Welcome to the second quarterly Supply Chain & Tariff Update, presented by Steptoe & Johnson Member and Supply Chain Team Leader, Randy Whitlatch.
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April 2025
In Smart Apparel United States, Inc. v. Nordstrom, Inc., the U.S. Court of Appeals for the Ninth Circuit reversed dismissal of the plaintiff’s breach of contract claims. The Court held that a U.S. Customs and Border Patrol (CBP) press release pertaining to the plaintiff did not provide the defendant with “reason to believe” that the plaintiff violated the “sanctioned person” warranties in the parties’ supply agreement. The defendant actually knew from audits and the parties’ course of dealings that the plaintiff did not use involuntary labor. Further, the Court held that the plaintiff adequately stated a claim for breach of the implied covenant of good faith and fair dealing by alleging that the defendant relied on the CBP press release as a pretext for canceling orders to manage excess inventory. 2025 U.S. App. LEXIS 7531 (9th Cir. Apr. 1, 2025).
Takeaway: Parties to supply contracts owe each other a duty of good faith and fair dealing, and companies using environmental, social, and governance (ESG) or other warranties as a basis for canceling orders to manage excess inventory do so at their own risk. Relying on an ESG or similar warranty may be viewed as pretextual.
In Raistone Purchasing, LLC-Series XXXVII v. Patino Ocampo, the Supreme Court of New York denied a motion to dismiss claims related to an alleged fraudulent scheme involving fabricated supply chain transactions. The plaintiff entered into a receivables purchase agreement with a nonparty supplier to facilitate what appeared to be a typical supply chain financing arrangement. According to the Complaint, however, no products were ever actually shipped, and the transactions were fictitious. The defendant allegedly instead funneled $13 million of financing payments through shell entities. The Court held that the complaint plausibly alleged fraud, conversion, and unjust enrichment. See 2025 N.Y. Misc. LEXIS 2116 (Sup. Ct. N.Y. Apr. 4, 2025).
Takeaway: Using documentation to simulate the physical movement of goods, particularly in support of a supply chain financing arrangement could open companies up to allegations of fraud.
In Mueller v. Deutsche Bank Aktiengesellschaft, the U.S. District Court for the Southern District of New York dismissed the plaintiff’s Trafficking Victims Protection Reauthorization Act (TVPRA) claims under Rule 12(b)(6). The defendant’s conduct did not plausibly rise to the level of knowingly participating in Islamic State group-related human trafficking. The Court reiterated that knowledge of risks is not the same as knowledge of trafficking. Also, arm’s-length transactions typically are not enough to establish participation in a venture under the TVPRA. See 2025 U.S. Dist. LEXIS 65178 (S.D.N.Y. Apr. 4, 2025).
Takeaway: Even though not a supply chain case per se, this case adopts the reasoning of a supply chain case, Apple v. Doe, and is worth noting for companies with supply chain partners in high-risk geographic areas.
In Zornberg v. NAPCO Sec. Techs., Inc., the U.S. District Court for the Eastern District of New York partially denied the defendant’s motion to dismiss the plaintiff’s securities fraud claims. The plaintiff alleged the defendant had bought as many component parts as it could at high prices to avoid running out of parts during COVID-19. Allegedly, as the shortages eased and prices fell, the defendant did not properly account for the lower value of the parts or how quickly they were being used or sold, thereby announcing lower costs and higher profits than it should have. The defendant claimed that this was partly due to poor internal systems and controls, including shortcomings in how the company handled access to technology, handled software updates, and tracked slow-moving or outdated inventory. 2025 U.S. Dist. LEXIS 69502 (E.D.N.Y. Apr. 11, 2025).
Takeaway: Companies should take care to maintain supply chain oversight, as courts may not accept this as an excuse for overstating profits. Real-time inventory tracking and forecasting tools may help mitigate the risk of overvaluing parts and underreporting costs and may help avoid inflated profit reports.
In In re Mobileye Glob. Sec. Litig., the U.S. District Court for the Southern District of New York dismissed the plaintiffs’ putative class action securities fraud claims. The plaintiff investors alleged that the defendant made misleading statements and had engaged in a so-called channel-stuffing scheme. The plaintiffs claimed that the defendant forced Tier 1 and OEM automotive supply chain partners to commit to taking excess future inventory, thereby artificially inflating sales figures and the price of the defendant’s stock during the class period. The Court held that the plaintiffs had not plausibly pled any of the elements of the claims and that the statements, which were made in various earnings statements and SEC filings, were neither false nor misleading. In re Mobileye Glob. Sec. Litig., 2025 U.S. Dist. LEXIS 71923 (S.D.N.Y. Apr. 15, 2025).
Takeaway: Even though this complaint was dismissed, companies should take care to review all earnings statements and SEC filings following supply chain scarcity or glut to ensure the statements accurately reflect circumstances, particularly if arrangements are made with channel partners to take more inventory than usual.
In Highline Spirits Co., LLC v. Vosa Spirits, LLC, the U.S. District Court for the Western District of Michigan denied a motion for a preliminary injunction in a trademark infringement case. The overarching issue was the likelihood of confusion between the registered trademark HIGHLINE and the defendant’s use of the brand High Line. One factor weighing against the entry of a preliminary injunction was the fact that an injunction would significantly disrupt the defendant’s supply chain and harm its downstream relationships. This outweighed potential harm to the plaintiff. 2025 U.S. Dist. LEXIS 99138 (W.D. Mich. Apr. 15, 2025).
Takeaway: Courts often take into consideration the effects of an injunction on a company’s supply chain when weighing the balance of harm or as part of weighing the public interest in an injunction.
In Hoshine Silicon (Jia Xing) Indus. v. United States, the Court of International Trade (CIT) partially dismissed the plaintiff’s motion to modify Customs and Border Patrol’s (CBP) refusal to modify a withhold release order (WRO) that applied to the plaintiff’s parent company and the parent company’s subsidiaries, including the plaintiff. The WRO was based on suspected forced labor in certain of the parent company’s silica product supply chains but not in the actual plaintiff’s supply chain. The plaintiff sought modification on this basis, but CBP denied the modification and held that exempting certain individual supply chains from the WRO would undermine the general principle upon which CBP bases its forced labor enforcement efforts, i.e., that companies subject to a WRO are to demonstrate full remediation of all forced labor indicators present at all of a company’s locations subject to the WRO. The CIT allowed the plaintiff’s challenge to the denial of modification to proceed to discovery. 2025 Ct. Intl. Trade LEXIS 52 (Ct. Intl. Trade Apr. 16, 2025).
Takeaway: CBP may hold companies accountable for forced labor within a parent’s or an affiliate’s supply chains and may not entertain an argument based on one particular subsidiary’s or one particular supply chain’s lack of forced labor.
In Adler v. Gruma Corp., the U.S. Court of Appeals for the Third Circuit reversed the district court’s order compelling arbitration under the Federal Arbitration Act (FAA). The Court held the FAA did not apply to the parties’ employment agreement because the plaintiffs were “transportation workers” engaged in interstate commerce under the FAA’s exemption in 9 U.S.C. § 1. Regarding the FAA exemption, the Court reasoned that the plaintiffs’ work of transporting the defendant’s goods across state lines as part of the last mile of an interstate supply chain qualified them as transportation workers engaged in interstate commerce under the FAA exemption even though they did not personally cross state lines. 135 F.4th 55 (3d Cir. Apr. 16, 2025).
Takeaway: Companies should take care to understand that transportation and logistics workers may well be exempt from the FAA even if they are involved only in the last mile and even if they do not personally cross state lines.
In District of Columbia v. Exxon Mobil Corp., the Superior Court of the District of Columbia largely denied the defendant’s motion to dismiss the District of Columbia’s greenwashing claims brought under the District of Columbia Consumer Protection Procedures Act, D.C. Code §§ 28-3901 et seq. The District of Columbia alleged that the defendant had portrayed itself as a leader in clean energy and climate responsibility, while internally acknowledging and concealing its contributions to fossil fuel emissions and climate harm. According to the District of Columbia, the defendant’s total messaging strategy (ads, PR, and websites) could collectively mislead reasonable consumers. Additionally, the Court noted that the defendant could be held responsible for statements made and knowledge held by trade organizations with which the defendant was heavily involved and invested. 2025 D.C. Super. LEXIS 14 (D.C. Super. Ct. Apr. 21, 2025).
Takeaway: This case is one of the most high-profile examples of greenwashing litigation to proceed in a U.S. court to date. If successful, it could set precedent for holding corporations legally accountable for deceptive environmental marketing — a major development in climate accountability and consumer protection. Companies will want to monitor this litigation and may want to adjust their marketing relating to the environment and sustainability.
In Republic Technologies, NA LLC v. BBK Tobacco & Foods, LLP, the U.S. Court of Appeals for the Seventh Circuit held that the district court did not abuse its discretion in how it responded to the jury’s question about the definition of “consumer” under the Lanham Act. The district court simply referred the jury back to its original instructions, which included language implying that the defendant’s “audience” could include intermediaries along the supply chain. The Court also noted that there is no clear answer to whether the audience actually does include such intermediaries under the Lanham Act. 135 F.4th 572 (7th Cir. Apr. 25, 2025).
Takeaway: Companies should be aware, at least in the Seventh Circuit, that whether an audience under the Lanham Act includes intermediaries along the supply chain is unsettled.
In Ronnie Malatesta Sales, LLC v. Hey Dude, Inc., the U.S. District Court for the Northern District of Mississippi largely denied the defendant’s motion for summary judgment on claims that the defendant breached its sales contract with its sales agent by diverting product to a new priority customer. The defendant had claimed that supply chain shortages due to COVID-19 caused it to have insufficient inventory to meet its obligations; however, the plaintiff claimed that this was mere pretext to serve a new, higher-paying customer. The Court held that a reasonable jury could find that the defendant had breached the contract or the implied duty of good faith and fair dealing. Ronnie Malatesta Sales, LLC v. Hey Dude, Inc., ___F Supp 3d___; 2025 U.S. Dist. LEXIS 82049 (N.D. Miss., Apr. 30, 2025).
Takeaway: While not a force majeure or fair and reasonable allocation case per se, companies looking to rely on supply chain shortages to excuse performance under a contract should take care to document the shortage and follow force majeure and fair and reasonable allocation protocols to avoid the question of pretext and consider the implied duty of good faith and fair dealing in making allocations decisions.
In In re Lucid Group, Inc. Securities Litigation, the U.S. District Court for the Northern District of California partially granted the defendant’s motion to dismiss the plaintiff’s securities fraud claims. The defendant, an electric vehicle manufacturer, made various statements in 2021 and 2022 about its production targets and reasons for production delays. The defendant initially projected production of 20,000 vehicles in 2022 but later revised this target downward to 12,000-14,000 vehicles, citing supply chain issues and logistics challenges as reasons for the production delays and revised targets. Former employees alleged that internal logistics problems rather than external supply chain issues were the primary cause of production delays. The court allowed four alleged false statements pertaining to supply chain issues to proceed to discovery. ___F Supp 3d___; 2025 U.S. Dist. LEXIS 98203 (N.D. Cal., May 22, 2025).
Takeaway: Companies should take care to thoroughly vet all public statements, whether made on earnings calls or in SEC filings, to ensure the company’s supply chain is discussed as accurately as possible, and they should take care to understand that vague statements about supply chain difficulties are susceptible to challenge.
In Sweet Additions Ingredient Processors, LLC v. Meelunie Am., Inc., the U.S. Court of Appeals for the Eleventh Circuit vacated the district court’s judgment in favor of the defendant and remanded the case for further proceedings consistent with its interpretation of a limitation of liability clause in a supply contract. The Court engaged in dépeçage – applying the laws of different jurisdictions to different issues within the same case – and applied Florida contract law on incorporation of collateral documents and the Michigan Uniform Commercial Code (UCC) on remedies for breach of sales contracts. The Court held that the supply contract incorporated the defendant’s general terms and conditions because it specifically referred to them and provided instructions on how to obtain them. The Court further held that the limitation of liability clause did not bar recovery of lost profits and cover costs because they were direct damages based on the clause’s structure distinguishing direct damages from consequential/incidental damages, canons of interpretation treating the listed examples as non-exhaustive, and the purpose of preserving the benefit of the bargain in fixed-price contracts. 139 F.4th 1217 (11th Cir. Jun. 2, 2025).
Takeaway: Courts may apply the laws of two (or more) jurisdictions when interpreting the same supply contract, so companies should take that into account when drafting them. If applying the law of a specific jurisdiction is important, the contract should be explicit on that issue. The case also illustrates that the cost of finding alternative suppliers may constitute direct damages under the UCC unless that circumstance is specifically excluded in a limitation of liability clause.
In City of Southfield Fire v. Hayward Holdings, Inc., the U.S. District Court for the District of New Jersey partially denied the defendants’ motion to dismiss the plaintiff’s securities fraud claims. The complaint alleged that the defendants’ distributors placed double orders during COVID-19 to hedge against supply chain disruptions, leading to inflated channel inventories. Allegedly, as supply chain logistics eased, demand collapsed, causing distributors to be overstocked and forced to cancel orders. The plaintiff alleged that the defendants continued production, building over $100 million in unsold inventory, and despite these channel issues, publicly misrepresented demand and downplayed inventory backlogs during earnings calls and in investor materials. The Court held that the plaintiff plausibly alleged the defendants had made materially misleading statements about supply chain dynamics, including channel inventory health, demand levels, and backlogs. 2025 U.S. Dist. LEXIS 106346 (D.N.J. Jun. 4, 2025).
Takeaway: This case centers on the alleged manipulation and misrepresentation of supply chain realities — specifically, distributor inventory dynamics — as a basis for securities fraud. The defendants’ public statements allegedly failed to align with the actual supply chain overstock, inventory saturation, and depressed channel demand. Again, companies should take care to maintain supply chain oversight, and all public statements regarding channel inventory should be vetted for accuracy.
In Ass’n for Accessible Medicines v. Ellison, the U.S. Court of Appeals for the Eighth Circuit affirmed a district court ruling blocking enforcement of Minnesota’s so-called drug price‑gouging law, Minn. Stat. § 62J.842, against out‑of‑state manufacturers using out‑of‑state wholesalers. The Court held that the law violated the Dormant Commerce Clause. The Minnesota law caps “excessive price increases” by manufacturers on generic or off‑patent drugs sold in Minnesota. Though it regulates only manufacturers, it hinges on drugs being distributed and dispensed within the state. Manufacturers and even national wholesalers must be licensed in Minnesota to participate in the supply chain. On appeal, the Eighth Circuit affirmed, agreeing that applying the price‑cap law to out‑of‑state manufacturers using Minnesota‑licensed wholesalers impermissibly burdens interstate commerce, thereby violating the Dormant Commerce Clause. 2025 U.S. App. LEXIS 14434 (8th Cir. Jun. 12, 2025).
Takeaway: This case spotlights how state-level regulation, even when purporting to target manufacturers selling into a state, can reach deeply into supply chains when products or components flow into the state. This represents a growing trend, at least in some states such as Minnesota, of state governments attempting to regulate interstate supply chains, not always successfully.
In Shnayder v. Allbirds, Inc., the U.S. District Court for the Northern District of California dismissed the plaintiffs’ securities fraud claims without prejudice for lack of statutory standing and for failure to plausibly plead scienter (state of mind). The plaintiffs’ alleged false claims included boasting about the company’s unique, better-than-the-competition’s supply chain as well as statements about efforts to streamline and automate the supply chain. 2025 U.S. Dist. LEXIS 118998 (N.D. Cal. Jun. 23, 2025).
Takeaway: Even though this case was dismissed, it highlights the continuing trend of securities fraud claims being brought based on statements made about supply chain quality and characteristics. Companies should ensure that all supply chain-related statements are accurate and truthful.
In Barnes v. United States, the CIT dismissed the plaintiff’s complaint seeking to challenge President Donald Trump’s International Emergency Economic Powers Act (IEEPA) tariffs without prejudice for lack of both constitutional and jurisprudential standing. The Court held that under 28 U.S.C. § 1581(i), it has exclusive jurisdiction over constitutional challenges to tariffs imposed for nonrevenue purposes (e.g., national security or drug control); however, the Court also found that the plaintiff failed to allege any individualized harm beyond generalized consumer impact. 2025 Ct. Intl. Trade LEXIS 65 (Ct. Intl. Trade, May 23, 2025).
In V.O.S. Selections, Inc. v. United States, the CIT struck down both the Trump administration’s “Liberation Day” and drug‑response tariffs, ruling they exceeded executive authority under the IEEPA and the Trading With the Enemy Act (TWEA) and under the nondelegation doctrine, and they failed the major questions test. Five small importers, including V.O.S., and 12 states filed this suit in April. The Court denied a preliminary injunction but later granted summary judgment. On May 28, a unanimous three‑judge panel ruled in the plaintiffs’ favor and permanently enjoined all challenged tariff orders (Executive Orders 14193-14195 and Executive Order 14257). The government promptly appealed and obtained a temporary stay pending appeal to the U.S. Court of Appeals for the Federal Circuit. The Court held that the IEEPA and the TWEA do not grant authority to impose broad-based import tariffs and that the president lacks an intelligible principle for tariff issuance under the IEEPA. The Court further held that delegating such sweeping tariff power absent clear congressional authorization violates separation of powers principles and emphasized that setting global tariffs affects “major questions” requiring explicit statutory authority. Finally, the Court retained jurisdiction over constitutional challenges to tariffs, confirming it is the proper forum. 2025 Ct. Intl. Trade LEXIS 67 (Ct. Intl. Trade, May 28, 2025).
In Learning Resources, Inc. v. Trump, the United States District Court for the District of Columbia denied the government’s motion to transfer the case to the CIT and granted a preliminary injunction halting the specified tariff order. The Court held that the IEEPA does not explicitly grant tariff authority; thus, the Court declined to send the case to the CIT under § 1581(i). The Court further held that the IEEPA’s delegation does not include tariffs, i.e., they are beyond the statute’s scope and not among the “any property” regulation powers. Finally, the Court held, even if construed to authorize tariffs, the statute provides no intelligible principle guiding tariff setting, raising serious nondelegation concerns and violating the Administrative Procedures Act. The district court stayed its injunction pending appeal to the D.C. Circuit. ___F Supp 3d___; 2025 U.S. Dist. LEXIS 103492 (D.D.C., May 29, 2025).
In California v. Trump, the United States District Court for the Northern District of California dismissed the state of California’s suit seeking injunctive and declaratory relief that the IEEPA does not authorize the Trump administration’s tariff measures and that their imposition violates separation of powers principles of the U.S. Constitution. The Court held that pursuant to § 1581(i), the action falls within the CIT’s exclusive jurisdiction, leaving the district court without jurisdiction. The Court dismissed the suit without prejudice and the case is now on appeal to the Ninth Circuit. 2025 U.S. Dist. LEXIS 104548 (N.D. Cal. Jun. 2, 2025). Note: The legal challenges to the Trump administration’s various tariff measures are varied but can be boiled down to which courts have jurisdiction — federal district courts, the CIT, or both — and whether the IEEPA or the TWEA permissibly gives the president the authority to force the tariffs that have been imposed. This is a fluid situation to be monitored into the third quarter and beyond.
On April 24, the Trump administration issued the “Unleashing America’s Offshore Critical Minerals and Resources” executive order. [https://www.whitehouse.gov/] The order, which aims “to restore American dominance in offshore critical minerals and resources,” directs U.S. officials to prioritize research and planning for the possibility of deep-seabed mining “both within and beyond national jurisdiction.” By increasing seabed mineral development, the United States seeks to establish secure supply chains. [https://www.whitehouse.gov/]
On June 6, the Trump administration issued its “Sustaining Select Efforts to Strengthen the Nation’s Cybersecurity” executive order. This order amends prior administrations’ executive orders regarding cybersecurity. In particular, this order removed or scaled back some directives in the Biden administration’s “Strengthening and Promoting Innovation in the Nation’s Cybersecurity” executive order from January. However, the focus of the Biden-era order “Operationalizing Transparency and Security in Third-Party Software Supply Chains” remained, with executive departments and agencies receiving new deadlines for action. [https://www.whitehouse.gov/]
The Electric Supply Chain Act, H.R. 3638, was introduced in the House of Representatives on May 29. It has been referred to and is under consideration by the Committee on Energy and Commerce. If enacted, the bill would require the secretary of Energy to periodically assess the energy supply chain and prepare reports on information such as opportunities, risks, trends, and barriers, with recommendations for how to address each. Such reports are to be submitted by the secretary to both the House Committee on Energy and Commerce and the Senate Committee on Energy and Natural Resources. [https://www.congress.gov/]
The Supply Chain Security and Growth Act of 2025, H.R. 1328, has been referred to the House Committee on Ways and Means. The bill aims to encourage “qualifying taxpayer” companies to place critical supply chain facilities in U.S. possessions by providing a critical supply chain reshoring investment credit. Such credit would be equal to 40% of the qualified investment from that taxable year in facilities located in Puerto Rico, the U.S. Virgin Islands, Guam, the Commonwealth of the Northern Mariana Islands, or American Samoa. [https://www.congress.gov/]
March 31, 2025, following review by the Senate Committee on Commerce, Science, and Transportation, the Strengthening Support for American Manufacturing Act was placed on the Senate Legislative Calendar under General Orders. If enacted, the Secretary of Commerce would be required to provide recommendations “to improve the effectiveness, efficiency, and impact” of current programs through the Department of Commerce designed to improve supply chain resilience. [https://www.congress.gov] This bill aims to bolster critical supply chains and provide U.S. manufacturers with technical assistance. [https://www.cbo.gov]
After passing the House in March, the Farm Workforce Modernization Act, H.R. 1603, has been received in the Senate and referred to the Committee on the Judiciary. Under H.R. 1603, the H-2A visa program would be reformed and certified agricultural worker (CAW) status would be established. An individual with CAW status granted by the Department of Homeland Security retains such status for at least 5 1/2 years. The bill further authorizes the Department of Agriculture to provide funding for new farmworker housing. [https://www.congress.gov/]
The Senate passed the bipartisan Securing Semiconductor Supply Chains Act, S. 97, by unanimous consent on May 20. This bill would require the Department of Commerce to “coordinate with State-level economic development organizations to increase foreign direct investment in semiconductor-related manufacturing and production.” This coordination would entail the Department of Commerce soliciting comments from state-level economic development organizations regarding current challenges faced in attracting foreign direct investment and recommendations for the federal government to strengthen these organizations. [https://www.congress.gov/]
The One Big Beautiful Bill Act was signed into law on July 4 after narrowly passing both chambers of Congress. In effect, the bill will have many supply chain implications, primarily within the renewable energy sector, as it significantly alters provisions of the Inflation Reduction Act of 2022 providing renewable energy tax credits. Any applicable critical mineral other than metallurgical coal produced after December 31, 2030, will be subject to a phase-out of tax credits. Applicable critical minerals produced during calendar year 2031 will begin with a phase-out of 75%. The phase-out percentage for applicable critical minerals other than metallurgical coal drops by 25% each following year, with a complete phase-out by 2034. Metallurgical coal tax credits will be eliminated by 2030. Tax credits will also be eliminated for any wind energy components sold after December 31, 2027. [https://www.govtrack.us/]
On June 26, the Senate passed the Promoting Resilient Supply Chains Act, S. 257, and the bill will now head to the House for review. [https://www.congress.gov/bill/] The bill is likely to pass the House, as the House already passed its companion bill, H.R. 2444, on April 28. [https://www.congress.gov/bill/] Both bills require “the Industry and Analysis Office of the International Trade Administration of the Department of Commerce to monitor and respond to disruptions in critical industries and supply chains.” The Industry and Analysis Office would be required to establish a Supply Chain Resilience Working Group through which it can assess “critical” supply chains and identify vulnerabilities. Once the bill is enacted, the assistant secretary will have 120 days to create the working group and one year to submit a report to Congress on its findings. [https://www.congress.gov/bill/]
On June 9, the House passed the American Cargo for American Ships Act. The bill has been received by the Senate and referred to the Committee on Commerce, Science, and Transportation. If enacted, the bill would amend the Cargo Preference Act of 1954 to require the Department of Transportation to transport “100% of equipment, materials, and commodities” that it finances and transports on ocean vessels to be transported on “privately owned commercial vessels of the United States.” [https://www.congress.gov/bill/] The current act requires only 50% of government cargo to be transported on U.S.-flagged commercial vessels. [https://uscode.house.gov/]
Following the United States’ initial imposition of tariffs on steel and aluminum from the EU in March, the European Commission immediately announced proposed countermeasures against the United States. [https://luxembourg.representation.ec.europa.eu/] On April 8, EU member states voted to adopt the European Commission’s proposed countermeasures. [https://ec.europa.eu/] However, on April 9, European Commission President Ursula von der Leyen announced that the EU would put the countermeasures on hold for 90 days in an attempt to encourage negotiations with the United States. [https://ec.europa.eu/] The deadline set for negotiations between the United States and the EU was July 9. If no agreement is reached, the EU could immediately face 50% tariffs on all goods. [https://www.theguardian.com/] When this deadline was quickly approaching, the EU seemed likely to accept the 10% baseline tariff on exports. [https://www.reuters.com/]
On June 23, EU member states endorsed the Council of the European Union’s proposal to significantly reduce sustainability and due diligence reporting requirements on companies. [https://www.consilium.europa.eu/] The council’s proposal increases the Corporate Sustainability Due Diligence Directive’s threshold from companies with 1,000 employees and €450 million in net turnover to companies with more than 5,000 employees and €1.5 billion in net turnover. In effect, this proposal could limit applicability to fewer than 1,000 European companies. It would further remove the original requirement for companies to conduct due diligence throughout their entire supply chain and instead limit this requirement to only direct suppliers. [https://www.politico.eu/] Due diligence requirements for batteries imported into the EU have also been delayed. [https://www.forbes.com/]Another development in the European Green Deal is the EU’s announcement that it would no longer enact the proposed law targeting corporate greenwashing. [https://www.politico.eu/]
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