Week Twenty-Six in Trade

On July 24, 2025 the European Commission voted to impose retaliatory tariffs of €93 billion on U.S. goods if a trade deal is not reached between the United States and European Union. The tariffs will be effective August 7, 2025. The tariffs include €21billion on goods such as poultry and alcohol and €72 billion on cars and planes. The tariffs are in response to United States’ threatened imposition of IEEPA Reciprocal tariffs of 30% on EU goods starting August 1, 2025. It is widely reported that the United States is considering a base tariff of 15% on EU imports as part of a deal. It is unclear of the EU would continue to impose the retaliatory tariffs if EU imports are taxed at this lower level or if Section 232 tariffs of 50% on steel continue to be imposed.

White House Releases Fact Sheet on the U.S.- Japan Trade Deal

On July 23, 2025 the White House published a Fact Sheet on a proposed trade and investment agreement with Japan.

As part of the agreement, imports from Japan will be subject to a baseline 15% tariff rate. On the other hand, Japan has committed to increase market access for U.S. goods on a host of products. For instance, Japan has agreed to increase imports of U.S. rice by 75%, with an expansion of import quotas and agreed to purchase $US 8 billion in U.S. goods, including corn, soybeans, fertilizer, bioethanol, and sustainable aviation fuel. Japan has committed to purchase U.S.-made commercial aircraft, including an agreement to buy 100 Boeing aircraft. The Fact Sheet states that Japan has agreed to lift “longstanding restrictions on U.S. cars and trucks” and recognize U.S. automotive standards.

Further, the Fact Sheet states that Japan will invest $US 550 billion directed by the United States to rebuild and expand core American industries in sectors such as energy, semiconductors, critical minerals, pharmaceuticals and commercial and defense shipbuilding. The United States is expected to retain 90% of the profits from all investments.

The White House and Indonesia reach a Framework Deal on Reciprocal Trade

On July 22, 2025 the Trump administration and the Indonesian government agreed to a Framework for Negotiating an Agreement on Reciprocal Trade. In exchange for an IEEPA Reciprocal tariff rate of 19% set to begin on August 1, 2025, Indonesia has agreed to purchase commitments and offered a host of tariff and non-tariff related concessions to the United States.

Indonesia has agreed to procure (i) Boeing aircraft currently valued at $US 3.2 billion, (ii) purchase agriculture products, including soybeans, soybeans meal, wheat, and cotton with an estimated total value of $US 4.5 billion and (iii) energy products, including liquefied petroleum gas, crude oil, and gasoline, with an estimated value of $US 15 billion.

According to the Joint Statement, “Indonesia will eliminate approximately 99% of tariff barriers for a full range of U.S. industrial and U.S. food and agricultural products exported to Indonesia.” It is unclear whether this means that Indonesian tariffs on a majority of U.S. origin goods will be eliminated altogether or significantly reduced. The countries have agreed to negotiate rules of origin to ensure that the benefits of the agreement are limited to the parties.

Indonesia has also agreed to address nontariff barriers on industrial and agricultural exports. These include accepting vehicles built to U.S. federal motor vehicle safety and emissions standards; accepting FDA certificates and prior marketing authorizations for medical devices and pharmaceuticals; exempting U.S. exports of cosmetics, medical devices, and other manufactured goods from certification and labeling requirements among others; exempting U.S. food and agricultural products from all import licensing regimes (including commodity balance requirements) and recognizing U.S. regulatory oversight (including listing of all U.S. meat, poultry, and dairy facilities) and accepting certificates issued by U.S. regulatory authorities. Further, Indonesia has committed to remove restriction on exports of critical minerals to the United States.

The country has also committed and address a number of other issues such as barriers to digital trade, protection and enforcement of labor rights, maintaining and enforcement of environmental laws and address global excess capacity in the steel sector by joining the Global Forum on Steel Excess Capacity.

As indicated above, the current agreement is a “Framework” and the United States and Indonesia are expected to continue negotiate and finalize a formal agreement in the coming weeks.

OFAC To Update Licensing Hotline With New Online Platform

On July 23, 2025, the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) issued a website announcement that it is transitioning its Licensing Hotline to a new online platform.  Since July 2024, OFAC has operated the Licensing Hotline as a callback-only system.  OFAC has indicated that the Licensing Hotline callback-only system will continue to operate for a short period, but the announcement states that “OFAC will fully transition its Licensing Hotline to the new online platform and retire its callback-only telephone system on August 29, 2025.”  The online Licensing Hotline platform is available at:

https://apps-treas.my.site.com/ofac/s/ofac-hotline

This follows a similar update that OFAC made in August of 2024 when it implemented an online platform for OFAC’s Compliance Hotline on August 2, 2024 before discontinuing the Compliance Hotline email address on August 16, 2024 and discontinuing the Compliance Hotline telephone line on December 31, 2024. 

New Statute Will Require BIS to Report Additional Licensing Information to Congress

On July 23, 2025, the U.S. Senate voted to enact H.R. 1316 (officially titled as the “Maintaining American Superiority by Improving Export Control Transparency Act”), which the House of Representatives had previously approved on May 5, 2025.  Once signed into law, H.R. 1316 will amend the Export Control Reform Act of 2018 in order to require the U.S. Commerce Department’s Bureau of Industry and Security (“BIS”) to provide the House Committee on Foreign Affairs and the Senate Committee on Banking, Housing and Urban Affairs with an annual report detailing:

• Certain information for each license application or other request for authorization received by BIS involving export, reexport, release or in-country of export-controlled items to “covered entities”, which consist of: (i) end-users in countries listed in Country Group D:5 under the U.S. Export Administration Regulations (“EAR”), (ii) end-users listed on the EAR’s Entity List, and (iii) end-users listed on the EAR’s Military End-User (MEU) List;
• The date, location and result of any end-use checks conducted by BIS with “covered entities” to ensure compliance with United States export controls; and
• Aggregated statistics on the license applications and other authorization requests described in the first bullet point.

The report that BIS submits to the Congressional committees under the first bullet point for license applications involving “covered entities” must include the name of the license applicant, a brief description of the items (including their ECCN numbers and reasons for control), the name of the end-user, the end-user’s location, a value estimate, BIS’s decision on the application and the date of submission. BIS’s reports described in the first and second bullet-points will be provided to the Congressional committees confidentially, whereas the report described in the third bullet point will presumably be published for public review. 

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