According to Morgan Lewis, 2025 saw unusually rapid US trade policy shifts — driven by executive action, tariff expansion, and national security imperatives — reshaping global supply chain planning, compliance, and risk management. Tariff increases for China exceeded expectations in scale and scope, while export controls broadened to cover semiconductor and AI supply chains. The Affiliates Rule expansion of the Entity List is suspended for one year under a bilateral agreement with China, but firms must prepare for stricter documentation and due diligence. Persistent supply chain disruption, tariff-driven cost pressure, and fragmented ESG/DEI requirements compound operational complexity for multinationals.
According to www.morganlewis.com, US international trade and investment policy underwent unusually rapid shifts in 2025 — driven largely by executive action, national security priorities, tariff expansion, and intensifying supply chain pressures — requiring global businesses to fundamentally rethink cross-border trade structures, compliance frameworks, and operational planning.
Trade and Investment Policy: A Transactional, Mercantilist Turn
The US administration entered this term with more focused preparation and a broader agenda than in 2017, adopting an assertive, transactional approach centered on economic nationalism and hard-power trade tools over multilateral diplomacy. Tariffs served as the primary instrument of this new posture, with increases — particularly for China — exceeding market expectations in both scale and scope. Though some tariff implementations were postponed or accompanied by exemptions that muted overall impact, companies across sectors faced significant challenges in sourcing strategy, pricing models, and investment decisions.
Governance by executive order and emergency authorities has intensified legal and operational uncertainty. As the source states, this reliance reflects ‘a broad view of presidential authority and a willingness to test the limits of that authority through litigation up to the Supreme Court, if necessary.’ With an accommodative majority in Congress, legislative oversight has diminished — complicating long-term commercial planning.
Operational Impacts on Multinational Corporations
- Persistent supply chain disruption due to global conflicts, dynamic tariff imposition, and expanded export controls — affecting sourcing, transportation flows, logistics planning, and long-term manufacturing footprints
- Tariff-driven cost pressure, with uneven exemption pathways increasing cost volatility and slowing decision-making
- A fragmented ESG and DEI legal environment, producing overlapping and sometimes contradictory obligations across jurisdictions — especially in disclosures, sustainability strategy, and climate transition planning
- Immigration-related workforce challenges stemming from tightened visa controls, reduced student access, and heightened enforcement
- Sector-specific effects: deregulation and policy support for oil, gas, coal, artificial intelligence, and digital assets contrast with growing pressure on renewable energy, life sciences, and automotive/retail supply chains
Legal and compliance teams now operate in an environment where policy shifts can materially alter contract rights, pricing models, investment strategies, and disclosure requirements. Organizations are increasingly renegotiating supply contracts to account for cost volatility and tariff exposure. Risk management now requires deeper integration of trade policy forecasting with commercial planning and capital allocation models, alongside greater emphasis on scenario analysis, contract flexibility, and proactive stakeholder communication.
Export Controls and Sanctions: Broader Jurisdiction, Higher Stakes
Export controls are increasingly deployed as an economic policy tool beyond traditional national security functions. According to the report, recent developments include (1) expanded controls targeting semiconductors, AI, and other sensitive technologies — particularly within China-related supply chains; and (2) broadening of the Entity List to include affiliates of listed entities. Although implementation of the Affiliates Rule is suspended for one year under a bilateral economic agreement with China, companies are advised to use this period to prepare for expanded compliance requirements and documentation expectations once the suspension ends.
The source states that US enforcement priorities in 2025 reflect heightened focus on trade and customs fraud, sanctions violations, drug cartel-related activity, and countering China — all shaping new due diligence expectations, especially in higher-risk markets and regions.
Source: www.morganlewis.com
Compiled from international media by the SCI.AI editorial team.
