On March 20, 2025, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) designated the “teapot” Chinese oil refinery Shandong Shouguang Luqing Petrochemical Co., Ltd. (“Luqing Petrochemical”), its chief executive officer, eight vessels, and eleven vessel owners, managers, and operators, on OFAC’s List of Specially Designated Nationals and Blocked Persons (“SDN List”). OFAC explains that Luqing Petrochemical purchased hundreds of millions of dollars’ worth of crude oil from Iran, at times using vessels linked to designated terrorist organization Ansarallah—also known as the Houthis—and the Iranian Ministry of Defense of Armed Forces Logistics.

On the same day, the Department of State designated Huaying Huizhou Daya Bay Petrochemical Terminal Storage Co., Ltd.  (“Huaying Petrochemical”). The Department’s press released explains that Huaying Petrochemical is a crude oil and petroleum products storage terminal in the port of Huizhou in China that received and stored Iranian-origin crude oil onboard a blocked tanker.  Both departments cited President Trump’s reinstatement of “maximum pressure” on Iran as the impetus for these actions.

This represents an escalation of OFAC’s Iran-related designations since President Trump took office.  Over the last two months, OFAC has issued several rounds of designations, often targeting vessels and related parties for trading in Iranian crude.  Today’s actions specifically target downstream entities in China, which buys the majority of Iran’s oil exports, and OFAC highlights that it is the first time, that the U.S. government has designated a Chinese oil refinery for refining Iranian oil.

We will continue to closely monitor the Trump Administration’s expansion of its maximum pressure campaign, particularly to the extent that it expands beyond those directly transacting with Iranian parties to capture further downstream users or refiners of Iranian products.  Companies should continue to engage in their know-your-customer (“KYC”) processes to confirm that they are not having indirect dealings with Iran, as well as to confirm whether any counterparties in China, the United Arab Emirates, or other known diversion points have historic dealings with Iran, which could subject the counterparties to sanctions designations.

On February 26, 2025, Senators Jim Banks (R-Ind.) and Mark Warner (D-Va.) introduced the Maintaining American Superiority by Improving Export Control Transparency Act (the Act) in the United States Senate. A companion bill titled the same was reintroduced in the United States House of Representatives on March 5, 2025, by Congressman Ronney Jackson (R-TX-13).

The Act would amend the Export Control Reform Act of 2018 to require the Secretary of Commerce to submit an annual report to Congress on license applications, enforcement actions, and other requests for authorization for the export, reexport, release, and in-country transfer of items subject to the U.S. Export Administration Regulations (EAR) to entities: (i) located in or operating in a D:5 country; (ii) included on the U.S. Department of Commerce Bureau of Industry and Security (BIS) Entity List; or (iii) included on the BIS Military End-User List.

Specifically, the Act would require the report to include the following details for all applicable license applications or other requests for authorization: (i) the name of the entity submitting the application; (ii) a brief description of the item and its Export Control Classification Number (ECCN); (iii) the name of the end-user; (iv) the end-user’s location; (v) the value of the items; (vi) the agency’s decision with respect the license application or authorization; and (vii) the date of submission of the application.  Further, the report would require Commerce to provide the date, location, and result of any related enforcement activities, such as end-use checks and aggregate statistics on all license applications and other requests for authorizations.

Representative Jackson introduced a similar bill in the House of Representatives in December 2023, which passed the House and stalled in the Senate.

We are proud to share that our partner Caroline Brown is named on the Foreign Investment Watch Top Advisor list for the second consecutive year. To learn more about this 2025 recognition as a top advisor on foreign investment and national security in the United States and abroad and Caroline’s practice, read HERE.

On March 6, 2025, following discussions with the heads of major U.S. automakers, the White House announced a one-month suspension of the IEEPA tariffs on Mexico and Canada for certain USMCA-originating automotive sector products. The White House subsequently expanded that temporary suspension to all products from Canada and Mexico that satisfy USMCA’s “origination” requirements. Products that qualify for exemption from “ordinary” customs duties under USMCA’s terms and requirements will now be exempt from the IEEPA tariffs for one month, to facilitate supply chain adjustments and onshoring of manufacturing operations.  See below for language that is a direct quotation from the White House Fact Sheet:

  • Duties imposed to address the flow of illicit drugs across our borders are now:
    • 25% tariffs on goods that do not satisfy U.S.-Mexico-Canada Agreement (USMCA) rules of origin.
    • A lower 10% tariff on those energy products imported from Canada that fall outside the USMCA preference.
    • A lower 10% tariff on any potash imported from Canada and Mexico that falls outside the USMCA preference.
    • No tariffs on those goods from Canada and Mexico that claim and qualify for USMCA preference.

As they have on each previous anniversary, the EU and UK released new sanctions against Russia on February 24, 2025, to mark the three-year anniversary of Russia’s full-scale invasion of Ukraine. For the first time, the United States did not do the same, electing to issue a limited set of Iran-related sanctions on the anniversary instead. The EU package was more fulsome than the UK package, including new port and airport restrictions, additional trade restrictions (including an aluminium ban), enhanced military end-user restrictions, and additional asset freezes and vessel designations.

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On February 21, 2025, the Office of the United States Trade Representative (USTR) announced its proposed actions following the Section 301 investigation of China’s targeting of the maritime, logistics, and shipbuilding sectors for dominance.

The Section 301 investigation was initiated on April 17, 2024. Following the investigation, USTR determined that China’s targeting of the maritime, logistics, and shipbuilding sectors for dominance is unreasonable and burdens U.S. commerce, in part because it displaces foreign firms and restricts business opportunities in the U.S.

Key aspects of USTR’s proposed actions following its determination include:

Fees on Services:

  • Charging Chinese maritime transport operators a service fee up to $1 million per entrance to a U.S. port or up to $1,000 per net ton of the vessel’s capacity.
  • Charging maritime transport operators with fleets comprised of Chinese-built vessels a fee up to $1.5 million upon entrance to a U.S. port.
  • Charging maritime transport operators with prospective orders for Chinese vessels an additional service fee based on the percentage of vessels ordered from Chinese shipyards.
  • Service fee remission up to $1 million per entry into a U.S. port for U.S.-built vessels through which the operator is providing international maritime transport services.

Restrictions on Services to Promote the Transport of U.S. Goods on U.S. Vessels:

  • Annual requirements that the international maritime transport of a certain percentage of U.S. goods is exported on U.S.-flagged vessels by U.S. operators. The percentage requirements increase incrementally after the date of action, starting with 1% as of the date of action, 3% two years following the date of action, 5% three years following the date of action, and 15% seven years following the date of action.  

Other Actions:

  • Proposed actions to reduce exposure to China’s National Transportation and Logistics Public Information Platform (LOGINK) and similar platforms.
  • Potential negotiations with U.S. allies to reduce dependencies on China in the maritime, logistics, and shipbuilding sectors.

The comment period for the proposed actions opened on February 21, 2025. The deadline for written comments is March 24, 2025.

On February 7, 2025, Representative Mark Green (R-TN-7) introduced the China Technology Transfer Control Act, a bill which would restrict the export to the People’s Republic of China (“PRC”) certain “national interest technology” and intellectual property. According to a statement by Rep. Green, the bill is intended as a sign to “get serious about protecting our sensitive technologies and to impose severe costs when China uses our technology for malign purposes,” citing Tiktok, DeepSeek, and RedNote (also known as Xiaohongshu) as recent examples of malign Chinese influence on U.S. national and economic security.

As drafted, the technologies and IP that would be controlled are as follows:

•           “Technology or intellectual property that would make a significant contribution to the military potential of the People’s Republic of China that would prove detrimental to the national security of the United States.”

•           “Technology used by the Government of the People’s Republic of China to carry out violations of human rights or religious liberties.”

•           Technology or intellectual property that is a “component of the production of products,” where those products are (1) manufactured or produced in, or exported from, the People’s Republic of China, and (2) determined by the United States Trade Representative to be  (a) supported by the PRC government pursuant to the Made in China 2025 Policy, or (b) otherwise receive support from the Chinese government and that have or will in the future displace net exports of like products by the United States. The bill flags a few items that should be included in this category: 

o          Civil aircraft.

o          Turbine engines.

o          Motor cars and vehicles.

o          Advanced medical equipment.

o          Advanced construction equipment.

o          Agricultural machinery.

o          Railway equipment.

o          Diesel locomotives.

o          Moving freight.

o          Semiconductors.

o          Lithium battery manufacturing equipment.

o          Artificial intelligence.

o          High-capacity computing.

o          Quantum computing.

o          Robotics.

o          Biotechnologies.

The bill also would require the President to impose asset-freezing sanctions on any foreign person that sells to China or purchases from China any of the aforementioned items, or on any Chinese person who knowingly uses one of those items (whereby the Chinese person received that item in violation of U.S. export controls). Versions of this bill were introduced in the last three Congresses, but did not advance beyond the relevant committees during those sessions.

On February 10, 2025, President Trump signed a new Proclamation abolishing as of March 12, 2025 the quota system for the EU and imposing 25% tariffs on all steel products imported into the U.S.. This effectively puts the end to current agreement between the U.S. and the EU which kept the tariffs on steel and alumininum at bay on both sides of the Atlantic for past years.

The EU immediately announced that this U.S. action will trigger firm and proportionate countermeasures. EU Trade Ministers are expected to convene on February 12, 2025 to prepare a coordinated response.

So, what are those measures and how can it affect your business?

Existing tariffs, which came to existence in 2018 and were suspended since 2021, are expected to come back to life. The products affected are not only steel and aluminium but a large number of products, such as sweetcorn, kidney beans, rice, peanut butter, bourbon whiskey, tobacco products, cotton products, footwear, motorcycles, and many others. The additional ad valorem duties are of a rate between 10% and 50%. The existing list of products exported from the US and targeted by the EU are set out in Annexes I and II of the Commission Implementing Regulation (EU) 2018/724 of 16 May 2018 (as amended) and in Article 1 of the Commission Implementing Regulation (EU) 2020/502 of 6 April 2020. If no new agreement is reached, the existing EU tariffs will automatically resume on March 31, 2025.

However, taking into account the scope of the U.S. tariffs additional EU tariffs on other products can be expected. Stay tuned.

Background of the measures

On March 8, 2018, President Trump signed two Proclamations to impose additional duties of 25% and 10% respectively on certain imports of steel and aluminum products into the United States, including the European Union. Those measures took effect on March 23, 2018. In response to these measures, the EU imposed a rebalancing tariff from 10% to 50% effective as of June 20, 2018. 

On October 31, 2021 the EU and the US announced the establishment of a quota-tariff system on imports into the US of EU steel and aluminum products, as a result of which the EU agreed to  suspend its tariff increase. That agreement is set to expire on March 31, 2025.

On February 10, 2025, the White House released an executive order (“EO” or “Order”) titled “Adjusting Imports of Steel into the United States”  that reinstates a 25% tariff on imports of steel and steel derivative products into the United States.  The administration has also previewed a parallel executive order on aluminum and aluminum derivative product imports. 

The Order lays out sweeping changes to the existing Section 232 tariffs on steel products, including but not limited to ending exclusions for U.S. importers, raising tariffs on subject steel products to 25% across the board from all countries, and expanding the definition of a steel derivative products.  The new tariffs are effective March 12, 2025.

Section 232 tariffs on steel and aluminum were initially implemented during President Trump’s first administration in 2018, following an investigation by the U.S. Secretary of Commerce into the adverse impacts of foreign steel on U.S. national security.  The Secretary’s findings provided the basis for increases in the ad valorem duty rates applied to all foreign steel and aluminum imports—to 25% for steel and 10% for aluminum—with certain country-level general exclusions resulting from “alternative agreements” with countries such as Canada and a temporary exclusion for Ukraine.

This latest executive order follows a slew of other trade actions enacted by President Trump at the beginning of his second term with the aim of closing “existing loopholes and exemptions” to safeguard industries critical to U.S. national security and shield these industries from unfair trade practices and global excess capacity. The Order eliminates all alternative arrangements, quotas, and tariff-rate quotas (“TRQs”), expands the scope of tariffs to cover downstream products, terminates all general approved exclusions, and applies strict “melted and poured” standards.

The scope of the Order remains unclear.  Under the prior section 232 tariffs, the lists of steel and aluminum derivatives that were subject to these tariffs were relatively limited in nature, as set out in the annexes of Proclamation 9705 and 9980.  However, the new Order states that additional derivative products will become subject to these tariffs, which are listed in the Annex to the Order.  As of today, this Annex has not yet been published. 

With respect to individual exclusions enjoyed by companies since the inception of the section 232 tariffs on steel and aluminum, companies will no longer be able to request exclusions on certain products going forward as the exclusion processed is now closed. All pending requests for exclusion should be considered terminated. However, exclusions already granted should be considered active and will remain in effect either until the quantity of the exclusion is fulfilled or the exclusion expires, whichever occurs first. Pursuant to the Order, general HTS-level exclusions for certain product lines will end on March 12, 2025.

Crowell will continue to monitor information pertaining to the Section 232 tariffs as it is released. Please see the White House Fact Sheet on the restoration of Section 232 tariffs here.

On February 5, 2025, the White House issued an amendment to an Executive Order (“EO”) issued by President Trump on February 1, titled “Imposing Duties to Address the Synthetic Opioid Supply Chain in the People’s Republic of China.” The amendment states that “de minimis treatment under 19 U.S.C. 1321 is available for otherwise eligible covered articles…but shall cease to be available for such articles upon notification by the Secretary of Commerce to the President that adequate systems are in place to fully and expediently process and collect tariff revenue” on said articles. While this amendment is a significant departure from the original text of the Order, which stated that “de minimis treatment…shall not be available” for any goods of Chinese origin, the amendment does not provide an estimated timeframe for the duration of de minimis reinstatement.

Crowell & Moring continues to monitor this and other developments in the customs space and their impact on business and industry.