Global Supply Chain Horizons – March 2026

In our latest update we highlight key areas of change that have happened over the last quarter. These include:

• Cross Border - EU: Trade agreement with Mercosur; EU: European Parliament committee approves key parts of the EU-US trade deal; UK-EU Sanitary and Phytosanitary (SPS) agreement; EU-UK Competition Cooperation Agreement signed; US-India Interim Trade Agreement; EU and India sign Free Trade Agreement;
• Asia – China: New trade secret protection regulation; China: Updated Implementing Regulations on Drug Administration Law; Singapore: IMDA launches new tools to accelerate digital sustainability; South Korea: AI Basic Act enacted and brought into force; China: Guiding opinions to accelerate zero‑carbon factory development
• Europe – EU: €330 million investment in fusion and fission development; EU: Industrial Accelerator Act proposed; EU cyber updates: New ICT Supply Chain Security Toolbox and consultation; EU: Major semiconductor pilot line launched; EU: Fitness check on EU energy and gas supply security
• Middle East - Kuwait: Practical AI governance framework announced; UAE ratifies ILO Forced Labor Protocol; UAE: Single-use plastic ban implemented
• UK – UK government introduces new Steel Strategy; UK: MHRA consults on indefinite recognition of CE marked devices; UK: CMA guidance on green claims and supply chains; UK: Software security ambassadors scheme;
• US – US: Proposed update to electric vehicle charger “Buy America” requirements; US: FDA launches PreCheck program to boost domestic drug manufacturing; US: Presidential order withdrawing from international agreements announced; US: Imports of foreign drones and components restricted

Cross-Border

EU trade agreement with Mercosur

On January 17, the European Union and the Mercosur bloc (Argentina, Brazil, Paraguay and Uruguay) formally signed the long‑negotiated trade agreement, marking the conclusion of over 25 years of negotiations. The signing took place in Asunción, Paraguay, and creates what EU officials describe as the world’s largest free trade area, covering roughly 700 million people.

The Mercosur agreement aims to establish the world’s largest free trade zone, seeking to phase out around 90% of tariffs across industrial, agricultural and services sectors, while applying special schedules for sensitive sectors. For example, the agreement maintains special timetables and safeguards for sensitive agricultural products, including clauses allowing the EU to reintroduce tariffs if imports surge beyond agreed thresholds. On market access, the deal expands opportunities in services, digital trade, public procurement and investment, enabling EU companies to participate in Mercosur public tenders on equal terms with domestic bidders.

The agreement also protects 344 Geographical Indications and strengthens supply‑chain access for critical raw materials, reducing EU reliance on third‑country suppliers.

On January 21, the European Parliament narrowly voted to refer the agreement to the European Court of Justice for legal review, suspending Parliament’s approval procedure.

On March 23, the EU notified Mercosur countries of the provisional application of the agreement from May 1, 2026. Large parts of the deal will take legal effect even though full ratification is still pending and the agreement is under review by the European Court of Justice. Provisional application allows the EU and Mercosur countries to unlock market access early, particularly in areas of exclusive EU competence, such as tariff reductions, customs facilitation, services, digital trade and public procurement.

Impact: For businesses, the provisional entry into force has immediate practical consequences. Companies can benefit from lower tariffs, improved access to Mercosur markets and public tenders, and more diversified supply chains, especially in sectors such as automotive, chemicals, agri food and green technologies. At the same time, provisional application entails a degree of legal uncertainty, as parts of the agreement could still be amended or suspended if ratification fails. Businesses should therefore take advantage of the new opportunities, while ensuring contractual safeguards, compliance readiness and flexibility in supply chain and pricing arrangements.

EU: European Parliament committee approves key parts of the EU-US trade deal

On March 19, the European Parliament’s International Trade Committee voted overwhelmingly in favor of tariff-related measures forming part of the wider EU-US trade deal. The “Turnberry Agreement” imposes a blanket 15% tariff on the majority of EU exports to the USA in return for a reduction of EU tariffs on US industrial, chemical, pharmaceutical and agricultural exports. The vote came after months of delay driven by new tariffs threats from the US that the MEPs thought violated the spirit of the deal. Approval will be required from the European Parliament as a whole and a plenary vote could take place as early as March 26. The deal includes safeguards, enabling the European Commission to step in if imports from the US surge by more than 10% year-on-year.

Impact: The approval of these tariff measures marks an important step towards securing the EU-US trade deal. It will promote greater predictability for EU exporters with regards US tariffs, and will also promote greater US to the EU thanks to trade-barrier reductions.

UK-EU Sanitary and Phytosanitary (SPS) agreement

On March 9, the UK Government urged businesses to start preparing for a new SPS agreement with the EU. The agreement was first unveiled at the UK-EU summit in May 2025. It aims to make the trading of food both cheaper and easier. This could strengthen food supply chains for exporters and importers.

The UK Government is aiming for a mid-2027 start date. It released details of legislation in scope with the EU alignment. It has also launched a Call for Information, which closes on April 23, 2026.

Impact: Businesses across the agri-food chain may want to take part in the UK Call for Information to ensure their opinions are considered. They may also want to review their supply chains in preparation for any final SPS deal.

EU-UK Competition Cooperation Agreement signed

On February 25, the EU and UK signed a new Competition Cooperation Agreement. The agreement establishes a clear framework for coordination between the European Commission, Member States competition authorities, and the UK Competition and Markets Authority.

It sets rules for notifying each other about major antitrust and merger cases and coordinating investigations where helpful. The deal also includes strong protections for confidential business information, requiring companies’ consent before sharing sensitive data.

It supplements the broader EU-UK Trade and Cooperation Agreement and will enter into force once both sides complete their ratification procedures.

Impact: The agreement provides businesses operating in both the EU and UK with a more predictable environment for cross‑border competition matters. It should support smoother handling of parallel antitrust and merger reviews and increased clarity on how authorities coordinate investigations and share information.

Businesses may consider the following actions:

• review ongoing or planned mergers that affect EU and UK markets to prepare for coordinated scrutiny
• assess internal processes, including supply chain operations, for responding to information requests
• check that confidentiality procedures are robust, particularly where sensitive information may be shared with regulators

US-Japan first phase of Strategic Investment Initiative

On February 17, the US Department of Commerce and Japan's Ministry of Finance announced details of three projects based on the Memorandum of Understanding on Strategic Investments announced in September 2025. They agreed on projects for industrial synthetic diamond manufacturing (approximate value $600 million), US crude oil export infrastructure (approximate value $2.1 billion), and gas-fired power for AI data centers (approximate value $33.3 billion). The initiative aims to strengthen economic security, diversify supply chains, and support growth in strategic sectors.

Impact: The joint projects could create more resilient supply chains and opportunities for businesses involved in critical minerals, energy, and data‑center infrastructure. Businesses may gain expanded supply opportunities providing specialized parts and equipment.

US-India Interim Trade Agreement

On February 6, the US and India jointly announced a framework for an Interim Agreement on trade. This supports ongoing negotiations for a broader Bilateral Trade Agreement started in February 2025. India plans to cut tariffs on many US industrial, food and agricultural goods. The United States will apply an 18 percent reciprocal tariff on selected Indian goods but will remove several tariffs once the agreement is concluded. Both countries intend to reduce non‑tariff barriers and align standards in priority sectors. They aim to strengthen supply chain security, expand technology trade, and cooperate on investment reviews and export controls. India said it would buy $500 billion in US goods over five years.

On February 9, the White House issued a fact sheet in support of the announcement.

Impact: Businesses across multiple sectors could expect improved access to both countries through tariff cuts and reduced non‑tariff barriers. Businesses could see expanded supply chain opportunities. Exporters could prepare for new tariff and standards rules.

Considering the US Supreme Court ruling on tariffs, the future and enforceability of this trade agreement could remain uncertain. See Eversheds Sutherland insight on this ruling.

UK-US partnership to boost critical minerals supply chain

On February 5, the UK and US signed a Memorandum of Understanding aimed at securing supplies of critical minerals. This agreement builds on the Critical Minerals Strategy announced last November and sets aside up to £50 million in funding to enhance domestic production and processing.

The partnership aims to strengthen the resilience and security of both countries' critical mineral supply chains, covering areas such as mining, separation, and processing. By joining forces, the UK and US intend to attract more private investment into sectors like mining and processing. This could benefit key industries including automotive, defense, and clean energy. Both governments plan to streamline their permit processes for critical minerals and rare earths (according to their respective laws). Additionally, they are committed to supporting recycling technologies and collaborating on managing scrap materials to diversify supply chains.

Impact: This partnership builds on similar agreements which the UK has with other countries (e.g. Australia and Canada) as it seeks to ensure no more than 60% of the UK’s supply of any one critical mineral is imported from any one country by 2035. This could help reduce supply chain risks for businesses which can be impacted by geopolitical tensions.

US-EU-Japan critical minerals partnership

On February 4, the US, EU, and Japan agreed to strengthen cooperation on critical minerals supply chains as part of the US convened 2026 Critical Minerals Ministerial. The aim is to increase economic and national security by improving supply chain resilience. The agreement intends to support projects in mining, refining, processing and recycling. It also plans the promotion of research, innovation and information sharing on stockpiling. Possible tools include coordinated standards, price floors, subsidies and offtake agreements.

The next step is to conclude a Memorandum of Understanding.

The US Administration also launched Project Vault, a strategic mineral stockpile backed by $12 billion in funding. It plans to include all 60 minerals on the 2025 US Geological Survey list, with a focus on rare earths, cobalt and copper. It aims to spur investment and diversify global supplies.

Impact: Businesses could benefit from more stable critical mineral pricing through coordinated price floors and reference prices. They may want to prepare for potential coordinated trade policies. They should anticipate initiatives to reduce supply chain disruptions and expand diversification. Further bilateral frameworks shaping trade conditions for minerals could be announced in 2026.

EU and Vietnam agree to a Comprehensive Strategic Partnership

On January 29, the EU and Vietnam agreed to upgrade their relationship to a Comprehensive Strategic Partnership. The Partnership reflects growing cooperation on trade, security, climate action and sustainable development. Both sides aim to strengthen political dialogue, deepen economic ties and support the full implementation of the Free Trade Agreement. They also plan to expand collaboration on energy transition, digital connectivity and supply chain resilience. The partnership supports progress on human rights, environmental protection and scientific research.

Impact: The upgraded partnership may offer European businesses improved access to a major Asian manufacturing hub and broader supply chain diversification opportunities.

Businesses:

• should monitor upcoming regulatory changes linked to green trade, digital standards and supply chain transparency

• can expect new investment and trade opportunities in energy, technology, transport, agriculture and sustainability

• may anticipate higher expectations on labor rights, environmental reporting obligations and stronger enforcement

EU and India sign Free Trade Agreement

On January 27, the EU and India concluded a landmark Free Trade Agreement (FTA). The deal removes major trade barriers, streamlines customs procedures, expands market access, and supports supply chain diversification.

The tariff schedules cover the vast majority of goods traded between the EU and India, with India liberalizing 96.6% of EU exports and the EU liberalizing 99.5% of its tariff lines.

Tariffs on EU machinery, electrical equipment, aircraft and spacecraft, chemicals, pharmaceuticals, motor vehicles, and iron and steel will be phased out over the next 5–10 years. The EU retains tariffs on some of its most sensitive products and opens calibrated quotas; a bilateral safeguard mechanism applies.

The agreement now awaits approval by the European Parliament and the Council. Once ratified by India, it can enter into force. Tariff cuts and regulatory changes will be phased in gradually over a period of up to ten years.

Impact: Tariff reductions are expected to benefit European businesses broadly. The cut in India’s motor vehicle tariffs (from 110% to 10%) should significantly expand market access for European manufacturers. The agreement is expected to create new opportunities for a wide range of businesses, including SMEs. However, specific SME-targeted measures have not yet been detailed publicly. The European Commission estimates €4 billion in annual duty savings and expects that EU exports to India will double by 2032.

To prepare, businesses should:

• review sector specific tariff reduction schedules

• identify products most affected by duty cuts

• reassess supply chains and logistics costs as market access conditions evolve

Asia

China: New trade secret protection regulation

On February 24, the State Administration for Market Regulation (SAMR) issued the Trade Secret Protection Regulations (Order No 126). Effective from June 1, 2026. The rules define trade secrets and set clear standards for confidentiality measures. They list unlawful methods of obtaining or using trade secrets. Market regulators gain expanded powers to investigate and penalize infringements. Penalties increase for severe or repeat violations. Acceptable actions outlined in the rules include independent research, reverse engineering, and disclosures for public interest. Rights holders may report suspected infringements and must provide preliminary evidence. Authorities must protect confidential information during investigations. These regulations aim to improve fairness, competition, and commercial innovation across industries.

Impact: Businesses should improve internal controls and adopt appropriate technical and managerial safeguards. They should ensure their supply chain operations incorporate trade secret safeguarding and do not expose them to any infringements of the regulation.

China: Updated Implementing Regulations on Drug Administration Law

On January 27, the State Council released regulations for implementing China's Drug Administration Law. This aims to encourage pharmaceutical innovation, tighten oversight of online medicine sales, and strengthen drug safety supervision. They outline requirements for research, clinical trials, production, distribution, and post‑market evaluation. The regulations strengthen responsibilities for Marketing Authorization Holders (MAHs) and set strict standards for quality control and traceability. They also reinforce data protection for new drugs and provide market exclusivity periods for rare‑disease and pediatric medicines. Overseas research data may be used if it meets Chinese standards. The rules expand risk‑control tools and clarify penalties for violations across the drug lifecycle.

The regulations will apply to domestic and overseas manufacturers selling products in China. They take effect from May 15, 2026.

Impact: Pharmaceutical manufacturers could benefit from new incentives, including up to seven years of market exclusivity for eligible orphan drugs and two years for new pediatric drugs. Foreign MAHs may want to strengthen their supply chain representation with robust quality and risk‑control systems.

Singapore: IMDA launches new tools to accelerate digital sustainability

On January 22, Singapore’s Infocomm Media Development Authority (IMDA) introduced new resources to help businesses adopt digital sustainability solutions. This includes a Digital Technologies for Sustainability Playbook, a Practical Green Software Guide, and Singapore‑specific ICT emission factors with a cloud‑carbon calculator. These tools aim to close knowledge gaps, improve operational efficiency, and simplify emissions tracking and reporting.

Impact: Businesses operating in or supplying Singapore should review their digital infrastructure. They should assess gaps in software efficiency, and integrate these tools into existing sustainability strategies and reporting processes. Sectors with large digital footprints such as financial services, technology, telecommunications, logistics and data center intensive industries may see the greatest impact, with opportunities to streamline operations.

South Korea: AI Basic Act enacted and brought into force

On January 22, South Korea enacted and fully brought into force the AI Basic Act. The Act establishes a national framework governing the development, deployment, and use of AI systems in South Korea.

The Act:

• establishes South Korea’s AI framework to support innovation and trust
• empowers the Ministry of Science and Information and Communication Technology to set national AI plans and oversee safety
• creates the National AI Committee to guide major policy decisions
• supports research and development, data policy, small and medium-sized enterprises, startups, and human‑capital development
• promotes ethical principles and international norms
• mandates transparency and safety duties, particularly for high‑impact AI systems that pose significant societal risks

Impact: Organizations working directly with AI or involved in the supply chain must adhere to the Act and its regulations. Particular attention should be paid to requirements on transparency and safety.

Eversheds Sutherland: South Korea: Enactment of AI law

China: Guiding opinions to accelerate zero‑carbon factory development

On January 14, the Ministry of Industry and Information Technology released Guiding Opinions to promote the construction of zero carbon factories across strategic industries. This includes electrical appliances, photovoltaics, batteries and machinery. The policy aims to drive energy efficiency, carbon reduction, and green transformation through phased implementation from 2026 to 2030. It sets principles for industry specific innovation, unified standards, and continuous improvement, while outlining a pathway covering carbon accounting, renewable energy use, process decarbonization, digital management, supply chain carbon reduction, and carbon offsetting.

Impact: The government sees green factories as a key component of its manufacturing policy, as outlined in its 15th Five-Year Plan for National Economic and Social Development. Manufacturers could take advantage of any opportunities and incentives to transition to greener supply chains processes where possible.

China: Lithium battery trade rules eased

On December 9, the Ministry of Industry and Information Technology announced a relaxation of import and export controls on some lithium thionyl chloride batteries starting January 1, 2026. The new rules apply to single batteries or packs containing no more than 1 kg of thionyl chloride, a chemical previously regulated under controlled substances laws. Larger batteries will still need approval under existing regulations.

Authorities stated that these products pose minimal risk due to low chemical content and difficulty of extraction. Under the updated policy, such batteries will no longer be classified as controlled chemicals or dual-use items. This eliminates the need for chemical control or dual-use licenses during customs declarations.

Impact: Exporters and importers should update their supply chain processes to reflect the removal of licensing requirements but maintain accurate chemical content declarations for customs. Lithium thionyl chloride batteries are widely used in scientific instruments, these businesses could benefit from any streamlined process.

Europe

EU: €330 million investment in fusion and fission development

On March 19, the European Commission adopted the Work Programme for the 2026 and 2027 Euratom Research and Training Programme. Under the Work Programme, €222 million will be invested in fusion research and development and €108 will be invested in nuclear fission, safety and radiation protection. The 2026-2027 Work Programme bolsters the EU’s nuclear technology through the establishment of a Public-Private Partnership (PPP) dedicated to fusion development as well as greater support for fusion startups and SMEs. Additionally, the 2026-2027 Work Programme will fund research into safety and innovation concerning nuclear technology.

The Euratom Research and Training establishes work programmes which span five years in accordance with the Euratom Treaty. The 2026-2027 Work Programme is part a broader push by the EU to promote EU energy independence, competitiveness, and carbon-neutrality by fostering research excellence and talents.

Impact: The 2026-2027 Work Programme will strengthen nuclear energy capacity and supply chains, thus reducing dependence on fuel imports from abroad and increasing overall competitiveness of energy-reliant industries. The focus on research will ensure nuclear safety improvements, allowing for further development of nuclear technology in the future.

EU: Industrial Accelerator Act proposed

On March 4, the European Commission proposed the Industrial Accelerator Act which is central to the EU’s Clean Industrial Deal. A key objective is to increase manufacturing’s share of EU GDP to 20% by 2035.

Main elements of the proposal include:

• ‘Made in EU’ and low-carbon requirements in public procurement and certain public support schemes. They initially target selected strategic sectors (steel, cement, aluminum, automotive and net zero technologies), with possible extension to others
• new conditions for large foreign direct investments (FDI) in sectors such as electric vehicles (EVs), batteries, solar and critical raw materials
• accelerated permitting and project coordination
• measures to strengthen supply chain resilience, including incentives to prioritize EU produced goods and components in strategic projects

The proposal complements the Automotive Package, defining ‘Made in EU’ rules for CO₂ standards flexibilities and EVs support.

Impact: The Act signals a stronger European push to expand manufacturing capacity and accelerate clean industrial transformation. It focuses on energy intensive, strategically important sectors facing global competition and risks of deindustrialization. The proposal has faced repeated delays due to diverging Member States positions. Further debate and changes during the legislative process are likely.

Impacts for businesses:

• new ‘Made in EU’ and low carbon rules may restrict eligibility and change supplier selection in key sectors
• large FDI in strategic sectors may face conditions on local value creation, technology transfer and employment, influencing M&A and joint ventures

Action points:

• review procurement and funding strategies against potential EU content and low-carbon requirements
• assess how planned investments, partnerships and transactions may face new investment conditions

EU: Anti-dumping duties on Korean and Taiwanese ABS imports

On February 13, the European Commission imposed definitive anti-dumping duties on acrylonitrile butadiene styrene (ABS) imports from the Republic of Korea and Taiwan. The duties follow an investigation that found these imports were sold in the EU at unfairly low prices. The Commission set duty rates of 5.2% to 7.5% for the Republic of Korea and 10.9% to 21.7% for Taiwan.

Provisional duties had already been in place since August 14, 2025.

Impact: ABS is a plastic used in cars, appliances, electronics, construction, and toys. Korean and Taiwanese suppliers held 31% of the EU market by late 2024. EU industry’s market share fell to 63%, down from 72% in 2020. The new duties are likely to increase the cost of the material imported and may trigger supply chain changes. EU businesses using ABS in manufacturing should review current contracts, and consider diversifying suppliers.

EU: Anti-dumping duties on Chinese valine imports

On February 13, the European Commission imposed definitive anti-dumping duties on valine imports from China. The duties range from 31.3% to 53.8%; they follow an investigation which found that imports of valine from China were entering the EU at dumped prices.

Impact: Valine is used in animal feed, food supplements and pharmaceutical products. The EU market is worth about €100 million, with Chinese imports accounting for roughly €80 million.

Businesses importing or using valine should review supply chains and assess potential cost increases resulting from the new duties.

EU cyber updates: New ICT Supply Chain Security Toolbox and consultation

On February 13, the European Commission launched an ICT Supply Chain Security Toolbox to help identify and mitigate cybersecurity risks in ICT supply chains. The Toolbox recommends assessing critical suppliers, adopting multi-vendor strategies, and reducing reliance on high-risk vendors. It aims to help Member States and other stakeholders enhance supply chain security, as outlined in the revised Cybersecurity Act of January 2026. Accompanying risk assessments for connected vehicles and detection equipment are also published and detail key cybersecurity threats, their potential impacts, and necessary mitigation steps.

Impact: The Toolbox provides non-binding guidance to strengthen ICT supply chain security under the NIS2 Directive. It may influence national cybersecurity strategies, oversight and procurement (especially in critical infrastructure), telecoms, transport and border systems.

The trusted ICT supply chain framework in the revised Cybersecurity Act may introduce harmonized requirements for critical supply chains. High-risk ICT environments may face increased scrutiny of supplier risk and dependencies.

EU: Commission unveils new counter-drone security plan

On February 11, the European Commission (EC) announced an EU‑wide Action Plan to address rising security threats from drones. The plan aims to improve preparedness, boost detection, coordinate responses and strengthen defense readiness across the EU.

Key elements include:

• a new Counter Drone Centre of Excellence (by Q1 2027) and testing facilities
• an EU Trusted Drone label (by Q4 2026) and updated drone safety rules
• guidance to protect critical infrastructure
• support for 5G based detection and a Drone Incident Platform
• joint procurement and cross border emergency response exercises

The plan complements existing defense initiatives and supports EU funding for drone and counter‑drone capabilities. A new Drone Security Package is expected by Q3 2026.

Impact: Businesses in defense, telecoms, security and infrastructure sectors should anticipate new regulatory requirements. These include future certification schemes, safety rules, and security labels that may affect their equipment and services. Critical infrastructure operators can expect updated EU guidance on detection, monitoring, and incident response. New procurement and funding opportunities arising from the plan may also benefit technology supply chains.

EU: Major semiconductor pilot line launched

On February 9, the EU opened NanoIC, Europe’s largest Chips Act pilot line. The facility received €700 million in EU funding within a €2.5 billion total investment.

NanoIC aims to speed up design and testing of next generation chips for AI, autonomous vehicles, healthcare and 6G. It is the first European site to use the most advanced Extreme Ultraviolet lithography for sub 2nm technologies. The pilot line will help bring technologies from research to near industrial scale and strengthen Europe’s semiconductor supply chain.

It forms part of five EU Chips Act pilot lines designed to increase Europe’s technological capability and resilience.

Impact: Businesses developing or relying on advanced chips should prepare for faster innovation cycles enabled by NanoIC. They could benefit from the facility’s open access model, which allows early testing of new chip designs, equipment and processes.

Businesses should:

• assess benefits for core sectors such as AI, automotive, telecoms and healthcare
• monitor forthcoming Chips Act 2.0, as changes may impact funding, supply‑chain obligations and incentives
• evaluate engagement with pilot lines

EU announces 20th Package of sanctions against Russia

On February 6, the European Commission proposed the 20th sanctions package against Russia, targeting energy, finance, and trade.

Key elements include:

• a full maritime services ban for Russian crude oil
• the sanctioning of 43 additional shadow vessels, bringing the total to 640
• tougher restrictions on LNG tankers, icebreakers, and tanker acquisition
• the sanctioning of 20 additional Russian regional banks
• new measures against cryptocurrencies and platforms enabling circumvention
• export bans on rubber, tractors, and cybersecurity services worth over €360 million
• export bans on metals, chemicals, and critical minerals worth over €570 million
• activation of the anti-circumvention tool

Impact: Businesses across energy, finance, shipping and logistics, technology, and raw materials should prepare for wider obligations due to new sectoral restrictions. Those dealing with metals, chemicals, tractors, cybersecurity services, or critical minerals should reassess exposure to new import and export bans.

Businesses should:

• review supply chains for newly-restricted goods or services and check whether any products fall under expanded export control lists
• strengthen due diligence checks for high risk jurisdictions to avoid involvement in circumvention practices
• update sanctions screening, assess banking and payments relationships, and monitor upcoming EU guidance to maintain compliance

EU: Parliament advances Critical Medicines Regulation to tackle supply shortages

On January 20, the European Parliament (EP) adopted its position on a proposed Critical Medicines Regulation designed to help address shortages of essential medicines such as antibiotics, insulin, vaccines and treatments for chronic diseases.

The EP’s position sets out priorities for future negotiations with EU governments on the final text of the law, advancing the initiative into the trilogue phase.

Key elements include support for EU‑based manufacturing projects, investment incentives, and a “Buy European” approach in public procurement to strengthen supply chains and boost competitiveness.

The draft also proposes voluntary cross‑border procurement and improved coordination of national stocks.

Impact: The EP’s advancement shapes EU legislative debate on medicine shortages. It affects pharmaceutical manufacturers, healthcare suppliers and public procurers. National authorities and businesses may need to consider EU manufacturing incentives and procurement criteria. Public procurement may give preference to suppliers with significant EU production. Support for strategic projects could influence investment decisions in manufacturing capacity. Coordination of national stockpiles may impact how shortages are managed.

EU: Anti-dumping duties on fused alumina

On January 16, the European Commission imposed definitive anti-dumping duties on fused alumina imports from China. Duties range from 88.7% to 110.6%. The EU also created a duty-free tariff quota to ensure stable supply for key industries. The quota will gradually shrink over five years. These measures aim to cut dependence on China and protect EU producers from unfair competition.

Impact: Fused alumina is vital for steel, metals, glass, and ceramics. It is also used for defense-related applications. The EU fused alumina market is valued at €400–500 million, with annual demand of around 380,000 tons. About 200,000 tons are imported, including roughly 160,000 tons from China.

Anti-dumping duties may reduce competition from low-priced imports, offering EU producers market stability. Non-EU exporters might lose market share.

EU: Fitness check on EU energy and gas supply security

On January 5, the European Commission published a “fitness check” on EU laws for electricity and gas security. This assessed 2017 and 2019 regulations, noting their positive role in ensuring stable supply and protecting vulnerable customers. It found emergency measures during the 2021–2023 energy crisis were necessary, signaling stronger rules are needed for future resilience. The report calls for a more robust, cross-sectoral approach, addressing lessons from the crisis and the April 2025 Iberian blackout.

The upcoming revision may emphasize emerging needs to adapt to future challenges, including energy consumption reduction and climate measures. Greater integration between Member States and the EU level is expected, with obligations for gas storage and voluntary demand reduction. Additional measures may include solidarity provisions and voluntary joint procurement to strengthen resilience and energy security across the EU.

Impact: Businesses in energy, and critical infrastructure may need to invest more in mandatory risk assessments, and in cybersecurity and climate adaptation. They might benefit from enhanced coordination, with an impact on supply chains and operational planning. Emergency preparedness and reporting duties are likely to expand, increasing administrative burden but reducing exposure to operational disruptions.

EU: New automotive package presented

On December 16, the European Commission (EC) presented the Automotive Package. The initiative aims to support the sector’s efforts towards clean mobility.

From 2035 onwards, carmakers must cut tailpipe emissions by 90%. They will compensate the remaining 10% through low-carbon steel ‘made in the EU’, e-fuels, or biofuels. This means removing the 2035 ban on combustion engines. Plug-in and mild hybrids, range extenders, and internal combustion engines remain viable alongside electric (EVs) and hydrogen vehicles.

Other key measures include:

• national targets to increase zero- and low-emission corporate fleets

• €1.8 billion Battery Booster for battery production and supply security

• an automotive omnibus

• incentives for small affordable EVs and harmonized labelling rules

Impact: Dropping the 2035 combustion engine ban and introducing a 90% emissions cut may reshape fleet strategies and technology investments. National corporate fleet targets would require businesses to accelerate EV adoption and review procurement plans. European battery cell producers should benefit from interest-free loans. Together with streamlined testing rules, this could lower costs and improve supply chain resilience. Simplified compliance and harmonized labelling aim to reduce administrative burdens and enhance consumer transparency. The EC estimates €706 million in annual savings from reduced red tape.

Eversheds Sutherland update

Middle East

Kuwait: Practical AI governance framework announced

On February 8, Kuwait’s Communication and Information Technology Regulatory Authority (CITRA) announced a practical approach to AI governance and digital integrity. The announcement followed a General Assembly that shifted discussions from policy to implementation. Kuwait is taking a more active role in shaping global digital rules and supporting responsible technological development.

Impact: Organizations working in or with Kuwait should anticipate clearer expectations around AI risk management. Businesses may wish to update their internal AI policies in regard to supply chain to reflect a more structured regulatory environment.

UAE ratifies ILO Forced Labor Protocol

On January 15, the UAE ratified the International Labor Organization’s (ILO) 2014 Protocol to the Forced Labor Convention. It becomes the sixty‑third country and the second Gulf Cooperation Council member to do so. The ratification aims to strengthen the UAE’s commitment to combating forced labor and human trafficking through enhanced legal protections, sanctions for perpetrators, and improved victim support. The decision will enter into force in the UAE one year after the instrument of ratification is deposited with the ILO.

Impact: Businesses may want to review internal compliance programs to help employees identify forced labor risks. It may be necessary to conduct audits of supply chains to ensure they are compliant with the Protocol ahead of it entering into force.

UAE: Single-use plastic ban implemented

From January 1, Dubai implemented a ban on single-use plastics. It is the final phase of the implementation of Executive Council Resolution No. (124) of 2023 on single-use products. The ban covers disposable cups and lids, cutlery, plates, straws, stirrers, and Styrofoam food containers. All single-use bags, regardless of material, are also banned, with restrictions on paper bags under 50 microns. The policy aims to reduce waste, protect ecosystems, and support a circular economy. Businesses must stop importing, manufacturing, or selling these items, and retailers are encouraged to adopt sustainable alternatives.

Impact: Dubai’s single‑use plastics ban will require multinational retailers, manufacturers, and hospitality operators to rapidly adjust product lines and supply chains. Businesses selling or distributing disposable packaging in the UAE should transition to compliant, reusable, or certified sustainable alternatives. This could potentially increase procurement costs and require new supplier agreements.

UK

UK government introduces new Steel Strategy

On March 19, the UK government announced that it would introduce measures to protect the UK steel industry from global competition as part of a Steel Strategy. The measures include a reduction in steel import quotas by 60% as well as the imposition of a 50% tariff on steel imports. The new strategy is in line with a feedback from a recent Call to Evidence and has the aim of boosting domestic production to bolster supply chains to vital sectors including critical national infrastructure, and defense. It also includes commitments to facilitate net zero, including promotion of the use of electric arc furnaces.

Impact: The new Steel Strategy will greatly benefit UK steel producers and steel workers by shielding the domestic industry from global overcapacity. In light of supply chain disruptions affecting the oil and gas trade, the Steel Strategy will also ensure that the UK economy is not adversely affected by external events and their impact on steel supply chains. Conversely, the new measures may negatively impact the UK’s steel-exporting trade partners.

UK issued largest package of sanctions against Russia

On February 24, the UK Government issued its largest ever sanctions package against Russia, targeting the energy sector, the shadow fleet, and Russian financial institutions. 

The package introduced nearly 300 new designations, including on:

• major energy infrastructure (notably, PJSC Transneft, which transports the majority of Russian oil exports)
• 175 companies in the ‘2Rivers’ oil trading network
• 48 additional oil tankers liked to shadow-fleet activity
• banks and intermediaries enabling sanctions evasion

Impact: Businesses across energy, finance, shipping, and logistics sectors should be mindful of the new restrictions and update their sanctions screening processes..

It is important to:

• update sanctions screening, assess banking and payments relationships, and monitor upcoming UK guidance to maintain compliance
• strengthen due diligence checks to identify any sanctions evasion activity due to enhanced secondary sanctions risks 

UK: MHRA consults on indefinite recognition of CE marked devices

On February 16, the Medicines and Healthcare products Regulatory Agency (MHRA) announced a consultation on the indefinite recognition of CE marked medical devices. It seeks views on extending transitional arrangements for devices approved under EU regulations to ensure a continuous supply of medical devices whilst maintaining patient safety.

Three options are proposed:

• extending acceptance of EU Medical Device Directive compliant devices to December 31, 2028 to align with EU timelines

• indefinite recognition of EU Medical Device Regulation / In Vitro Diagnostic Medical Device Regulation devices, either broadly or only for those in the same or lower risk class, with continued MHRA registration

• a new international reliance route that would offer a lighter, approved‑body‑reviewed pathway for CE‑marked devices with higher classifications than under EU rules

The consultation closes on April 10, 2026.

Impact: Businesses involved in the sector are advised to consider the impact of each of the three proposed options. Any flexibility on the use of CE marked devices could reduce the regulatory burden and maintain the supply of medical devices.

UK’s first PFAS plan

On February 3, the government unveiled the first PFAS Plan. This provides a framework for governments, businesses, and regulators to identify Per- and poly-fluoroalkyl substances (PFAS) sources, track their spread, and limit public and environmental exposure.

The plan sets out a range of measures and interventions, which includes: 

• addressing legacy contamination in land and coastal waters, ensuring consistency and practicality

• consulting on a statutory limit in England’s public water supply to improve drinking water quality

• testing of consumer products and helping inform potential future regulations and develop viable alternatives

• a website to increase public awareness and improve government transparency

Impact: Manufacturing businesses could face increased scrutiny across product development, supply chains, emissions and water management. Businesses should begin preparing for tighter regulation, supply chain due diligence and possible reformulation requirements.

UK: CMA guidance on green claims and supply chains

On January 22, the Competition and Markets Authority (CMA) published guidance on making green claims. The purpose is to help clarify where in the supply chain responsibility for making environmental claims lies. It contains a number of examples, and emphasizes the need to carry out appropriate due diligence. It aims to ensure that contract terms throughout the supply chain contain information provision obligations to facilitate the substantiation of environmental claims. It also contains checklists for retailers, brands selling through third party retailers, suppliers and manufacturers.

Impact: The CMA stresses that green claims can make any business in the supply chain liable. As a result, every business in a complex supply chain must ensure that it complies with consumer law to avoid being considered as engaging in greenwashing. Any business making or repeating environmental claims must ensure that those claims are clear, accurate, and well evidenced, particularly as the CMA can now impose fines without going to court.

UK: Software security ambassadors scheme

On January 15, the Department for Science, Innovation & Technology published details of its Software Security Ambassadors Scheme (Scheme). Organizations can sign up to the Scheme to become role models for the adoption of the voluntary Software Security Code of Practice (Code). The Code sets minimum standards for cyber security in software development and supply to help protect against software supply chain cyber-attacks and incidents. Signatories commit to promoting the Code and show-casing success stories. Software suppliers commit to appointing a Senior Responsible Owner who is accountable for implementation, self-assessment or third party verification. Signatories who are software buyers commit to incorporating the Code into their procurement and supplier management processes. Expert advisor signatories commit to promoting the Code and incorporating it into requirements for partner organizations.

Impact: The Scheme aims to boost supply chain security and business confidence in technology, facilitating sector growth and economic resilience. Widespread adoption of the Code could lead to enhanced cyber security provisions in contract terms. Awareness of good cyber security practices in supply chains would also increase among organizations.

UK joins European defense export treaty

On December 10, the UK Government announced it had joined a European defense export treaty with France, Germany and Spain. The agreement aims to simplify export licensing between the countries and strengthen cooperation on defense industrial development. It supports the UK’s ambitions on defense exporting, as set out in the Strategic Defense Review.

The new arrangement could help reduce administrative burdens, provide certainty for supply chains and support high‑skilled employment. UK manufacturers can now include up to 20% UK content in joint systems without causing export delays. Other contracting parties can still block exports if their security interests are at risk, with a two month notification period.

Impact: UK defense firms could benefit from simpler export licensing when trading with France, Germany and Spain. Businesses in multinational programs could gain greater certainty and smoother cooperation with European partners.

US

US: Proposed update to electric vehicle charger “Buy America” requirements

On February 10, the Federal Highways Administration (FHA) proposed an update to the Electric Vehicle (EV) charger program “Buy America” criteria. The FHA plans to expand a public interest waiver, increasing domestic content requirements for charging stations from 55 percent to 100 percent. The intent behind this is to:

• strengthen domestic manufacturing
• create new American jobs
• boost the competitiveness of US businesses
• address potential national security concerns

The planned change will apply to all federally funded EV charger projects during procurement or installation.

Comments on the proposal closed on March 16, 2026.

Impact: The 100 percent American-made component requirement could create challenges for manufacturers. They may face issues ensuring a reliable domestic manufacturing base and supply chain. Domestic manufacturers should prepare for potential supply chain disruptions, increased costs and competition.

US: FDA launches PreCheck program to boost domestic drug manufacturing

On February 1, the Food and Drug Administration (FDA) launched the PreCheck Pilot Program. This aims to strengthen the domestic pharmaceutical supply chain by easing regulatory barriers for new domestic facilities. Priority will go to sites producing critical medications for the domestic market. The first phase will select facilities that align with program priorities and begin PreCheck activities in 2026. Selected companies will receive ongoing FDA communication during early development and earlier regulatory feedback. The program seeks to streamline reviews, support efficient inspections, and improve access to essential medicines.

Impact: The current US Administration has made it clear it wants to onshore manufacturing, to strengthen supply chains, and to bring down the cost of drugs for the domestic market. Pharmaceutical companies may want to consider applying if they're building a new manufacturing facility.

US: Presidential order withdrawing from international agreements announced

On January 7, the Administration published a Presidential Memorandum directing the withdrawal of the US withdraw from the United Nations Framework Convention on Climate Change and 65 other international organizations. The order requires federal agencies to end participation in, and funding for 35 non UN bodies and 31 UN entities following a government wide review of US involvement in international institutions.

Impact: Businesses may face fragmented climate policy frameworks, reduced US alignment with global reporting standards, and potential delays in cross‑border regulatory cooperation. Businesses operating in the US could encounter weaker federal climate engagement, while subsidiaries elsewhere must still meet stringent international requirements, increasing compliance complexity. Supply chains linked to US federal programs or UN‑supported initiatives may experience disruption.

US: Imports of foreign drones and components restricted

On December 22, the Federal Communications Commission (FCC) updated its Covered List which effectively bans the import of all new foreign-made drones and critical components. It cited national security risks. Existing drones already approved and purchased remain unaffected. The decision follows a White House review highlighting threats such as unauthorized surveillance and data exfiltration. The FCC’s ruling aligns with broader efforts to reduce reliance on foreign drone firms.

Impact: Waivers may be possible through processes managed by the Department of War and Homeland Security. Drone manufacturers should be aware that further restrictions could be announced. Manufacturers should prepare for restrictions by diversifying supply chains, ensuring compliance with security standards, and exploring domestic production to maintain market access. Some disruption could be expected as domestic component supply ramps up to fill any gaps from foreign imports.

US: Biosecure Act becomes law

On December 18, the Biosecure Act passed into law as part of the National Defense Authorization Act (NDAA) 2026. This was first introduced to Congress in May 2024, but failed to make it into the NDAA 2025. It restricts federal funding for biotech companies from acquiring equipment or services from foreign adversaries. Unlike earlier versions, it avoids naming specific Chinese companies. It now uses a broader definition for Biotechnology Companies of Concern, based on national security risks and foreign influence. It calls for the Office of Management and Budget to publish a list of entities one year after enactment.

Impact: The Act could impact businesses in several ways. These include businesses with US Government contracts, those in receipt of federal funding or with extensive supply chain dependency on identified Biotechnology Companies of Concern. Businesses should review processes and supply chains to ensure they are compliant with the Act. They may need to diversify partnerships and manufacturing locations.

Eversheds Sutherlands. NDAA 2026: New biotech restrictions and outbound investment controls

Further reading

The US Administration’s Plan B: The USTR announces 76 new Section 301 investigations

Refunds of IEEPA tariffs: What importers can do now

Refunds, trade agreements, and new tariffs

EU Legislation Roundup: February 2026

What to Expect in the Year of the Horse

UK and India enter into a reciprocal double contributions convention

Global Sustainability & ESG Insights

Co-authored by Westley Trimble, Paola Paccani, Jon Botham, Rachel Campion, Nathan Handoll (Knowledge)