulation of the President’s Budget, OMB and the Secretary of Transportation are to develop a legislative proposal to establish financial incentives to incentivize private investment in the construction of commercial shipyards and repair facilities, including grants and loan guarantees.
h. Maritime Prosperity Zones — Within 90 days, the Secretary of Commerce, in coordination with the Secretary of Transportation, shall develop a plan that identifies opportunities to incentivize investment in U.S. maritime industries and waterfront communities through newly created maritime prosperity zones. These maritime prosperity zones are to be geographically diverse and are to include river regions and the Great Lakes.
i. Report on Maritime Industry Needs — Within 90 days, the Secretary of Transportation, in coordination with the Secretary of Homeland Security, shall deliver a report to OMB that inventories Federal programs that can be used to grow and sustain the supply and demand for the U.S. maritime industry. The report shall include Maritime Administration programs (including the Maritime Security Program, the Tanker Security Program, the Cable Security Program, the Title XI shipbuilding loan guarantee program, and the Port Infrastructure Development Program (PIDP)), existing cargo preference programs and a review of the waiver process to ensure that such programs support American domestic shipping.
j. Mariner Training and Education — Within 90 days, numerous Cabinet-level officials are directed to prepare a report to address maritime workforce challenges. The report shall determine the number of credentialed mariners that are required to support the more robust maritime industry that is outlined in the EO. Among other things, the report shall review the U.S. Coast Guard’s credentialing program and identify steps necessary to expand maritime education and technical training.
k. Modernization of the United States Merchant Marine Academy (USMMA) — Within 30 days, the Secretary Transportation is to take action to hire the necessary facilities staff and execute deferred maintenance projects at the USMMA. Additionally, a long-term master facility and capital improvement plan is to be developed for the USMMA.
l. Improve Procurement Efficiency — Numerous Cabinet-level officials are directed to develop an improved contract solicitation process for the procurement of U.S. government vessels. Additionally, reforms are recommended to execute, build, and improve the vessel acquisition process.
m. Improve Government Efficiency — The Department of Government Efficiency (DOGE) shall undertake a separate review of the Department of Defense (DOD) and the Department of Homeland Security (DHS) procurement processes and make recommendations to the President to improve the efficiency of these processes.
n. Increase the Fleet of U.S. Flag Vessels Trading Internationally — Within 180 days, the Secretary of Transportation, in coordination with the Secretary of Defense, shall deliver to OMB a legislative proposal to ensure the availability of U.S. flag commercial vessels that participate in international commerce. The proposal shall enhance existing subsidies to cover construction and operational costs and incentivize the commercial shipping industry to operate militarily useful vessels. The goal is to ensure adequate capacity of U.S. flag commercial vessels that can be called upon in times of war or national emergency.
o. Arctic Waterways — Within 90 days, the Secretary of Defense, in consultation with other Department and agency heads, shall develop a strategy to secure arctic waterways.
p. Shipbuilding Review — Within 45 days, the Secretaries of Defense, Commerce, Transportation, and Homeland Security shall conduct a shipbuilding review and submit a report to the President with recommendations for increasing competition within the U.S. shipbuilding industry with the goal of reducing cost overruns and production delays.
q. Deregulatory Initiatives — Within 30 days, the Secretaries of Defense, Transportation and Homeland Security are to review their regulations pertaining to the domestic commercial maritime fleet and maritime port access and identify areas to deregulate.
r. Inactive Reserve Fleet — Within 90 days the Secretary of Defense is to review and issue guidance related to the retention, support, and mobilization of a robust inactive reserve fleet.
Read the full Executive Order here.
Read the White House Fact Sheet here.
Arbeitsrechtliche Elemente im Koalitionsvertrag
Gestern haben sich die Spitzen von CDU/CSU und SPD auf den Abschluss eines Koalitionsvertrages geeinigt. Dieser muss nun noch von den jeweiligen Parteigremien abgesegnet werden, bevor er unterzeichnet werden kann. Wir haben die wichtigsten arbeitsrechtlichen Themen herausgefiltert und kommentiert.
1. Mindestlohn von 15 EUR
Im Jahr 2026 soll „ein Mindestlohn von 15 Euro […] erreichbar“ sein. Hierbei handelt es sich nur um einen Wunsch, denn gleichzeitig betonen die zukünftigen Koalitionäre, dass sie an „einer starken und unabhängigen Mindestlohnkommission“ festhalten wollen. Über die Anpassung des allgemeinen gesetzlichen Mindestlohns entscheidet nach der Konzeption des MiLoG alle zwei Jahre eine unabhängige Kommission der Tarifpartner, die sich aus Vertretern der Arbeitgeberverbände sowie den Gewerkschaften zusammensetzt und außerdem von Wissenschaftlern beraten wird. Dies ist damit eine Absage an rein gesetzliche Erhöhungen des Mindestlohns, die die Ampel in 2022 (auf 12 EUR) letztlich entgegen der gesetzlichen Systematik auf den Weg gebracht hat.
2. Höherer Grad der Tarifbindung
Weiteres Ziel soll eine „höhere Tarifbindung“ sein, so dass „Tariflöhne […] wieder die Regel werden und […] nicht die Ausnahme bleiben“. Hierbei soll ein Bundestariftreuegesetz helfen, das für Auftragsvergaben auf Bundesebene ab EUR 50.000 Euro (und für Startups mit innovativen Leistungen in den ersten vier Jahren nach ihrer Gründung ab 100.000 Euro) eine Tarifbindung voraussetzt.
3. Flexibilität bei der ARbeitszeit
Zur Erhöhung der Flexibilität der Arbeitswelt („auch und gerade im Sinne einer besseren Vereinbarkeit von Familie und Beruf“) soll im Einklang mit der europäischen Arbeitszeitrichtlinie die Möglichkeit einer wöchentlichen anstelle einer täglichen Höchstarbeitszeit geschaffen werden. Dieser Punkt ist sehr interessant und könnte in der Tat ein großes Maß an Flexibilität schaffen. „Zur konkreten Ausgestaltung“ soll es allerdings zunächst einen „Dialog mit den Sozialpartnern“ geben. Ob dies dann bedeutet, dass die Flexibilisierungen nur für tarifgebundene Unternehmen gelten (ganz im Einklang mit dem Ziel unter Ziffer 2) und damit an den stark kritisierten Entwurf für die Anpassung des Arbeitszeitgesetzes aus dem BMAS aus 2023 angeknüpft wird, bleibt abzuwarten.
Darüber hinaus soll „die Pflicht zur elektronischen Erfassung von Arbeitszeiten unbürokratisch“ geregelt werden und „dabei für kleine und mittlere Unternehmen angemessene Übergangsregeln“ vorgesehen werden. Diese Formulierung spricht vor allem nicht dafür, dass kleine und mittlere Unternehmen beim Thema Arbeitszeiterfassung gänzlich mit einer Ausnahmeregelung rechnen können. Interessant ist aber das Bekenntnis der Verhandler, dass die „Vertrauensarbeitszeit […] ohne Zeiterfassung im Einklang mit der EU-Arbeitszeitrichtlinie möglich“ bleiben soll. Vor dem Hintergrund der bekannten höchstrichterlichen nationalen und unionsrechtlichen Argumentation zu diesem Thema ist es höchst interessant, wie diese Absicht rechtlich (und rechtssicher) umgesetzt werden soll. Würde dann der Wortlaut des Koalitionsvertrages tatsächlich gelten, dürften wir bundesweit die Renaissance der Vertrauensarbeitszeitregelungen erleben. Wehrmutstropfen könnte dann hier wieder die Absicht aus Ziffer 2 sein und dies möglichweise nur für tarifgebundene Arbeitgeber gelten.
4. Mehrarbeit, Überstunden & „Vollzeit-Prämien“
„Zuschläge für Mehrarbeit, die über die tariflich vereinbarte beziehungsweise an Tarifverträgen orientierte Vollzeitarbeit hinausgehen“ sollen „steuerfrei gestellt“ werden. Als Vollzeitarbeit soll dabei für tarifliche Regelungen eine Wochenarbeitszeit von mindestens 34 Stunden, für nicht tariflich festgelegte oder vereinbarte Arbeitszeiten von 40 Stunden gelten (wieder eine Referenz an das Ziel der Ausweitung der Tarifbindung). Details sollen abermals durch die Sozialpartner entwickelt werden. Dieser Punkt orientiert sich an der politischen Forderung, dass sich Überstunden mehr lohnen müssen und ist volkswirtschaftlich grundsätzlich zu begrüßen. Wird dies wie beabsichtigt umgesetzt, ist infolge des erheblichen finanziellen Anreizes eine Ausweitung der Überstunden in den Unternehmen zu erwarten. Bekanntermaßen entstehen diese nicht stets auf Verlangen des Unternehmens und so enthält eine solche Regelung durchaus Konfliktpotenzial für die Betriebe und Unternehmen (wer darf Überstunden leisten?).
In diese Richtung geht ein weiterer Aspekt, der vorsieht, dass eine Prämie, die Arbeitgeber zur Ausweitung der Arbeitszeit an Teilzeitbeschäftigte zahlen, steuerlich begünstigt wird. Hier ist zunächst unklar, ob es sich dabei um eine einmalige Zahlung oder dauerhafte Zulalge handeln soll. Eine einmalige Zahlung wird den gewünschten Effekt wahrscheinlich nur eingeschränkt erreichen können.
5. Sonstiges
Darüber hinaus finden sich noch einige andere arbeitsrechtlich relevante Themen im Koalitionsvertrag:
„Für die steigenden Herausforderungen der Digitalisierung und der Künstlichen Intelligenz in der Arbeitswelt“ sollen „die richtigen Rahmenbedingungen“ gesetzt werden, „damit diese sozialpartnerschaftlich gelöst werden“. Hierzu soll
Die Mitbestimmung weiterentwickelt werden (zur Erinnerung: der reine Einsatz von KI ist mitbestimmungsfrei);
Online-Betriebsratssitzungen und Online-Betriebsversammlungen sollen zusätzlich als gleichwertige Alternativen zu Präsenzformaten möglich sein (das ist bei der Betriebsversammlung derzeit nicht möglich).
Die BR-Wahlen sollen ebenfalls online möglich werden.
Für den Einsatz von KI im Unternehmen soll eine „Qualifizierung der Beschäftigten“ (die KI-Verordnung lässt grüßen) und „die faire Regelung des Umgangs mit den Daten im Betrieb“ geregelt werden (bei dieser Querschnittsmaterie ist die Umsetzung besonders kompliziert und trägt damit das Risiko, dass diese auf der Strecke bleibt).
Darüber hinaus kommen die zukünftigen Koalitionäre erneut auf eines ihrer Hauptanliegen (siehe oben Ziffer 2) zurück und bekräftigen am Ende:
Das Zugangsrecht der Gewerkschaften in die Betriebe soll um einen digitalen Zugang, der ihren analogen Rechten entspricht, ergänzt werden; und
Die Mitgliedschaft in Gewerkschaften soll durch steuerliche Anreize für Mitglieder attraktiver werden.
Fazit
Die Absicht zur Flexibilisierung der Arbeitszeit und Erleichterungen bei deren Erfassung sind aus Perspektive der Unternehmen ebenso zu begrüßen, wie steuerliche Anreize für Überstunden und eine Ausweitung der Arbeitszeit für Teilzeitbeschäftigte. Im Übrigen atmet der Abschnitt zum Arbeitsrecht den Geist des Junior-Koalitionspartners SPD, der ja auch wieder das Arbeitsressort übernehmen wird. Spannend dürfte hier die Frage werden, inwieweit die verfassungsrechtlich geschützte „negative Koalitionsfreiheit“ ausreichend beachtet wird. Übermäßig viele Themen haben sich die Koalitionäre in diesem Bereich für die 21. Legislaturperiode aber nicht gesetzt, so dass durchaus mit einer umfassenden Umsetzung gerechnet werden kann.
ETIAS 2026? Start of European Travel Authorization System Delayed Again
Implementation of the European Travel Information and Authorization System (ETIAS) has been delayed again. Initially expected to be operational in 2022, ETIAS is now scheduled to start in the last quarter of 2026. This delay allows more time for the Entry/Exit System (EES) to be fully implemented, which is expected to become operational in October 2025.
ETIAS will be a requirement for non-EU nationals from visa-exempt countries, including the United States, for short-term stays in the Schengen Area.
ETIAS is not a visa. Americans will maintain their visa-free privileges but will need to obtain the new travel authorization. This applies to U.S. visitors traveling to Europe for short stays of up to 90 days per 180-day period for any of the following purposes:
Tourism
Leisure activities
Business
Health and medical treatment
Transit en route to a third-country destination (only required if leaving the airport’s international transit area)
U.S. citizens will need to provide the following to register:
Valid Passport: U.S. passport must be valid for at least three months after planned departure from the Schengen Area
Payment Method: A debit or credit card to pay the application fee, which is slated to be approximately $8
Email Address: To receive approved ETIAS authorization
Additionally, travelers will need to fill out an online application form with:
Personal Information: Full name, date and place of birth, gender, and contact details
Passport Details: Passport number, issue date, and expiry date
Travel Plans: Intended first entry country and travel dates
Security Questions: Information about health, criminal record, and previous travel issues
The application process is designed to be quick and straightforward, with most approvals granted within minutes.
ETIAS will not be mandatory for U.S. citizens right away. There will be a six-month transitional period followed by a six-month grace period. During the transitional period, Americans will be allowed to cross the external border without ETIAS. They must meet all other entry conditions. During the grace period, Americans will be allowed to cross the external border without ETIAS only if it is the first time they are entering since the end of the transitional period.
ETIAS is valid for up to three years and for multiple trips to Europe. ETIAS authorizations validated during the transitional or grace periods can be used for trips once it becomes mandatory.
Have Your Say on CSRD: EFRAG Launches Public Call for Input on Revisions to ESRS
The European Financial Reporting Advisory Group (EFRAG) has launched a public call for input (Call for Input) on 9 April 2025, seeking feedback from stakeholders and, in particular, from the first wave of preparers who applied the European Sustainability Reporting Standards (ESRS) in their 2024 Corporate Sustainability Reporting Directive (CSRD) sustainability reports. The ESRS are at the core of the CSRD’s sustainability assessment and reporting requirements.
This follows the publication of the European Commission’s (the Commission) Omnibus proposals aimed to streamline European Union corporate sustainability requirements. To support these aims, on 27 March 2025, EFRAG received a targeted mandate from the Commission to provide proposals to revise and simplify the ESRS by 31 October 2025. The Commission intends to utilize EFRAG’s technical advice to draft a delegated act covering the reduced ESRS reporting obligations under CSRD.
EFRAG sets out that this Call for Input will complement its ongoing interviews and workshops with preparers, auditors, and users of sustainability data, which will also inform their technical advice on the revised ESRS. The request in the Call for Input is on key areas of the Commission’s identified areas for simplification, including:
Least relevant/most challenging: identifying mandatory datapoints that are least relevant or most problematic for general-purpose sustainability per each disclosure requirement in the ESRS, with separate consideration across cross-cutting, environmental, social, and governance matters in the ESRS;
Clarity: how to modify the ESRS provisions that are deemed unclear;
Consistency: how to improve consistency with other EU legislation;
Materiality: how to improve the ESRS provisions on materiality to ensure that undertakings report only material information, do not report unnecessary information and do not dedicate excessive resources to the materiality assessment process;
Simplifying: how to simplify the structure and presentation of the ESRS and any other modifications that could simplify the ESRS without comprising their role in supporting the European Union’s Green Deal; and
Interoperability: how to further enhance interoperability with global sustainability reporting standards.
Input is expected on the basis of an online questionnaire. The outcome of this Call for Input will be anonymized and leveraged only in aggregate form.
China’s State Council Releases White Paper “China’s Position on Certain Issues in China-US Economic and Trade Relations” – China Continuously Improves IP Protection and Prohibits Forced Technology Transfer
On April 9, 2025, China’s State Council Information Office released a white paper entitled “China’s Position on Certain Issues in China-US Economic and Trade Relations” (关于中美经贸关系若干问题的中方立场) in response to the ongoing trade war. With respect to intellectual property, the white paper states that China has continuously improved intellectual property protection and prohibits forced technology transfer. The white paper appears to address allegations made in the America First Trade Policy and the Report to the President on the America First Trade Policy Executive Summary but not the more recent and detailed United States Trade Representative 2025 National Trade Estimate Report on Foreign Trade Barriers.
The following are IP-related excerpts from the Chinese version of the white paper. The full text of the white paper is available here (Chinese). An English version of the white paper is available here.
II. China conscientiously implements the first phase of the China-US economic and trade agreement
As a responsible major country, China has conscientiously fulfilled its obligations under the agreement, protected intellectual property rights, increased imports, and expanded market access, creating a good business environment for investors from all countries, including American companies, to participate in sharing the dividends of China’s economic development.
1. Continuously improving intellectual property protection
Innovation is the primary driving force for development, and protecting intellectual property rights is protecting innovation. China has taken multiple measures to protect trade secrets, protect pharmaceutical intellectual property rights, combat online infringements, and tighten intellectual property law enforcement, and has conscientiously implemented the relevant commitments in the intellectual property chapter of the agreement.
Strengthen the protection of trade secrets. In September 2020, the Supreme People’s Court issued the “Regulations on Several Issues Concerning the Application of Law in the Trial of Civil Cases of Infringement of Trade Secrets”, the Supreme People’s Court and the Supreme People’s Procuratorate issued the “Interpretation on Several Issues Concerning the Specific Application of Laws in Handling Criminal Cases of Infringement of Intellectual Property Rights (III)”, and the Supreme People’s Procuratorate and the Ministry of Public Security issued the “Decision on Amending the Regulations on the Standards for Filing and Prosecuting Criminal Cases under the Jurisdiction of Public Security Organs”. In December 2020, the National People’s Congress passed the Criminal Law Amendment. The above regulations cover the definition of the scope of prohibited acts that constitute infringement of trade secrets, the definition of criminal acts of theft of trade secrets, the application for temporary injunctions in cases of theft of trade secrets, and the adjustment of the threshold for initiating criminal investigations.
Improve the pharmaceutical intellectual property protection system. In October 2020, the Standing Committee of the National People’s Congress reviewed and adopted the decision to amend the Patent Law, adding relevant provisions on the early resolution mechanism for pharmaceutical patent disputes [patent linkage] and the patent term compensation system. In July 2021, the National Medical Products Administration and the National Intellectual Property Administration jointly issued the “Implementation Measures for the Early Resolution Mechanism for Pharmaceutical Patent Disputes (Trial)“, the National Intellectual Property Administration issued the “Administrative Adjudication Measures for the Early Resolution Mechanism for Pharmaceutical Patent Disputes“, and the Supreme People’s Court issued the “Regulations on Several Issues Concerning the Application of Law in Civil Cases of Patent Disputes Related to Drugs Applied for Registration“, establishing an early resolution mechanism for pharmaceutical patent disputes to ensure the effective implementation of the system. In December 2023, the State Council announced the decision to amend the Implementing Rules of the Patent Law, and the National Intellectual Property Administration simultaneously completed the revision of the patent examination guidelines and made detailed provisions on the patent term compensation system. In addition, in the revision of the patent examination guidelines completed by the National Intellectual Property Administration in 2021, the relevant content of supplementary experimental data was further improved.
Improve the trademark and geographical indication protection system. In April 2019, the Standing Committee of the National People’s Congress reviewed and adopted the decision to amend the Trademark Law, adding relevant content to regulate malicious trademark registration, increasing the penalties for infringement of trademark exclusive rights, and significantly increasing the illegal costs of counterfeiters of registered trademarks. Since then, the National Intellectual Property Administration has successively formulated and issued the “Several Provisions on Regulating Trademark Application and Registration Behaviors”, “Trademark Infringement Judgment Standards”, “Trademark General Violation Judgment Standards” and other regulations to continue to crack down on malicious trademark registration applications. In December 2023, the National Intellectual Property Administration formulated and issued the “Geographical Indication Product Protection Measures” and “Collective Trademark and Certification Trademark Registration and Management Regulations”, further improving the legal rules for the protection of geographical indications.
Actively promote Sino-US intellectual property exchanges and cooperation. Through consultations on work plans and signing of memorandums of understanding on cooperation with the US intellectual property authorities, deepen mutually beneficial and pragmatic cooperation in various technical fields such as intellectual property review, expert exchanges, and awareness raising. Maintain good communication and exchanges with US-funded enterprises with a positive and open attitude, listen to opinions and suggestions on China’s intellectual property system, and coordinate to resolve the reasonable intellectual property demands of enterprises in China.
Step up efforts to combat online infringement. In September 2020, the Supreme People’s Court issued the “Guiding Opinions on the Trial of Civil Cases Involving Intellectual Property Rights on E-commerce Platforms” and the “Reply on Several Legal Application Issues in Disputes Involving Internet Intellectual Property Infringement”, which involved issues such as rapid removal, the effectiveness of notifications and counter-notifications. In November 2020, the Standing Committee of the National People’s Congress passed amendments to the Copyright Law, including the addition of civil remedies for copyright infringement. In August 2021, the State Administration for Market Regulation issued the “Decision on Amending the E-commerce Law of the People’s Republic of China (Draft for Comments)”, which amended the procedures and penalty provisions of the notification and removal system.
Strengthening intellectual property law enforcement. In August 2020, the State Administration for Market Regulation and other departments issued the “Opinions on Strengthening the Destruction of Infringing and Counterfeit Goods”, and the State Council amended the “Regulations on the Referral of Suspected Criminal Cases by Administrative Law Enforcement Agencies”, requiring that cases involving intellectual property crimes be referred to public security agencies by administrative law enforcement agencies. China has also continuously strengthened infringement and counterfeiting law enforcement actions. In 2024, market supervision departments organized special actions such as intellectual property law enforcement to further strengthen the governance of key areas, key commodities, and key markets. Various special actions investigated and dealt with nearly 675,000 cases, including 43,900 trademark infringement and counterfeit patent cases, and carried out about 88,000 law enforcement actions against key physical markets with high incidence of infringement and counterfeiting. The General Administration of Customs further strengthened the enforcement of intellectual property protection, taking special actions as a starting point, and maintained a high-pressure situation to combat infringement in the import and export links. 41,600 batches and 81.6051 million pieces of suspected infringing goods were detained throughout the year.
2. Prohibition of forced technology transfer
China firmly opposes any form of forced technology transfer, always takes mutual benefit and win-win as the basic value orientation in conducting international technology cooperation, encourages and respects Chinese and foreign companies to voluntarily conduct technology transfer and licensing in accordance with market principles, provides a good market environment for Chinese and foreign technology holders to obtain benefits through technology transfer and licensing, and also provides support for promoting global scientific and technological progress and international economic and trade development. The US calls the voluntary contractual behavior of foreign-invested enterprises and Chinese companies to conduct technical cooperation and jointly obtain commercial returns in the Chinese market “forced technology transfer”, which is inconsistent with the facts.
Forced technology transfer is clearly prohibited from a legal perspective. The Foreign Investment Law, issued in March 2019, stipulates that “administrative organs and their staff shall not use administrative means to force technology transfer”. The Administrative Licensing Law, revised and issued in April 2019, stipulates that “administrative organs and their staff shall not directly or indirectly require technology transfer in the process of implementing administrative licensing”. The Regulations for the Implementation of the Foreign Investment Law, issued in December 2019, further refine the above provisions and prohibit any form of forced technology transfer.
Comprehensively strengthen the confidentiality responsibility of administrative agencies and staff. Chinese law clearly stipulates that administrative agencies and their staff shall keep confidential the commercial secrets of foreign investors and foreign-invested enterprises that they learn about in the course of performing their duties. The Foreign Investment Law stipulates that “administrative agencies and their staff shall keep confidential the commercial secrets of foreign investors and foreign-invested enterprises that they learn about in the course of performing their duties, and shall not disclose or illegally provide them to others”; administrative agency staff “who disclose or illegally provide to others commercial secrets learned in the course of performing their duties shall be punished in accordance with the law; if a crime is constituted, criminal liability shall be pursued in accordance with the law.” The Administrative Licensing Law also makes similar provisions in this regard.
Continuously expand market opening and investment access. China insists on optimizing the market environment, expanding foreign investment access, increasing the choice and freedom of foreign companies to invest in China, and creating good conditions for foreign companies to voluntarily carry out technical cooperation with Chinese companies in accordance with market principles. China has established a national treatment plus negative list management system for foreign investment access, replacing the “case-by-case approval” system for the establishment and change of foreign-invested enterprises with a convenient and fast information reporting system. China has also launched a series of measures to encourage foreign investment and continuously improve the foreign investment environment. In 2024, the General Office of the CPC Central Committee and the General Office of the State Council issued the “Opinions on Improving the Market Access System”, requiring “strengthening the coordination of domestic and foreign investment access policy adjustments, and adhering to the principle of national treatment without reducing the access opportunities of existing business entities”, and further improving the construction of the market access system, optimizing the access environment, and improving market access efficiency at the central level.