International Trade Regulations

Export bans to Russia from the US, EU, and UK are often circumvented through sales to third parties who are outside the reach of sanctions who then resell to Russia. The EU has responded by requiring exporters to include “no-export-to-Russia clauses” in their contracts with buyers of certain sensitive goods, including weapons and goods relating to aviation.  The UK government has not required the use of “no-export-to-Russia clauses”. But it has now released guidance that encourages their use. The government has published a model clause for exporters to use. The clause is very similar to the one suggested by the EU with one significant difference I’ll mention below. Clause 1 states: “The [Importer/Buyer] shall not sell, export or re-export, directly or indirectly, to the Russian Federation or for use in the Russian Federation any goods supplied under or in connection with this Agreement that fall under the scope of The Russia (Sanctions) (EU Exit) Regulations 2019.” What about supply to Russia further down the supply chain? Standing alone, section 1 doesn’t necessarily cover all situations where the buyer sells on to a sub-buyer who then sells on to a Russian sub-sub-buyer. The buyer would in some such cases be reselling “indirectly” to Russia, but arguably that would require some knowledge by the buyer of the sub-buyer’s purpose. The model clause seeks to deal with this issue by adding section 2: “(2) The [Importer/Buyer] shall undertake its best efforts to ensure that the purpose of clause (1) is not frustrated by any third parties further down the commercial chain, including by possible resellers.” In section (3), the model clause also requires the buyer to maintain a monitoring system to detect activities further down the supply chain that would frustrate clause 1’s purpose. Section (4) states that a breach of sections (1)-(3) is a material breach, effectively making these obligations “conditions” in a contract governed by English law (in the sense that any breach gives rise to a right to terminate the contract). Questions upon which you might wish to comment:  1.   The requirement of “best efforts to ensure that the purpose of clause (1) is not frustrated by any third parties further down the commercial chain” is vague. Why not require the buyer to include (a) a similar no-export-to-Russia clause in its onward sales contract coupled with (b) a requirement for sub-buyers to do the same (and so on)?  2. In a long-term contract, the spectre of termination may be a significant deterrent, but less so in a one-off deal. It may be difficult to establish or quantify loss. So isn’t there a case for stipulating damages?  The EU thought so, suggesting in its model clause “a penalty of [XX]% of the total value of this Agreement or price of the goods exported, whichever is higher.” The word “penalty” is a no-no in English contract law, but it’s now permissible for a stipulated damages clause to have a deterrent purpose.

Will this be the end of the #BrusselsEffect? I have been asked this question multiple times over the last few months as the #Trump administration has been increasing its assaults on the #European #regulatory state, threatening the #EU with tariffs and withdrawal of security guarantees if the continent does not back off on its investigations on #US #tech companies. Together with my terrific colleagues Daniel Kelemen and Tommaso Pavone, we take on this question in Foreign Affairs Magazine today. Few highlights: ▶️ The Trump administration’s threats alone cannot force EU regulators to capitulate. The greater threats to the EU’s regulatory power today are those coming from inside the EU, such as calls by European industry for relaxing #regulation in the name of enhancing #competitiveness. ▶️ Yes, the #EU lags behind the #US in #tech innovations. But shredding EU regulations will not close this gap. Letting Elon Musk write the rules for Europe and not enforcing Europe’s #digital regulations will not make the EU a global superpower. Instead of relinquishing its rights-driven regulatory model, the EU should now deploy that same zeal to build other pillars of a thriving tech ecosystem. ▶️ The EU should cultivate tech entrepreneurship through completing the #DigitalSingleMarket and creating a true #CapitalMarketsUnion that would help EU tech companies scale and fund their innovations. It should relax #immigration laws that inhibit attracting global talent. And it should harmonize the #bankruptcy regimes across member states to make failure less fatal. This would encourage European entrepreneurs to take risks and pursue more disruptive innovations. ▶️ As the #US retreats from defending fundamental rights and liberal #democracy, the EU’s regulatory superpower is more necessary than ever. Today, the EU can (and must) stand as a beacon of stability and the #RuleofLaw. It can reassure the world that, unlike the US, the EU has not lost sight of where its influence comes from, who its allies are, and where its values lie. Thus, the #BrusselsEffect will survive as long as the Europeans themselves don't lose confidence in their regulations - and the values that underlie those regulations. If the EU lets the Brussels Effect die out, it would not be a defeat but an unnecessary surrender. The full article can be read here: https://lnkd.in/ebiutxaM

The revamped §232 steel and aluminum tariffs, especially the tariffs on derivative products, are likely to significantly shift effective tariff rates upwards for many products especially those produced in Canada and Mexico. The reason is that the revised §232 tariffs apply to the entire value of the product, as opposed to just the steel or aluminum content. Mexico and Canada are especially impacted because the prior approach tariffed the steel or aluminum content at 50%, but the remainder of the value was duty free if it came in under USMCA. Below is one example of an import category that, from everything I can see in the data, is set for a major increase in effective tariff rates: truck trailers (HTS 8716.39.00). One chart showing the effective tariff rate for imports from Mexico (by far the largest source). Thoughts: •The effective tariff rate for truck trailers was just 2.1% as of February 2026. $2,221,318 in duties we calculated for $108,018,857 of imports. •Why is this figure so low? My educated guess: the steel and aluminum derivatives originally applied only to the value of the steel or aluminum itself, which didn't include processing, machining, milling, heat treating & annealing. These value adding steps constitute much more of the value. •Canada and Mexico are much more affected than the EU because for something like EU construction equipment, the remainder of the value not in steel or aluminum was tariffed at 15%. The USMCA exemption made this figure 0%. •This issue applies beyond just capital goods and also affects intermediate inputs like Canadian steel doors and Mexican air conditioner parts. Implication: Mexico and Canada are the most negatively affected countries by the revamped §232 steel and aluminum derivative tariffs that apply tariff rates to the entire value of the good, not just the value of the steel and aluminum. Will this shift production to the USA? I doubt, since the tariffs on raw steel and aluminum have so inflated the domestic price in the USA that you are better off paying a 25% tariff on an imported aluminum air conditioner part from Mexico than making it in the USA where aluminum is 50% more expensive than in Mexico. #supplychain #freight #trucking #logistics #transportation

What do your e-scooter, car, washing machine, and fighter jets have in common? ↳ Rare-earth magnets. Right now, they're caught in a geopolitical tug-of-war. If this headline hasn’t made it to your feed, you’re not alone. Algorithms assume if you’re not a diplomat, EV engineer, supply chain strategist, or working in climate policy, you won’t care. But maybe, just maybe, you should. China, which processes over 90% of the world’s rare-earth magnets, has curbed exports. A bureaucratic policy shift? Maybe on paper. In reality: factory slowdowns, stalled mobility, and climate setbacks. In India, where the electric two-wheeler market was finally picking up momentum, manufacturers are warning of halted production from July. ↳ With no local substitutes and export permits stuck in red tape, it’s not just assembly lines at stake. It's about jobs, urban transport, and clean energy goals, all at risk. And the impact doesn’t stop there. From Detroit to Düsseldorf, carmakers are scrambling. Everything from seat belt sensors to wiper motors is now on a fragile thread. Even the tech inside your phone and your family's scooter is now geopolitically fragile. So, this isn’t just about EVs. It’s about how critical materials have become political leverage in a high-stakes global game. And how economies, environments, and everyday lives are tangled in its outcome. The numbers tell the story: ~ India needs up to 7,500 tonnes of rare-earth magnets each year. ~ 100% imported from China. ~ 0 backup if the shipments stall. But here’s the opportunity—if India is bold and quick enough to take it: ~ Build resilient, domestic magnet manufacturing. ~ Strengthen material diplomacy across supply corridors. ~ Invest in battery-to-magnet recycling and rare-earth recovery. ~ Back deep tech ventures reimagining motor technologies entirely. What we’re witnessing isn’t just a supply chain glitch. It’s a trailer of what’s to come—where climate goals, capital flows, and geopolitical control converge. Also, yes, it’s one of the reasons why silver prices in India are spiking. If this post made rare earths feel a little less rare, and a lot more real, share it. Because this isn’t industry news. It’s everyone’s business. 🔗 businessline coverage by Aroosa Ahmed: https://lnkd.in/gPJGcdMj #SupplyChains #ElectricVehicles #India

When people talk about reducing dependence on China for critical minerals, they usually point to lithium or rare earths. Almost nobody talks about tungsten. They should. China produced 78.8% of the world's mined tungsten in 2025. The next four largest producers were Vietnam at 3.5%, Kazakhstan at 2.8%, North Korea at 2.4%, and Russia at 2.4%. Read that list again. The countries available to diversify away from Chinese tungsten supply are Vietnam, Kazakhstan, North Korea, Russia, Bolivia, and Rwanda. That is the alternative supply base for a metal used in armour-piercing ammunition, turbine blades, cutting tools, and semiconductor manufacturing equipment. Beijing knows this. In February 2025, the Ministry of Commerce imposed export licensing on tungsten products. By January 2026, it had whitelisted just 15 companies authorised to export tungsten for the 2026-2027 period. APT exports, the critical precursor for downstream tungsten processing, dropped roughly 70% year-on-year. Tungsten carbide prices nearly tripled. Japan was specifically targeted with end-use restrictions tied to defence applications. Beijing didn't ban exports outright. It built an administrative licensing system that allows selective enforcement, rewarding cooperative trade partners while choking supply to adversaries. Formally WTO-compliant. Functionally a weapon. The entire Western defence industrial base depends on a material where nearly 80% of primary supply sits in a single country and the runner-up alternatives include a hermit kingdom under international sanctions. Tungsten doesn't make headlines. It should. For more of my takes on the resource industry sign up to my weekly newsletter www.kamoacap.com Kamoa Capital is partnering with Terra Metals as they advance Australia's next major PGM discovery. #CriticalMinerals #Tungsten #Mining #Resources #CapitalMarkets #EnergyTransition Source: USGS Mineral Commodity Summaries 2026; ITIA; Fastmarkets. Chart: Kamoa Capital.

The European Commission is moving to simplify EU regulation, but the real shift is towards stronger enforcement and tighter compliance. In its latest plan to modernise EU lawmaking, the Commission sets out a clear direction: fewer complexities on paper, but higher expectations in practice. At the core is a structural change in how regulation is designed and applied across the Single Market. The proposal focuses on five key pillars. → Simplicity by design: future EU laws will be built to be clearer, easier to implement, and more explicit on obligations, compliance pathways and consequences. → A strengthened better regulation framework: already considered one of the most advanced globally, it will now place greater emphasis on evidence, transparency and stakeholder engagement. → A regulatory deep cleaning exercise: an Action Plan will review existing legislation across 12 priority areas to remove overlaps, inconsistencies and unnecessary complexity. → Tackling regulatory gold-plating: the Commission aims to reduce additional national requirements that go beyond EU law, a long-standing barrier to a truly integrated Single Market. → Faster and more robust enforcement: this includes reducing long-standing infringement cases and strengthening the application of Single Market rules in key sectors. A simpler regulatory framework does not mean lower scrutiny. It means clearer rules, fewer grey areas, and stricter enforcement of compliance. In practice, this will reshape how companies manage regulatory risk, particularly those operating across multiple EU jurisdictions, where divergence and gold-plating have historically added complexity and cost. From a competitiveness perspective, the Commission is positioning regulatory clarity as a lever to unlock growth, accelerate investment and strengthen the Single Market. But the success of this shift will depend on consistent implementation across Member States and alignment between EU institutions. The question for organisations is no longer whether regulation will evolve, but whether their compliance models are ready for a more enforceable, evidence-driven system. #compliance #EU #regulations

Europe's Digital Crossroads 🇺🇸🇨🇳🔀🇪🇺 While Europe stands as an economic powerhouse, our digital economy remains a step behind - creating vulnerabilities that threaten our core values and independence. This digital dependence has real-world consequences. We've witnessed foreign entities manipulating European elections through social media platforms. The evidence is clear of foreign actors trying to tip the scale. From the 2016 EU-Ukraine Association Treaty referendum in the Netherlands to Brexit and the recent Romanian presidential elections. For years, Europe placed its trust in American handling of our data. That confidence is eroding. JD Vance has plainly revealed where certain U.S. political factions stand, while Elon Musk, at Twitter/X's helm, is even less discrete and openly tries to interfere with our democratic conversations. Simultaneously, the White House contemplates banning TikTok, citing national security concerns related to Chinese control over American data. Trump however makes a very good point. We can, and should, make the same case for our European data. The situation intensifies today as Trump prepares to announce tariffs on European goods. True, we maintain a trade surplus in physical goods, but we face a deficit in digital services. We can use that deficit as a counterbalance to Trump's protectionism. The pattern becomes evident. We're approaching a trade conflict while both China and the United States assert influence over Europe's digital landscape through data collection, manipulation, and oversight. That's why the EU must act decisively by: - Reclaiming control of our data (and build a EU based infrastructure). - Safeguarding our electoral processes (by controlling our own social networks). - Developing indigenous technologies grounded in European principles and privacy protection. Europe isn’t powerless. We have real leverage. An affluent, well-educated population and regulatory leadership that already shapes global norms. This would make European SaaS a trusted alternative to US and Chinese offerings. The path forward presents challenges, but this pivotal moment could ignite a digital renaissance that returns Europe to the driver's seat of its own destiny. By marrying our democratic traditions with technological ambition, we can build a digital ecosystem where privacy isn't sacrificed for progress, where innovation serves citizens rather than surveilling them, and where European values shape the next chapter of the global internet. And the ecosystem is already moving. Just look at the sectors where Europe is about to mint its next wave of unicorns 👇 #MEGA

When geopolitics changes supply chains, Transfer Pricing cannot remain static. Conflicts, sanctions, and geopolitical shifts are forcing businesses to rethink sourcing, manufacturing hubs, and distribution models. But one function that often reacts late is Transfer Pricing. When companies re-source suppliers, nearshore operations, or create new regional hubs, the functional, asset and risk (FAR) profile of group entities inevitably changes - and so should the TP policy. Tax team should work together with business teams and revisit • Value chain maps - refresh them to reflect the new operating reality • FAR analysis - document how functions, assets, and risks have shifted • Commercial drivers - clearly capture why the restructuring happened (cost, resilience, regulatory risk, logistics etc.) • Intercompany arrangements - ensure they reflect the revised model Too often, TP documentation continues to reflect yesterday’s supply chain, while the business has already moved on. In a world of rapid geopolitical shifts, tax authorities will increasingly test whether profits are aligned with where value is actually created. As supply chains evolve, tax and transfer pricing policies must evolve with them. #TransferPricing #GlobalTax #SupplyChain #InternationalTax #BusinessStrategy

𝗕𝗿𝘂𝘀𝘀𝗲𝗹𝘀 𝗽𝗼𝘄𝗲𝗿, 𝗻𝗼𝘁 𝗕𝗿𝘂𝘀𝘀𝗲𝗹𝘀 𝗼𝘃𝗲𝗿𝗿𝗲𝗮𝗰𝗵. What 🇪🇺needs to do with regulation For decades,🇪🇺has shaped global standards through the Brussels Effect, exporting its rules thanks to the size of its Single Market. But in today’s geopolitical climate, that quiet power faces new limits My latest for Real Instituto Elcano with Fernando Pinto Main ideas ⬇️ ➡️ Trade has become weaponised, tariffs routine, and regulation itself a tool of power politics. As the 2024 Draghi Report warned, Europe risks losing its rule-making edge unless ambition is matched by competitiveness and legislative quality. ➡️ The challenge is not to retreat from regulation, but to apply it strategically: ✅know where sovereignty is uncontested, ✅where cooperation must meet European principles, ✅and where overreach would damage credibility and competitiveness. 1️⃣ 𝗦𝘁𝗮𝗿𝘁𝗶𝗻𝗴 𝘄𝗶𝘁𝗵 𝗱𝗶𝗴𝗶𝘁𝗮𝗹 𝗿𝗲𝗴𝘂𝗹𝗮𝘁𝗶𝗼𝗻, the DMA and DSA are milestones for fairer digital markets. Enforcement will be turbulent—lobbying, litigation, political pressure—but that is the price of credibility. Reform is legitimate and even necessary, but it must be a sovereign EU decision, guided by European interests and informed by, not dictated by, private operators. 2️⃣ 𝗧𝗲𝗰𝗵𝗻𝗼𝗹𝗼𝗴𝘆-𝘀𝗲𝗰𝘂𝗿𝗶𝘁𝘆 𝗽𝗼𝗹𝗶𝗰𝘆 is trickier. Cooperation with allies like the US is vital, but the EU has gone too far in its recent trade arrangement, pledging to keep its technology-security requirements in line with those of the United States. This approach undermines Europe’s regulatory sovereignty. Whom the EU trusts, which technologies it restricts, and how it defines risk must remain European decisions. Strategic cooperation, yes; strategic dependence, no. 3️⃣ 𝗦𝘂𝘀𝘁𝗮𝗶𝗻𝗮𝗯𝗶𝗹𝗶𝘁𝘆 𝗿𝗲𝗴𝘂𝗹𝗮𝘁𝗶𝗼𝗻 illustrates the opposite risk: overreach. The Corporate Sustainability Due Diligence Directive (CSDDD) aims to make firms accountable across supply chains—but its extraterritorial reach blurs jurisdiction and deters investment. A directive meant to promote responsibility may instead harm competitiveness. The Commission’s 2025 Omnibus package sought to simplify the regime, but arrived without impact assessment and is leaving one of it’s core issues—extraterritorial scope—unresolved. ⚠️Across digital, tech-security and sustainability, one lesson stands out: The Brussels Effect works when the EU leads with coherence and proportion, not overreach. It fails when ambition exceeds credibility. 𝗘𝘂𝗿𝗼𝗽𝗲 𝗺𝘂𝘀𝘁 𝗿𝗲𝗴𝘂𝗹𝗮𝘁𝗲 𝗮𝘁 𝗵𝗼𝗺𝗲, 𝗽𝗲𝗿𝘀𝘂𝗮𝗱𝗲 𝗮𝗯𝗿𝗼𝗮𝗱, 𝗮𝗻𝗱 𝗯𝗲𝗻𝗰𝗵𝗺𝗮𝗿𝗸, 𝗻𝗲𝘃𝗲𝗿 𝗯𝗼𝘄, 𝗶𝗻 𝗯𝗲𝘁𝘄𝗲𝗲𝗻. ✅Enforce firmly in digital markets. ✅Cooperate intelligently on tech-security (no copy-paste). ✅Re-scope sustainability rules to avoid extraterritorial spillovers. That is how Brussels protects both competitiveness and values. https://lnkd.in/dMX4x9Rj