5 May 2025
- The expanding use of Section 232 national security-related additional tariffs under the America First Trade Policy
- Simplified rules and greater market access: How the upgraded ASEAN-Australia-New Zealand Free Trade Area (AANZFTA) could reshape trade
- The EU introduces stricter requirements for plastic food contact materials to promote food safety and environmental protection
- Recently adopted EU legislation
The expanding use of Section 232 national security-related additional tariffs under the America First Trade Policy
By Stella Nalwoga, Tobias Dolle, and Paolo R. Vergano
On 29 April 2025, US President Donald J. Trump marked the first 100 days of his second Presidential term. Within that period, the US Administration has adopted a range of trade measures affecting imports from a multitude of trading partners, including country-specific additional tariffs, and has launched six separate national security-related investigations into the importation of certain products. Previous investigations resulted in additional tariffs on steel and aluminium, as well as on automobiles and automobile parts. These investigations and resulting tariffs are based on Section 232 of the US Trade Expansion Act of 1962 and now appear to form a central part of the current US Administration’s America First Trade Policy.
This article explains the relevant Section 232 procedures, highlights key elements of past investigations, provides an overview of ongoing investigations, and evaluates their legal and commercial impacts.
The procedure under Section 232
Section 232 of the US Trade Expansion Act of 1962 allows the President of the US to impose trade restrictions, such as tariffs, based on an investigation and affirmative determination by the US Department of Commerce that certain imports threaten to impair US national security. Notably, the term ‘national security’ is not defined in the Statute. The procedures and applicable timelines for adopting measures under Section 232 are provided for under § 1862(b)(1)(A) to (3)(A) of the Trade Expansion Act and under Part 705 of the US Federal Regulations Title 15 – Commerce and Foreign Trade on Effect of imported articles on the National Security (15 CFR 705), which were adopted on the basis of Section 232. The table below provides a summary of the timeline and procedures that may lead to the adoption of so-called ‘Section 232 tariffs’:
| Required Action | Timeline |
| Initiate Investigation (§ 1862(b)(1)(A)) | Upon request/application or self-initiated by the US Department of Commerce. |
| Notify Secretary of Defense (§ 1862(b)(1)(A)) | Immediately upon initiation |
| Consultation and public participation (§ 1862(b)(2)(A) | Mandatory consultation with the US Secretary of Defense, as well as appropriate officers of the US, and public consultation if deemed appropriate. Notice to indicate period within which comments must be submitted and/ or when the public hearing would be held. |
| Report on the findings and recommendations to the US President (§ 1862(b)(3)(A) and (B)) | 270 days after initiating the investigation |
| US President’s decision (§ 1862(c)(1)(A)) | Within 90 days of receiving report |
| Implementation of the President’s decision (§ 1862(c)(1)(B)) | Within 15 days of his decision. |
| Report to Congress (§ 1862(c)(2)) | The submission by the President of a report to the US Congress within 30 days of his decision, explaining his action or inaction. |
Understanding the timeline and procedure for adopting measures under Section 232 of the US’ Trade Expansion Act is crucial, especially in light of the ongoing investigations. Additionally, the Trade Expansion Act does not impose a time limit on Section 232 measures. These measures can only be removed or modified by the US President, as confirmed by the US Court of International Trade, a US Federal Court that adjudicates civil actions arising out of US Customs and international trade laws.
The previous and ongoing Section 232 investigations
Previously, back in 2018, US President Trump had introduced a 25% import tariff on steel and a 10% import tariff on aluminium, which were based on investigations under Section 232 of the US Trade Expansion Act 1962 (see Trade Perspectives, Issue No. 5 of 9 March 2018). Relying on the same investigation and follow-up monitoring by the US Department of Commerce, in March 2025, the US imposed an additional tariff of 25% on both steel and aluminium imports into the US. President Trump stated that, despite the agreements that had been reached between the US and key trading partners, imports of steel were still “preventing the domestic steel industry from achieving sustained production capacity utilization of at least 80 percent, as determined necessary in the Secretary’s report of January 11, 2018”.
Additionally, on the basis of a Section 232 investigation into imports of automobiles and automobile parts conducted in 2019, as well as subsequent monitoring of imports into the US by the US Department of Commerce, President Trump imposed an additional tariff of 25% on automobiles and automobile parts, which took effect on 3 April and 3 May 2025, respectively. Following intense advocacy by the US automotive industry, on 29 April 2025, President Trump signed a Proclamation introducing a temporary offset mechanism allowing US manufacturers of automobiles to apply for partial import tax relief for vehicles assembled in the US.
Importantly, the US Administration has launched a number of further Section 232 investigations with respect to the following products: copper; timber and lumber; trucks; pharmaceuticals and pharmaceutical ingredients; processed critical minerals and derivative products; as well as semiconductors and semiconductor manufacturing equipment. President Trump reaffirmed the prioritisation of these sectors under the America First Trade Policy, emphasising their strategic importance to national security and the need to reduce reliance on foreign supply chains by incentivising reshoring of manufacturing to the US. Currently, public consultations are still ongoing regarding the investigations into semiconductors, pharmaceuticals, trucks, and critical minerals.
The legal complexities of ‘Section 232 tariffs’
Tariffs imposed pursuant to Section 232 of the US Trade Expansion Act have already been challenged in US Courts and before the World Trade Organization (hereinafter, WTO). In the US, there have been various legal challenges related to the procedure of adopting Section 232 measures, to the delegation of powers of the US Congress, and to the constitutionality of actions taken under Section 232. These challenges have so far not succeeded in invalidating any Section 232 action. The US Court of International Trade considers that the US President has broad discretionary authority to act on national security concerns related to imports. This is attributed to the wording of Section 232 of the US Trade Expansion Act of 1962, which allowsthe US President to “adjust” the imports of goods or materials from other countries “so that such imports will not threaten to impair the national security” of the US.
At the WTO level, mostly recently in 2022, a WTO Panel in the dispute United States – Certain Measures on Steel and Aluminium Products (DS544), found that the additional tariffs imposed in 2018 on steel and aluminium imports into the US, introduced on the basis of Section 232, violated WTO rules and were not justified under the national security exception of Article XXI of the General Agreement on Tariffs and Trade (GATT). However, the US Administration under former President Joseph Biden rejected the ruling on the grounds that issues of national security inherently fell within the sovereign discretion of each WTO Member and were not subject to review by the WTO Dispute Settlement Body.
Growing market disruptions
As the US Administration expands its reliance on Section 232 as a trade policy tool, the amount of affected sectors and products keeps growing, magnifying the economic impact on trading partners. With the Section 232 investigations currently underway and others likely to follow, US trading partners and businesses must brace for continued volatility and should proactively engage.
It is imperative that businesses monitor notices in the US Federal Register and participate through various means, such as written submissions, public-hearings, and post-tariff relief petitions to advocate for exclusions or temporary waivers, as it has been successfully done by the US automobile industry. Most significantly, strategic and evidence-based engagement could shape the outcomes of the investigations and could lead to more tailored relief or exemptions. In this context, it is crucial to seek expert assistance early in the process to navigate the legal and procedural complexities, maximise the effectiveness of the inputs, and protect the commercial interests involved.
For any additional information or legal advice on this matter, please contact Paolo R. Vergano
Simplified rules and greater market access: How the upgraded ASEAN-Australia-New Zealand Free Trade Area (AANZFTA) could reshape trade
By Alya Mahira, Caitlynn Nadya, and Paolo R. Vergano
On 21 April 2025, the Second Protocol to amend theASEAN-Australia-New Zealand Free Trade Area (hereinafter, AANZFTA) officially entered into force. The amended rules currently apply between those Parties that have already ratified it, namely Australia, Brunei Darussalam, Lao PDR, Malaysia, New Zealand, and Singapore. The upgraded AANZFTA aims at fostering a more conducive business environment and at bringing the Agreement “in line with more recent trade policy thinking”.
The upgraded AANZFTA includes new commitments, such as those on supply chain resilience for essential goods, government procurement, and trade and sustainable development. The Parties also agreed on enhanced provisions on rules of origin and electronic commerce. This article analyses some of the key changes introduced by the upgraded AANZFTA and discusses its potential to strengthen inter-regional trade.
Key features of the upgraded AANZFTA: Aligned with modern trade agreements?
The AANZFTA, negotiated between 2005 and 2008, has been effective since 2010. It is the cornerstone of economic engagement between the Member States of the Association of Southeast Asian Nations (hereinafter, ASEAN), on one side, and Australia, and New Zealand, on the other side. Since the entry into force of the AANZFTA, tariffs were progressively reduced and, by now, have been eliminated for at least 90% of all tariff lines.
To address the evolving trade dynamics in the region, negotiations for a second upgrade of the AANZFTA were launched in 2019 and concluded in November 2022. The upgrade to the AANZFTA amends 13 of the existing chapters and introduces a number of new chapters, notably those on Trade and Sustainable Development; on Micro, Small, and Medium Enterprises; as well as on Government Procurement. It also strengthens the provision on rules of origin to enable more products to qualify for preferential tariffs, and aims at enhancing digital trade by updating the related rules.
Enhanced rules of origin through ‘full cumulation’
The upgrade to the AANZFTA significantly amends the provisions on ‘cumulation’. Cumulation refers to a rule whereby inputs originating in one party to a preferential trade agreement may be used in the production process in another party and still be considered as originating in the final product exported from the latter Party. Under the original AANZFTA, the rules of origin are based on the concept of ‘partial’cumulation, under which a product is only deemed originating when all stages of the manufacturing operation have been carried out in the AANZFTA Party where the final substantial transformation takes place.
The upgrade now introduces ‘full cumulation’ into the AANZFTA, allowing all production activities and inputs, such as costs of labour and materials, incurred in one AANZFTA Party to be combined with those from another Party when determining the origin of a final product, even if the processing in the first Party alone is not sufficient to confer originating status. Accordingly, if a good is produced using materials that have been transformed in multiple AANZFTA Parties, it can now still qualify for the tariff preferences under the AANZFTA if the final processing or working takes place in one of the AANZFTA Parties.
The full cumulation mechanism is expected to greatly facilitate trade by providing more products with the opportunity to qualify for preferential tariffs, create greater business opportunities, and foster enhanced collaboration among the AANZFTA Parties. To accommodate differing production capacities and protect domestic industries, the full cumulation mechanism includes an opt-out provision, allowing Parties to limit its application.
Pioneering trade and sustainability commitments in an agreement with ASEAN
The upgraded AANZFTA introduces a new dedicated Chapter on Trade and Sustainable Development (hereinafter TSD), the first such Chapter included in any Trade Agreement concluded by ASEAN. The TSD Chapter provides a framework for the AANZFTA Parties to enhance cooperation on issues related to sustainable development, such as environmental protection, climate change, the green and blue economy, as well as labour standards. However, the Chapter does not impose binding obligations on the Parties and matters arising from the Chapter are also excluded from the AANZFTA’s dispute settlement mechanism.
The commitments under this new Chapter are primarily intended to promote voluntary cooperation rather than to impose enforceable obligations, reflecting the varying capacities of the AANZFTA Parties in addressing sustainability-related challenges. With this approach, the AANZFTA contrasts with the TSD commitments contained in other recent FTAs, such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), to which Australia and New Zealand, as well as four of the ten ASEAN Member States (i.e., Brunei Darussalam, Malaysia, Singapore, and Viet Nam) are Parties, which requires Parties to uphold their environmental laws, prohibits any actions that would waive or weaken these laws to the detriment of environmental protection, and includes a dispute resolution mechanism to ensure the enforcement of these commitments.
The absence of binding commitments and related enforcement under the AANZFTA could potentially limit real policy change or progress on the various sustainability objectives. Nevertheless, the AANZFTA’s new TSD Chapter represents a significant step towards integrating sustainability into ASEAN’s trade framework by providing a valuable platform for dialogue and cooperation among AANZFTA Parties on trade and sustainable development.
New and updated provisions on Government Procurement and e-Commerce
The upgraded AANZFTA introduces a new dedicated Chapter on Government Procurement, which contains provisions that aim at making Government Procurement more transparent, fair, and open, as well as mechanisms for cooperation on Government Procurement practices. While a step forward, it should be noted that the new Chapter does not include any market access commitments, but merely requires each Party to publicly disclose its laws and procedures related to Government Procurement, and, where appropriate, to indicate where tender opportunities are published. This is intended to help businesses in the AANZFTA region to participate in Government tenders that are open to international bidding. The Parties are also encouraged to use electronic means to the greatest extent practicable and to incorporate environmental sustainability procurement policies, as appropriate.
The upgraded AANZFTA also introduces enhanced provisions into the Chapter on Electronic Commerce. Building on the Regional Comprehensive Partnership Agreement (RCEP), which gathers all ANZFTA Parties, as well as China, South Korea, and Japan, the Chapter contains rules that encourage the adoption of international standards supporting digital trade, promotes the interoperability across regimes, such as in the area of e-invoicing, and strengthens consumer protection, privacy, and transparency. These changes are intended to reduce transaction costs and processing delays, and to support more efficient cross-border flows. For traders, this should mean faster clearance times and reduced administrative burdens. Most notably, the Chapter is now also subject to the AANZFTA’s dispute settlement mechanism, albeit with transitional arrangements for least developed AANZFTA Parties.
Implications of the upgraded AANZFTA for inter-regional trade
The entry into force of the upgraded AANZFTA has been welcomed by Parties and stakeholders alike. Coming at a time when all AANZFTA Parties face pressure from the US’ country-specific ‘reciprocal’ tariffs, the upgrade offers a timely opportunity to deepen inter-regional trade, particularly through the amended commitments on rules of origin, e-commerce, and government procurement. The AANZFTA Parties must now properly implement and reflect the novelties in their respective domestic legal frameworks. Businesses should take advantage of the new rules and seek expert advice to navigate novelties, such as on rules of origin.
For any additional information or legal advice on this matter, please contact Paolo R. Vergano
The EU introduces stricter requirements for plastic food contact materials to promote food safety and environmental protection
By Amanda Carlota, Ignacio Carreño García, and Tobias Dolle
On 16 March 2025, Commission Regulation (EU) 2025/351 of 21 February 2025 as regards recycled plastic and other matters related to quality control and manufacturing of plastic materials and articles intended to come into contact with food entered into force. Regulation (EU) 2025/351 (hereinafter, the FCM Quality Regulation) introduces, inter alia, stricter purity standards for recycled materials, migration limits, and labelling requirements for plastic food contact materials and articles (hereinafter, FCMs).
The article provides an overview of the key changes introduced by the FCM Quality Regulation and then assesses the potential impact of these changes on businesses, particularly suppliers of raw materials, which must comply with the “high degree of purity” requirement. The article also briefly discusses how the FCM Quality Regulation fits within the broader context of the 2018 EU Strategy for Plastics in the Circular Economy.
The so-called “Quality Amendment” on plastic food contact materials
Before it is consumed, food typically comes into contact with many materials and articles during its production, processing, storage, preparation, and serving, Such materials and articles, referred to as food contact materials and articles (FCMs), include food packaging and containers, machinery to process food, as well as kitchen and tableware. Constituents of FCMs that migrate from these materials into the food may affect the chemical safety of the food and affect human health, as well as the quality of the food, its taste and smell, including its appearance. To ensure a high level of food safety, the EU has established a general legal framework and specific rules for certain types of FCMs, notably plastic.
The FCM Quality Regulation amends, with the so-called “Quality Amendment” regarding plastic FCMs, three regulations associated with FCMs, namely: 1) Regulation (EU) No 10/2011 on plastic materials and articles intended to come into contact with food; 2) Regulation (EU) 2023/2006 on good manufacturing practices for materials and articles intended to come into contact with food; and 3) Regulation (EU) 2022/1616 on recycled plastic materials and articles intended to come into contact with foods.
The FCM Quality Regulation clarifies the definition of an ‘additive’ as “a substance which is intentionally added to the plastic to achieve a physical or chemical effect during processing of the plastic or in the final material or article and it is intended to be present in the final material or article” and introduces the concepts of ‘reprocessing of plastic’ and of ‘unknown or variable composition’ (UVCB). The main changes in the FCM Quality Regulation are new purity standards and compliance measures, as well as stricter migration limits for plastic FCMs. All plastic FCMs placed on the market from 16 September 2026 onwards will have to comply with the new regulation.
Stricter purity criteria for additives and substances of unknown or variable composition
Under the new rules, additives and “substances of unknown or variable composition, complex reaction products or biological materials” (UVCB) will be subject to stricter purity criteria. According to the new Article 3a of Regulation (EU) No 10/2011, introduced by the FCM Quality Regulation, only substances that comply with high-purity requirements, ensuring minimal contamination and defined chemical identity, will be permitted.
This amendment is particularly significant for companies using natural or recycled materials, which often contain trace impurities. Additionally, “non-intentionally added substances” will be subject to a toxicological assessment ensuring no genotoxicity and no migration exceeding 0.05 mg/kg into food. If there is no toxicological assessment, a general risk assessment to ensure that migration does not exceed 0.00015 mg/kg will be required. Under the amended Article 8 of Regulation (EU) No 10/2011, substances used in the manufacture of plastic FCMs that may be present in the final plastic material, including those manufactured from waste, must be of a high degree of purity and must be of a technical quality suitable for the intended and foreseeable use of the FCMs.
Stricter migration limits and more rigorous compliance testing for plastic FCMs
The FCM Quality Regulation updates specific migration limits, aimed at ensuring that hazardous chemicals do not leach into food at harmful levels. Companies producing multi-layer plastic materials must conduct migration testing, particularly when using adhesives, coatings, or printing inks in food packaging. Under the amended Annex V to Regulation (EU) No 10/2011,manufacturers will have to provide migration test data at each stage of production. This will impact suppliers of polymer resins, additives, and coatings, who will be required to prove that their materials comply with safety thresholds before they reach the final product.
Stricter rules for recycled plastics and by-products
The FCM Quality Regulation also aims at enhancing traceability and decontamination requirements for recycled plastics used in food contact applications to prevent contamination in food-grade recycled materials. Recyclers will have to meet the purity criteria in Regulation (EU) 2022/1616, ensuring that contamination from previous uses is eliminated.
Additionally, under the amended Article 10 of Regulation (EU) No 10/2011, plastic manufacturing by-products, such as off-cuts and scraps, will only be allowed to be reprocessed if collected under strict Good Manufacturing Practices (GMPs), as outlined in Regulation (EC) No 2023/2006. This provision fits within the broader context of the EU Strategy for Plastics in the Circular Economy, which states that, “As regards the use of recycled plastics in food-contact applications (e.g. beverage bottles), the objective is to prioritise high food safety standards, while also providing a clear and reliable framework for investment and innovation in circular economy solutions”.
New labelling requirements for plastic FCMs intended for repeated use on the market
Since Directive (EU) 2019/904 on the reduction of the impact of certain plastic products on the environment discourages the use of single use plastic FCMs, due to their environmental impact, plastic FCMs are increasingly designed for repeated use. However, repeated use may lead to deterioration of the plastic material or article, leading to an increase in migration of constituents into food that may endanger human health.
The FCM Quality Regulation introduces a new Article 14a into Regulation (EU) No 10/2011, which details new labelling requirements for final plastic food contact articles intended for repeated use, namely: 1) Instructions for consumers on how to slow down the deterioration of the article; 2) A description of observable changes indicating deterioration; and 3) A warning about potential increased migration or misuse that could make the article unsuitable for food contact.
Substances with a biocidal function incorporated into FCMs
The FCM Quality Regulation introduces a novelty in the amended Article 6(5) of Regulation (EU) No 10/2011 regarding substances with a biocidal function. Substances with a biocidal function are substances “consisting of, containing or generating one or more active substances, with the intention of destroying, deterring, rendering harmless, preventing the action of, or otherwise exerting a controlling effect on, any harmful organism by any means other than mere physical or mechanical action”.
In FCMs, such substances currently require prior authorisation and the FCM Quality Regulation provides that biocidal substances used in accordance with Regulation (EU) No 528/2012 concerning the making available on the market and use of biocidal products, may now be used as additives in the manufacture of plastic FCMs without such prior authorisation from the European Commission. This applies specifically to “product-type 4” products under Annex V to Regulation (EU) No 528/2012, which provides for the incorporation of these substances into plastics that may come into contact with food.
Implications for manufacturers and the supply chain
In preparing for the new requirements, which will apply from 16 September 2026, food packaging producers, plastics manufacturers, and recyclers must: 1) Review raw materials and additives to ensure compliance with the new purity standards; 2) Adapt migration testing protocols and documentation to meet enhanced traceability and decontamination requirements; and 3) Upgrade recycling and reprocessing systems to align with stricter contamination limits.
Operators that place on the market a plastic FCM intended for repeated use must also ensure compliance with the new labelling requirements. The transitional period outlined in the FCM Quality Regulation allows plastic FCMs that comply with the previous version of Regulation (EU) No 10/2011, and which were first placed on the market before 16 September 2026, to continue being sold until stocks are exhausted.
For any additional information or legal advice on this matter, please contact Ignacio Carreño Garcia
Recently adopted EU legislation
Trade Remedies
Market Access
Food Law
Amanda Carlota, Ignacio Carreño García, Tobias Dolle, Alya Mahira, Caitlynn Nadya, Stella Nalwoga, and Paolo R. Vergano contributed to this issue.
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