US Tariffs | How to Draft Contracts to Handle Tariffs, Refunds, and Disputes

22 de febrero de 2026

  • Italia
  • EEUU
  • Contratos de distribución
  • Derecho Fiscal y Tributario

Executive Summary

The African Continental Free Trade Area (AfCFTA) remains one of the most ambitious integration projects in the world. Yet, several years into its operational phase, it has not (yet) delivered the structural shift many expected. A recent analysis underscores the gap between political momentum and economic reality: implementation remains uneven, the agreement is still used by only a portion of participating states, and non-tariff barriers and infrastructure deficits continue to dominate the cost of doing business across borders.  For Egypt, the opportunity is still real — but it depends less on treaty headlines and more on enabling conditions: trade logistics, customs efficiency, regulatory convergence, and competitive industrial capacity. 

Looking Back: The Promise of a Single African Market

When the AfCFTA was launched, expectations were understandably high. A continent-wide trade framework was supposed to reduce tariffs, facilitate trade in goods and services, and strengthen regional value chains — with the broader goal of moving African economies up the value ladder.

In my 2022 article, I asked whether AfCFTA could become a game changer for Egypt, given Egypt’s industrial base, strategic geography, and the potential to diversify export markets beyond traditional partners. (For background, see the earlier article here”).

The Reality Check: Intra-African Trade Remains Structurally Weak

Several years later, the interim assessment is sobering. As the Frankfurter Allgemeine Zeitung (FAZ) recently put it, AfCFTA is not a “game changer” yet, and only about half of member states currently meet the practical prerequisites to trade under the agreement.

A deeper reason is structural: no other world region trades so little with itself, and while statistics may undercount informal cross-border flows (especially in food), the overall picture remains unchanged.

Trade integration cannot deliver transformative outcomes if production, logistics, and institutions do not support scale.

Implementation Has Been Slow — and Often Symbolic

Operationalisation did not start with full-scale liberalisation. Instead, the AfCFTA began with a pilot approach: the Guided Trade Initiative (GTI) launched in October 2022, initially with eight states, later joined by additional countries, including Nigeria and South Africa by spring 2025.

The GTI created valuable learning effects, but it also underlined a key point: early progress was often presented through symbolic deals, while product coverage and volumes remained limited. FAZ highlights that only selected goods could be traded duty-free and that key sectors remained constrained for a long time due to missing or unresolved technical rules.

A pilot, however, cannot substitute for full operational certainty — the kind businesses need to restructure supply chains and invest.

Tariffs Are Not the Main Barrier — Trade Costs Are

AfCFTA is frequently discussed in terms of tariff liberalisation. Yet, evidence suggests that the largest gains do not come from tariffs but from reducing non-tariff barriers and improving trade infrastructure.

FAZ points to a central reality: tariffs tend to add around 20–30% to intra-African trade costs, whereas non-tariff costs can be far higher — driven by bureaucracy, lack of harmonised standards, inefficient border processes, and transport barriers.

This is the crux: even with reduced tariffs, trade will not expand meaningfully if goods still cannot move cheaply, quickly, and predictably.

Integration Complexity and Distributional Politics

Africa’s integration landscape is shaped by multiple overlapping regional economic communities and trade regimes. This creates legal and administrative complexity — often described as an integration “spaghetti bowl.” FAZ notes the challenge of coordination and the continued fragmentation of rules.

There is also a political economy dimension. Intra-African trade is heavily influenced by a small number of larger economies — and the distribution of benefits matters. FAZ highlights the dominance of major players (notably South Africa) and the concern that tariff liberalisation alone may entrench existing industrial advantages.

Where governments expect asymmetric outcomes, resistance often takes the form of delay, narrow implementation, or persistent non-tariff barriers.

What This Means for Egypt: The Opportunity Is Real — But Conditional

Egypt’s strategic case for AfCFTA participation remains strong: industrial potential, geographic location, and the opportunity to access and shape growing markets. But the experience so far suggests that the treaty text alone does not generate trade flows.

For Egypt’s private sector, the decisive factors are practical:

  • predictable and efficient customs clearance and border procedures,
  • logistics corridors and port efficiency,
  • regulatory convergence (standards, certification, compliance),
  • stable access to trade finance and payments,
  • competitive energy and production conditions for manufacturing and processing.

AfCFTA can support these developments — but it cannot replace them.

The “Game Changer” Pathway: What Must Happen Next

FAZ concludes that AfCFTA will only become truly impactful if it is paired with the fundamentals: major infrastructure investment, stronger production and processing capacity, and a credible industrial policy.

At the same time, Africa faces a classic chicken-and-egg problem: without development there is limited investment appeal; without investment there is limited development.

For Egypt and its partners, a pragmatic strategy would be to:

  1. treat AfCFTA as a platform for real trade-cost reduction, not only tariff debates;
  2. focus on a limited number of scalable corridors and sectors where regional value chains can realistically grow;
  3. strengthen implementation capacity so that preferences become usable for firms — especially SMEs;
  4. enhance legal certainty and dispute resolution reliability for cross-border commerce.

Conclusion

AfCFTA remains a landmark achievement in terms of political commitment. But as of today, it has not yet been the “game changer” many hoped for.

For Egypt, the key question is no longer whether AfCFTA is visionary — it is. The question is whether governments and businesses can translate it into lower real trade costs, higher competitiveness, and bankable cross-border transactions. If those enabling conditions improve, AfCFTA’s promise can still become commercial reality.

After “Liberation Day,” many foreign companies offered discounts to American importers to help them offset the tariffs. A few months later, the US Supreme Court declared the «reciprocal» tariffs unlawful, but on the same day, President Trump announced new tariffs. In this article, we provide a practical overview of how to handle various scenarios, shifting from a reactive, unstructured approach to deliberate management of price volatility and trade flows caused by the introduction, adjustment, and removal of tariffs.

Tariff Sharing agreements

For a long time, the question has been straightforward: who absorbs the extra customs cost? The exporter? The importer? Both? The question remains important, but today it is incomplete.

The new scenario, in light of the recent ruling by the US Court of Justice on March 20, 2026, is: what happens if that duty is then canceled and refunded? If the cost was shared between the parties, the benefit of the refund must follow a consistent logic. In the absence of a clear agreement on this point, however, there is a risk of economic misalignment that could compromise the commercial relationship.

Let’s imagine an Italian winery that sells its products to a US importer. Following the introduction of reciprocal duties, the parties have decided that the exporter will grant an extraordinary discount of 7.5%, explicitly motivated by the need to share the impact of the duty. The commercial relationship continues, volumes remain stable, and the importer avoids passing on the entire increase to the end customer.

As a result of the Supreme Court ruling (or, in the future, another ruling or administrative decision), the importer obtains a refund of the duties paid during that period.

If no formal agreements have been made on this point and the documentation refers generically to a «commercial discount» and says nothing about reimbursement, the situation afterward may be difficult to reconstruct and, above all, could lead to commercial tension. As a result, a positive development (the cancellation of the duty and the right to reimbursement) becomes a problematic factor that jeopardizes the relationship.

Is the exporter entitled to a refund of the discounts granted to mitigate the duties?

In the absence of a different agreement between the parties, the right to reimbursement belongs to the party who paid the duty, i.e., in most cases, the importer. Therefore, there is a risk that the importer will enjoy a double benefit (the discount and the duty refund), while the exporter will get nothing.

For this reason, it is essential that the parties do not limit themselves to negotiating prices and discounts, but also establish the consequences of the adoption, modification, or revocation of duties on the contract, including any refunds.

To achieve this, the first step is to accurately classify and document the discounts granted. If only a «commercial discount» appears in emails, commercial orders, credit notes, and invoices, it will be harder to later argue that this discount was actually an extraordinary, temporary contribution related to the duty. Conversely, if the documentation and contract specify that it is a tariff sharing or tariff mitigation measure, identifying the amounts to be refunded after the fact becomes much simpler.

The goal is to create a clear view of the trend in discounts and payments so that, if needed, financial flows can be adjusted to align with the original terms of the agreement: if the exporter has helped cover a cost that then, in whole or in part, does not end up materializing, they will be eligible for a refund of the contribution paid.

The contract will therefore include, in addition to the Tariff Sharing clause, a Tariff Reimbursement Allocation clause, which states that if the importer receives a refund, credit, or any other economic benefit related to the duty for which the exporter has granted a discount, the importer must return the corresponding portion of the benefit to the exporter in full. or proportionally, depending on how the parties intend to distribute risk and incentive.

Importer’s responsibility to seek reimbursement

It is unclear whether, in the case of US reciprocal duties, importers can simply file an administrative claim to get a refund or if legal action will be required. The latter seems more probable.

Generally, obtaining a duty refund involves action, deadlines, documentation, and coordination with brokers and customs consultants. In most cases, the entity controlling the process is the importer (or someone acting on their behalf).

This raises a sensitive but very real issue: if the importer knows that they will have to invest time and money to obtain a refund, only to then have to share the benefit with the exporter, their incentive to take action may be reduced. To prevent this inertia  the contract should contain an express obligation to take action, set out as a duty of best efforts or commercially reasonable efforts.

For example, the contract should specify that the importer must inquire about the conditions and time limits of the process, keep relevant documentation, regularly inform the exporter about the progress of the initiatives, and not unilaterally waive or reduce the claim if it affects the exporter’s economic rights.

Preventive Agreements on Litigation and Cost Allocation

When reimbursement involves a lawsuit or structured legal action, the obstacles are organizational and financial: who decides if and when to proceed, who selects the lawyers, who pays the costs upfront, how the net recovery is divided, and who has the final say on a settlement. This generally applies to all contracts, not just this case: dispute resolution methods must be addressed and agreed upon before the problem arises.

Otherwise, the dispute resolution process risks becoming a secondary improvised negotiation at the worst time — when the parties are already under pressure from margins, cash flow, and regulatory uncertainty. As a result, it becomes much harder to reach an agreement.

How to handle new tariffs and their potential cancellation

To safeguard against uncertainty, the agreement should be organized into two stages.

  • The first stage regulates the immediate impact of the change in scenario, for example, the introduction of a new tariff or its increase (renegotiation, cost sharing, automatic adjustment : I discussed this in this article).
  • The second stage manages the possible «rollback» (right to reimbursement, process, allocation criteria).

This approach has a clear benefit: it does not force the parties to discuss every time the tariff regime changes or a decision to cancel tariffs is made. Instead of reacting to market changes, a tool is adopted to manage potential scenarios, which is much more resilient commercially and easier to oversee, as the rules have already been agreed upon.

This allows the impact of duties to be regulated not as an extraordinary variable, to be agreed upon on a one-time basis, but as a structural, adaptable phenomenon that could last a long time.

This is why it is crucial to know how to draft contracts that cover both the current situation and potential changes, including any refunds.

Conclusion: Three practical steps for companies exporting to the US

The first is to agree on the consequences for the contract of the introduction of a new duty, increasing it, or revoking it (renegotiation, cost sharing, automatic price adjustment, right to share the refund).

The second is to clearly document any discount granted to offset a duty. If it remains a generic «commercial discount,» the right to a refund if reimbursement occurs will be much harder to enforce.

The third step is to determine what happens if the duty is canceled or revoked: the importer’s responsibility to take action to get a refund, manage the administrative process or litigation, how to divide costs, who oversees the activities of consultants and lawyers, and how the recovered funds will be allocated.

How do you approach negotiating a trade agreement with China?

Based on my experience, let’s examine the issues to be addressed and the main questions to ask, taking the negotiation of a trade distribution agreement as a practical example.

Let’s start with the first issue that is important to clarify.

Nice Business Card – But Who Is This Guy?

Business cards, websites, printed or digital brochures, presentations, and any other materials shared in English have no official value in China.

The company name of the counterparty and the first and last names of people representing it or acting on its behalf, written in English, are only fictitious names.

To be certain of the company’s data and the identity of the persons, it is necessary to ask for the information in Chinese, with particular reference to the company’s business license (equivalent to the Companies House or Chamber of Commerce’s excerpt), from which the name, corporate purpose, registered and paid-up share capital, and the name of the legal representative can be inferred.

The data can then be verified by accessing the portal of the State Administration of Industry and Commerce (SAIC) of the province where the Chinese party is based.

This first verification is essential to ensure that you do not waste time or even run into scams (here’s an in-depth article on Legalmondo’s blog).

If You Don’t Own Your Trademark, Someone Else Will – and Charge You for It

Trademark First, Trade Later. China operates on a first-to-file system for trademarks, which means that the first person or company to register a trademark – not necessarily the original creator or most famous user – gains the legal rights to it. This creates a serious risk: if you haven’t registered your trademark in China, someone else might do it before you, and then either use it freely or demand a hefty ransom to give it back. Even high-profile figures like Elon Musk and Michael Jordan have been entangled in costly and protracted disputes with Chinese trademark squatters. In many cases, getting the mark back is highly complicated, and sometimes legally impossible.

To avoid this, register your trademarks early, even before entering the Chinese market. File directly with the China Trademark Office (CTMO) and don’t stop at the English version — consider registering a Chinese character version as well, since that is how your brand will often be known locally.

Once that base is covered, clearly state in your contract that your Chinese partner is not allowed to file a registration of any of your trademarks in China, in Latin or Chinese characters, and that he will use trademarks and IP rights in strict conformance to the contract and your instructions.

For a deeper dive into how to effectively protect your IP rights in China, check out our detailed article on the Legalmondo blog.

Contracts can wait. First, get on the same page

When negotiating with a Chinese partner, it’s often a mistake to begin the conversation by exchanging contract drafts. Instead, focus first on the substance — the relationship’s commercial and technical terms. Using a clear checklist of key discussion points (such as products, pricing, delivery terms, technical standards, after-sales support, exclusivity, duration, payment terms, etc.) helps ensure that both sides are aligned on what really matters. Take detailed notes and keep minutes of the discussions, especially where and when consensus is reached, and make sure those minutes are circulated and expressly agreed upon. Once substantial agreement has been achieved on the main terms, this memo can then be handed over to your lawyer, who will translate the business understanding into clear and coherent contractual language. This approach saves tons of time, as it helps avoid unnecessary back-and-forth on legal language before the core deal is in place.

Think Your NDA Covers You in China? Think Again

Yes, they are—and often underestimated. A well-drafted Non-Disclosure Agreement (NDA) is essential when the parties plan to exchange confidential information, such as technological know-how, commercial strategies, supplier data, or client lists. Especially in the early phases of negotiation or cooperation, before a main contract is signed, an NDA helps protect intellectual and business assets.

However, as with all contracts in China, a generic NDA template copied from other jurisdictions will likely be of limited use. To be truly effective, the NDA must be adapted to the specifics of the Chinese legal environment. This includes ensuring that it is enforceable in China: the NDA should include the proper dispute resolution mechanism (see below on why you should consider applying Chinese law and litigating in China), and it must specify clear, valid, and proportionate penalties for breach. In Chinese practice, stating specific contractual penalties (liquidated damages) is often more effective than vague references to compensation, as courts and arbitrators in China tend to enforce these more reliably if they are reasonable.

While a good NDA is useful, it often falls short in China’s manufacturing and sourcing landscape. This is where the NNN Agreement – standing for Non-Disclosure, Non-Use, and Non-Circumvention – becomes critical. Unlike standard NDAs that primarily focus on confidentiality, an NNN Agreement is designed to address the unique risks of doing business in China. It prevents the recipient from not only disclosing confidential information but also from using it for their benefit or bypassing the disclosing party to work directly with suppliers, clients, or partners. Which, in China, is a very real risk.

This broader scope is vital when dealing with Chinese manufacturers or intermediaries, who may otherwise be tempted to replicate products or contact customers directly or through third parties. As seen with the NDA, also the NNN Agreement must be drafted in Chinese, governed by Chinese law, and enforceable in Chinese courts -otherwise, it may offer little real protection.

Joint venture? Easy, Cowboy

A joint venture is often the first proposal that comes up when negotiating with a potential Chinese partner. It seems appealing: sharing risks and investments, accessing the local market with an ally, leveraging their knowledge and network of contacts. But the reality is often very different from what it appears to be.

A joint venture is a complex, expensive, and rigid corporate structure that requires significant investments of money, time, and human resources, as well as the ability to continuously manage often divergent interests among the partners. The vast majority of Sino-Foreign JVs have gone wrong, or will go wrong. Or very wrong. First and foremost, because the JV is usually managed by the Chinese partner, and exercising effective control over the company’s operations is a very challenging undertaking.

Before going down this road, it is essential to ask yourself a few questions: Is the joint venture really indispensable for developing this business in China? (Spoiler: generally, no). Are there less restrictive and risky alternatives, such as a distribution agreement or a licensing agreement? (Yes, almost always). And above all: how well do we really know our potential partner?

A joint venture should only be considered if it is strictly necessary for the project’s development, after carefully verifying the commercial viability and the reliability of the Chinese partner, and ensuring the ability to maintain effective control over the JV’s operations.

It is better to start with simpler and more flexible forms of collaboration to test the market and the relationship with the other party before committing to such a demanding investment. Otherwise, the mirage of the joint venture risks turning into a nightmare that can be very costly.

Memorandum of Understanding: Where Good Intentions Become Bad Contracts

A Memorandum of Understanding (MoU) is a helpful tool at the early stage of a commercial relationship. It serves as a roadmap for future negotiations, where the parties outline the main principles and intentions that will guide the drafting of the final agreements. When used correctly, an MoU can significantly facilitate negotiations by ensuring that both sides commit to negotiating the agreement in good faith and share a common understanding of key points such as pricing models, territorial scope, exclusivity, milestones, budget, or performance expectations.

However, an MoU must be used for what it is: a preparatory document, not a binding contract. Care must be taken to avoid ambiguity and unintended commitments. The text should clearly specify that the parties remain free to conclude – or not – the final agreements and which clauses are non-binding – such as the commercial framework or indicative timelines – and which provisions are binding, typically confidentiality, exclusivity during the negotiations (if agreed), governing law, and dispute resolution. A poorly drafted MoU, which includes overly precise and complete terms, can be misinterpreted as a final agreement, creating unnecessary legal risk. So yes, MoUs are valuable – but only when used correctly. If you’d like to know more, go deeper by reading this article.

Bad Drafts, Big Headaches, Poor results

Draft agreements used in China are often copied and pasted from incomplete, superficial, poorly organised templates written in bad English, which often do not match the Chinese version of the contract.

Correcting and integrating these drafts is complicated and more time-consuming than starting from a good template, with suboptimal results.

It would be better to propose a consistently constructed text and ask the other party to propose any changes and additions to this draft.

Your Western Contract Template Won’t Work Here

Even if an English-language contract is perfectly valid, there are many reasons why using contract templates built for other countries in the Chinese market is inadvisable.

The first is the fact that Anglo-Saxon-based agreements, such as those for the U.S., refer to a common law system (which is based on judicial decisions and case law precedents) that is very different from that of civil law countries (such as China and Italy), which derives from the Roman legal tradition, based on a codified set of written laws.

It follows that the layout of an agreement on the Anglo-Saxon model is different, much more detailed, and wordy than that of a typical agreement based on a civil law system. Since contract negotiations in China are generally lengthy and complex, working on redundant and complicated text at the outset does not help.

If we stick to the example of a distribution contract, it should be added that it is advisable to apply Chinese law to provide for arbitration based in China (e.g., at CIETAC) or in Hong Kong or Singapore (third countries, where, however, the costs of the procedure increase significantly) as the mode of dispute resolution. So, the contract should be built on a model that conforms to the law that will apply to the relationship.

Home Court Advantage Won’t Help You in China. In fact, quite the opposite

This is a typical point of disagreement in the negotiation of an international contract: the parties aim to have the law of their own country apply, and to stipulate that any disputes be adjudicated by their domestic courts.

In our case, insisting on the application of Italian (or any other foreign) law and state court is not a good idea: it should be considered, in fact, that a distribution agreement is carried out, for the vast majority, in the country where the distributor operates and where the products are sold (in our case, in mainland China).

In disputes, the parties’ (particularly the manufacturer’s) interest is to obtain a quick decision by the adjudicating body, especially if situations requiring immediate protection (such as unfair conduct or counterfeiting of trademarks and patents by the distributor) are ongoing.

None of this is possible if one goes to an Italian judge (with lengthy litigation time and the need then for a complex and costly process to recognise and enforce the decision in China); on the contrary,  an arbitration in China, applying Chinese law, allows one to reach a decision quickly (on average 6-9 months) and, if necessary, also to obtain urgent measures to stop any unfair conduct.

Chinese Law Isn’t a Black Box (If You Know What You’re Doing)

The lawyer assisting you should know it.

Therefore, it is not a leap in the dark, and one should not fear surprises.

In addition, it should be remembered that an agreement is primarily based on the covenants that the parties have written in the contract; therefore, if the contract has been well drafted, the rules to be applied are clear.

Finally, if we consider distribution agreements, keep in mind that they are a framework contract, within which a series of separate product sales contracts are concluded. If both countries are contracting parties to the 1980 Vienna Convention on the International Sale of Goods (CISG), then the uniform, clear, and balanced rules of the convention apply automatically, just don’t opt out!

One Contract, Two Languages

The contract is also valid in English only.  However, it is undoubtedly advisable to draft a Chinese version with facing text.

This is for several reasons: first, it prevents the Chinese party from having to arrange for a translation of the text during negotiations for its own internal use (top managers often do not speak English), thus slowing down the various steps of negotiations.

Also, to ensure that the Chinese side fully understands the agreement’s content and to avert misunderstandings (real or instrumental) about the interpretation of certain covenants.

Finally, it should be borne in mind that if the contract were later to be used before a court or administrative authority in China, the only language admitted would be Chinese; for this reason, it is better to have already a text agreed and signed by the parties in Chinese as well, rather than having to prepare a unilateral translation later.

Sign. And chop

Does the contract need to bear the company’s official stamp? Yes, and this point is absolutely crucial. In China, a company’s official «chop» (the red-ink stamp) is equivalent to a signature and is conclusive proof that the person signing the contract has the authority to represent the company. A signature alone, even from someone with an important-sounding title, may not be sufficient if it is not accompanied by the official chop. Without it, the contract might later be challenged or even considered void. Before signing, always verify that the stamp used matches the one registered with the company’s business license or official corporate records, and ensure that the stamp is applied on every page or at least on the signature page, in line with local practice.

Don’t Let Your Contract Collect Dust

Things change fast, especially in China. New products are added, market conditions evolve, people leave the company, new competitors emerge on the horizon, and so on. Companies constantly adapt to the new conditions, and so must the contract.

Any change in the relationship should be formalized correctly. To avoid misunderstandings and disputes, it’s advisable to include an integration clause in the contract, specifying that any amendments or additions will only be valid if agreed in writing, signed by the parties’ authorized representatives, and annexed as an addendum to the original agreement.

It’s not enough to include this clause – you must follow it consistently. If things change, agreements reached verbally, through Wechat messages, and through email exchanges may make things complicated if they are not formalised adequately according to the procedure set out in the original contract.

If you’d like to go deeper, check out this article.

Son bastante frecuentes las relaciones comerciales con agentes o distribuidores que duran años y sin ningún documento firmado. Y, cuidado, porque ya sabemos que un contrato puede existir incluso verbalmente.

La inexistencia de un contrato escrito va a añadir dificultades en una posible reclamación, por eso, lo que se haga entre la decisión de ponerle fin y el momento de la reclamación es muy importante. Recuerda: “cualquier cosa que escribas será usada en tu contra”.

La decisión de terminar una relación comercial es un momento muy delicado al que, no sé por qué, a los abogados no se nos invita. Os doy algunos ejemplos (todos reales) en los que las empresas o algún empleado con la mejor voluntad escribió al agente/distribuidor. Todos fueron luego muy perjudiciales para la empresa:

 

Decir “Ponemos fin a nuestra relación comercial” cuando la estrategia será defender que dicha relación comercial no existe, sino que son contratos independientes y encadenados (por ejemplo, suministro en lugar de contrato continuado de distribución; consecuencias de indemnización muy relevantes).

“Usted ya no representa a nuestra sociedad”, lo que puede ser una prueba de que antes sí lo hacía.

“A partir del día X usted ya no puede actuar en nombre de nuestra sociedad” que probaría que antes sí podía actuar en su nombre.

“Usted no puede asistir a la feria de X en nuestro nombre”. Una forma de confirmar que entre las competencias del agente/distribuidor estaba participar en ferias y probablemente acredita los clientes obtenidos.

“Las ventas promovidas por Ud. se han visto reducidas significativamente en el año N”. Cuando no hay contrato escrito ni otra forma de documentarlo, imputar un incumplimiento de una obligación que no está clara, puede ser contraproducente.

Decir “No estás llevando a cabo una promoción activa de nuestros productos” para añadir a continuación: “le instamos a que deje de promocionar la venta de nuestros productos”.

“Usted deja de ser nuestro representante exclusivo”, lo que prueba un tipo de relación (representación/agente) y un acuerdo tácito o expreso (“exclusividad”)

“Hemos designado a otro representante en su zona”, que demuestra que el agente/distribuidor tenía una zona asignada y “representaba”.

“A partir de este momento los pedidos serán asumidos por X” que, igualmente confirma un tipo de relación.

En resumen: a partir del momento en el que la empresa valora poner fin a una relación comercial, sobre todo cuando no está escrita y antes de enviar cualquier carta, es conveniente pensar bien en la estrategia de cara a una posible reclamación. Es el momento más adecuado para asesorarse y evitar sorpresas. Cualquier comunicación que no esté alineada con esa estrategia diseñada desde el principio solo podrá aportar confusión y problemas.

Remember the USA – EU agreement on 15% tariffs? I wrote that with a negotiator like Trump the game is never over (article here) and—after the recent interlude featuring a threat of 100% tariffs on pharmaceuticals—the U.S. government has announced the imposition of an overall 107% duty on Italian pasta, which could take effect on January 1, 2026.

Where this new duty comes from

The antidumping investigation was launched by the U.S. Department of Commerce at the request of certain competing American companies and is based on a 1996 antidumping order that allows for periodic reviews of imports of Italian pasta. The Department of Commerce conducts these checks annually to assess whether Italian producers are selling pasta at prices lower than the U.S. domestic market, a practice known as “dumping.”

Companies involved in the investigation

The Department of Commerce selected two sample companies for in-depth analysis, defined as “mandatory respondents”: La Molisana and Pastificio Lucio Garofalo. According to the official document published by the U.S. administration, for the period from July 1, 2023 to June 30, 2024, both companies allegedly sold their products below market prices, resulting in the imposition of a duty of 91.74%.

U.S. authorities justified this percentage by claiming the two companies did not provide complete or compliant information as requested by the Department and were therefore insufficiently cooperative during the investigation. What is very important is that, in addition to the two companies directly examined, the additional 91.74% duty is also applied to numerous other Italian producers not individually reviewed. This methodology, while formally permitted under U.S. law as an exception, is being applied without any direct verification of the other companies.

Next steps in the procedure

Italy’s Ministry of Foreign Affairs moved immediately, formally intervening in the proceeding as an “interested party” through the Italian Embassy in Washington. The Foreign Ministry is working in close coordination with the companies concerned and, in concert with the European Commission, to persuade the U.S. Department to revise the provisional duties.

The two companies involved (La Molisana and Garofalo) can submit documentation to contest the dumping allegations. However, if dumping is confirmed, the Department of Commerce will instruct Customs to apply antidumping duties on goods sold and entered into U.S. commerce.

The preliminary nature of this determination means there is still room to change the decision before it becomes final.

Possible effective date

The new super-duty of 91.74%, which will be added to the existing 15% tariff for a total of 107%, is scheduled to take effect on January 1, 2026. This date therefore represents a crucial deadline for all ongoing diplomatic and legal actions.

If confirmed, the economic impact would be significant: in 2024, Italian pasta exports to the United States reached a value of €671 million according to Coldiretti, accounting for nearly 17% of the sector’s total exports. A 107% duty would risk seriously undermining competitiveness in one of the most important markets for Italian agri-food products.

 What to do between now and January 1, 2026?

At this stage, the entry into force of the new duty depends on the outcome of the ongoing procedure: given what has happened in recent months, and the political use the U.S. administration has made of tariffs—well beyond their technical function—it is reasonable to be pessimistic.

So, what to do? In recent months we have seen companies react to the uncertainty over the fate of the tariffs in three ways:

  • Some rushed to ship as many products as possible before the potential effective date of the duty;
  • Some granted—upfront—discounts equivalent to the threatened duty, in case it came into force;
  • Some suspended orders, pending definitive news on the impact of the duties.

These are all  valid options, but other effective tools for managing the uncertainty caused by the flurry of announcements, negotiations, and threats from the U.S. administration should not be forgotten: the risk of new duties being introduced, or existing ones being increased, can be managed in the contract by agreeing with the U.S. importer how any tariff change will affect the product.

The parties can stipulate, for example, that the increase will be split equally; or that the importer will bear it beyond a certain threshold; or that if the duty exceeds a certain level, the contracts may be terminated. You can find a deeper dive in this article.

The only certainty is that trade relations with the U.S. will stay unpredictable for a long time, and it’s vital to carefully manage the risk factors involved in selling products there. Right now, the focus is on tariffs and prices, and I encourage you to take this chance to thoroughly review existing agreements and assess whether—and how—other important points are addressed that could entail significant liabilities: we discuss them, very practically, in this book.

On 29 June 2025, the Vietnamese government introduced Decree No. 163/2025/ND-CP (Decree 163). This decree provides detailed guidance on how the updated Law on Pharmacy will be implemented.

Like the amended Law on Pharmacy, Decree 163 came into effect on 1 July 2025, replacing the previous Decree No. 54/2017/ND-CP (Decree 54). The new decree sets out comprehensive rules for key aspects of managing pharmaceuticals, including:

  • Pharmacy practice certificates
  • Certificates allowing pharmaceutical businesses to operate
  • Import and export of medicines and drug ingredients
  • Good Manufacturing Practice (GMP) inspections of overseas manufacturers
  • Recalling medicines and drug ingredients
  • Certificates for medicine advertising content
  • Medicine price management

Key Changes in Decree 163

Here are some important changes and additions introduced by Decree 163:

Destroying Specially Controlled Medicines

You no longer need to get approval from the relevant authority before destroying narcotic, psychotropic, and precursor drugs, or pharmaceutical ingredients that are narcotic or psychotropic substances or precursors used in medicines. Instead, you just need to provide notification at least seven working days in advance. This notification must include the planned destruction date and a detailed list of items to be destroyed.

E-commerce in Pharmaceutical

Pharmaceutical businesses that sell products online must openly display the following information to ensure transparency and consumer safety:

  • Their certificate allowing them to operate as a pharmaceutical business.
  • The pharmacy practice certificate of the person responsible for pharmaceutical expertise.
  • Information about the medicines themselves.

Shelf-Life Rules for Imported Products

For medicines and ingredients with a total shelf life of nine months or less, at least one-third of their shelf life must remain when they clear customs. Medicines with a shelf life of 30 days or less must still be within their shelf life at the time of customs clearance.

Controlling Imported Products

All medicines with marketing authorisation (MA) are subject to import control, except for:

  • Medicines needed for preventing and treating Group A infectious diseases that have been declared epidemics, as per the Law on Prevention and Control of Infectious Diseases.
  • Medicines with a shelf life of less than 30 days.

Importers must inform the provincial People’s Committee at least five working days before making a customs declaration. The People’s Committee can then issue a written notice of non-compliance to the customs authority within five working days of receiving this notification.

Medicine Advertising

Decree 163 adds a process that allows an approved medicine advertising certificate to be adjusted for certain changes (such as a change to the MA holder or manufacturer information). This means you don’t have to go through the entire initial registration process for medicine advertising content again, as was required under the previous rules.

Medicine Price Management

Businesses must announce or re-announce wholesale prices, similar to the medicine price declaration process under Decree 54. Some medicines are exempt from this requirement, including those provided free of charge for emergency responses, national health programmes, humanitarian aid, clinical trials, scientific research, or exhibition purposes, and medicines carried as personal luggage.

The Ministry of Health (MOH) can make recommendations if the announced or re-announced price is significantly higher than similar medicines already on the market. This includes situations where:

  • The announced or re-announced wholesale price of the medicine is higher than the highest price of similar medicines.
  • The price difference is more than 35% (for medicines priced under VND 1 million) or 15% (for medicines priced at VND 1 million and above) compared to winning bid prices in tenders.
  • The announced or re-announced price is higher than prices in the country of origin or other markets (if there’s no similar product in Vietnam).
  • When such differences are found, the MOH issues a formal recommendation to the announcing business and publishes it online for transparency and accountability.

Further Guidance in New Circular

On 1 July 2025, the MOH issued Circular No. 31/2025/TT-BYT (Circular 31), which further details how the amended Law on Pharmacy and Decree 163 should be implemented. Circular 31 officially replaces Circular No. 07/2018/TT-BYT and Decree 54 and came into effect immediately.

Key provisions of Circular 31 include:

Notification of Practising Pharmacists

Pharmaceutical businesses that are not part of a pharmacy chain must inform the relevant authority of a list of people currently working at the business who hold pharmacy practice certificates. This notification must be submitted within 15 days of the date the certificate allowing the pharmaceutical business to operate was issued, or when there are any changes to the list. This is a shorter deadline than the previous 30 days under earlier rules.

Pharmacy chains have similar notification duties and deadlines. Specifically, the chain operator must inform the provincial authority where each pharmacy in the chain is located about the list of practising pharmacists at those sites. Additionally, pharmacy chains must notify the authority if pharmacies are added or removed from the chain, and if there are any rotations of the people responsible for pharmaceutical expertise between pharmacies within the chain.

Medicine Information Activities

Under Circular 31, medicine information can still be given to healthcare professionals through information materials, seminars, and medical representatives.

However, Circular 31 introduces a significant change by removing the need to obtain a certificate for medicine information content before carrying out these activities. Under the new rules, pharmaceutical businesses, representative offices of foreign pharmaceutical companies in Vietnam, and MA holders are now responsible for creating and distributing medicine information materials. These materials must comply with the package inserts for medicines approved by the MOH, the Vietnamese National Drug Formulary, and any related documents and professional instructions issued or recognised by the MOH.

Donald Trump, never one to shy away from drama or diplomacy-via-caps-lock, has slapped a 50% tariff on all Brazilian exports to the United States. The justification? In his own delicate prose: «The treatment of former President Jair Bolsonaro is a disgrace… A witch hunt that must end IMMEDIATELY!»

And just in case anyone thought this was about trade imbalances or economic strategy, Trump made things crystal clear: «Due to Brazil’s insidious attacks on free elections…».

In short, the 50% tariff isn’t about coffee, orange juice, or flip-flops. It’s about a Supreme Court judgment, applying Brazilian law, regarding Brazilian politicians accused of conspiring in a coup d’état. In other words, this is a brazen (and frankly absurd) attempt at judicial intervention via trade war.

Trump, with his characteristic subtlety, offered a solution: manufacture in the U.S., and he’ll look kindly upon Brazil, like a mafia don offering «protection» after smashing your shop window. But what he meant was: consider Bolsonaro innocent, and we’ll talk.

The Brazilian market took the bait

Although the fishy interference in Brazilian affairs was determined from a fish out of the water, the market took the bait: in the first 48 hours after the infamous letter, at least 1500 tons of fish were already held in Brazilian ports, as US buyers suspended their contracts due to uncertainty about the costs upon arrival. The fish market is on alert, as 80% of the exports head to the US, mainly coming from small family-owned industries that distribute the catch from artisanal fishing communities.

The same effect hit other sectors, from orange, honey, and coffee to aircraft.

Brazil’s response and sorcery: don’t mess with us (or our weather)

Naturally, Brazil will not sit quietly sipping caipirinhas while its sovereignty is trampled. Reciprocity is on the table: if Washington raises tariffs, Brasília can do the same. But above all, one thing is sure: Brazil will never tolerate foreign interference in its independent judiciary.

And then, a curious coincidence: right after Trump’s speech, a tornado accompanied by lightning struck the White House grounds. Pure chance? Maybe. Or could it have been the work of Brazilian indigenous shamans, a particularly well-organized group of umbanda practitioners, or simply the fact that, as every Brazilian child knows, God is Brazilian.

Trump might want to check the weather forecast next time before penning another angry letter.

The unpredictable becoming predictable

Trade wars are rarely tidy affairs, but one thing they consistently deliver is chaos (in legal terms, disruption). And when disruption meets contracts, force majeure disputes often end up in court.

At first glance, Trump’s decision to impose a 50% tariff overnight might feel like an unpredictable thunderbolt (quite literally, given the weather at the White House). But here’s the catch: by now, unpredictable tariffs are becoming predictable. When a government with a well-documented love for impulsive economic diplomacy imposes politically motivated tariffs, can anyone claim to be surprised?

In most jurisdictions, force majeure requires that the event be extraordinary, unforeseeable, and beyond the parties’ control. A sudden 50% tariff certainly ticks a few of those boxes, but following a repetition of erratic trade policy, one might argue that businesses should expect what in past times was considered unexpected, especially when dealing with certain jurisdictions or political figures. In other words, Trump’s tariffs might not excuse performance if parties didn’t prepare for exactly this kind of volatility.

This is where good contract drafting comes into play

Savvy businesses are learning that their contracts must go beyond a vague boilerplate clause about “acts of government” or “changes in law.” Instead, they should expressly address the risk of sudden tariff changes, including

  • hardship clauses that allow renegotiation when costs become commercially unreasonable;
  • price adjustment mechanisms linked to tariff thresholds;
  • termination rights triggered by specified levels of customs duties;
  • currency fluctuation provisions (because tariffs rarely travel alone, and currency swings often accompany them).

In short, while no contract can immunize a business from every shock, smart drafting can mean the difference between a commercial headache and a catastrophic breach.

Therefore, tariffs may no longer be an unpredictable storm; they are part of the new predictable landscape. Given that your contract might wake up tomorrow facing ‘IMMEDIATE’ punitive tariffs in all caps, your contract should be ready today.

The unwitting cupid: strengthening EU-Brazil relations

While the tariffs may ruffle trade flows between Brasília and Washington, there’s an unintended silver lining: Trump is proving to be the most efficient matchmaker between Brazil and other markets, such as China and the European Union.

The EU-Brazil relationship, already a flirtation with promising prospects, with relevant progress in the EU-Mercosur Agreement, now seems destined for deeper romance. If Mr. Trump insists on isolating the US from Brazil, the old continent stands ready, with flowers and wine in hand, to pick up where the US left off. After all, Brazilian fish can pair up nicely with champagne, cava and prosecco.

So thank you, Mr. Trump. In your quest to bully Brazil into submission, you may have done more to strengthen transatlantic ties than any EU Commissioner ever could. As they say in Brasília these days: Trump is not a trade warrior. He’s a cupid in disguise.

The recent announcement of a landmark trade agreement framework, following just three months negotiations since President Trump’s tariffs announcement on 2 April 2025, signals a pivotal shift, not merely in bilateral relations, but in the broader architecture of global supply chains.

As a commercial lawyer with exposure to Vietnam since 2007, I have observed the evolving dynamics between the United States and Vietnam through the years, talking to students, entrepreneurs, veterans, diplomats, humans from all walks all life, from both nations and beyond.

You may recall that Vietnam, with the notable exclusion of China, was to be the nation that would encounter the most stringent tariffs imposed by the Trump administration, reaching an astonishing 46%.

The newly forged framework outlines significant reciprocal concessions designed to foster greater trade and investment flows. Granted, pre-April 2 tariffs applied by the USA on Vietnamese goods were lower than what emerges from the framework agreement, but still, it is better than 46%),

The United States has committed to imposing a 20% tariff on most Vietnamese imports, a notable reduction from the previously mooted 46%. However, a substantial 40% tariff will apply to goods re-exported from third countries, with a particular focus on those originating from China.

Vietnam has pledged to open its market to a wide array of US products. Crucially, it has also committed to implementing stringent measures aimed at restricting the transshipment of Chinese goods through its territory, a long-standing concern for Washington.

In a significant win for American exporters, US goods will now enjoy duty-free access to the Vietnamese market, effectively granting “total access”, particularly for large-engine vehicles such as SUVs, as emphatically stated by President Trump (how SUVs are going to circulate in the narrow alleys of Hanoi and Ho Chi Minh City, infested by swarms of mopeds, is a different story).

This agreement is expected to catalyse growth in several key sectors. Electronics, textiles, furniture, energy (especially Liquefied Natural Gas), and agriculture are poised for expansion. US firms specialising in manufacturing technology, energy solutions, and agricultural products are anticipated to be the primary beneficiaries. Furthermore, beyond immediate trade benefits, the agreement is set to reshape investment strategies, encouraging a greater localisation of supply chains within Vietnam. This strategic realignment is also expected to further solidify the already robust US-Vietnam Comprehensive Strategic Partnership.

While the potential upsides are considerable, it is imperative for businesses and investors to approach this new landscape with a clear understanding of the accompanying risks. From my vantage point, I identify several significant execution challenges and structural impediments that require close monitoring.

Enforcement of Transshipment Controls

The most immediate and perhaps formidable risk lies in the effective enforcement of transshipment controls. Vietnam has historically served as a significant assembly point for Chinese-manufactured components. Ensuring that goods originating from China are not merely re-routed through Vietnam to circumvent US tariffs will require exceptionally close monitoring and robust verification mechanisms. The legal and practical complexities of definitively determining the true country of origin for all goods will undoubtedly pose a persistent challenge. As a European citizen, witnessing how the EU-Vietnam Free Trade Agreement (“EVFTA”), which poses an important stress on certificates of origin, I am particularly aware of this matter.

While Vietnam has made remarkable strides in its economic development, certain structural issues could hinder its capacity to scale up high-value manufacturing in the short to medium term. These include:

Legal framework nuances

Vietnam’s legal framework for foreign investment has seen continuous improvements, but legal and cultural complexities and inconsistencies can and do still arise. Navigating the regulatory landscape, particularly with new rules stemming from this agreement and at a time of deep administrative, governmental, digital and legal reforms in Vietnam, will demand expert legal guidance to ensure compliance and mitigate potential fines and disputes. Issues surrounding so-called sublicences for businesses, intellectual property rights enforcement and contract enforceability, whilst improving, still require careful consideration;

Education

The ambition to transform Vietnam into a high-value manufacturing hub necessitates a workforce equipped with advanced skills. While the Vietnamese government prioritises education and workforce development, a significant portion of the current labour force lacks formal training and specialised certifications, let alone a good command of the English language. Bridging this skills gap, particularly in areas like advanced manufacturing, engineering, and digital technologies is a necessity and not just in light of this framework agreement. Companies may need to factor in substantial investment in training and upskilling programmes for their Vietnamese employees.

Infrastructures

Despite considerable investment, Vietnam’s infrastructure, particularly in logistics, energy, and transportation, continues to face bottlenecks. And China – the apparent target of Trump’s tariffs – is stepping in with high-speed trains connecting it to the northern Provinces of Vietnam. An increased volume of high-value manufacturing and trade will place further strain on existing infrastructure. Inadequate port capacity, congested roads, and a reliable energy supply (including for EV charging) are critical concerns that could impact efficiency and increase operational costs for businesses.

Policy divergence

This framework agreement deepens US-Vietnam trade ties and seems to be paving the way for more US investments in Vietnam, but this second aspect seems to run counter to parallel US policy objectives aimed at reshoring manufacturing back to the United States. This potential divergence in strategic priorities could introduce yet another element of unpredictability in the long term, necessitating a flexible and adaptable investment approach. Future shifts in US policy could impact the durability and full extent of the benefits derived from this agreement.

This trade agreement, if finalised and implemented, undoubtedly represents a structural shift in global trade dynamics. It strategically positions Vietnam as an increasingly important high-value manufacturing hub and significantly deepens US engagement in Southeast Asia. We will need time, however, to assess the practical impact of the agreement, observing the efficacy of its implementation, and understanding how Vietnam’s inherent strengths and challenges will ultimately shape its role in the reconfigured global supply chain.

We will also need to see what China, if anything, will do as a countermeasure. In fact, any assessment of Vietnam’s evolving trade landscape would be incomplete without a thorough consideration of China’s influence and strategic posture. President Xi Jinping has consistently championed a vision of a “community of shared future for mankind,” a concept that, while outwardly promoting global cooperation, also subtly underscores a demand for international alignment with Beijing’s interests. In the context of escalating trade tensions, Xi has repeatedly warned that “trade wars have no winners,” advocating for unity against protectionist measures, yet simultaneously implying that nations must ultimately choose sides, either with or against China’s economic and political orbit. Vietnam, despite its historical complexities and occasional maritime disputes with Beijing in the South China Sea (or East Sea, as it is officially called by Hanoi), remains deeply interwoven with China’s economy. China has been Vietnam’s largest trading partner for many years, with significant inflows of Chinese FDI, loans, and project contractors. This economic dependency is particularly evident in various sectors, where Chinese components and materials form a substantial part of Vietnamese manufacturing supply chains. While Vietnam has actively sought to diversify its trade partners and reduce its reliance on China, the sheer scale of the bilateral economic relationship means that disentanglement is a long-term, complex endeavour. Furthermore, China’s influence extends beyond direct trade into crucial regional resources. The Mekong River, a lifeline for millions in Southeast Asia, originates in China, which has constructed numerous upstream dams.

As Vietnam navigates its enhanced trade relationship with the United States, it must simultaneously contend with the enduring economic gravity and strategic ambitions of its northern giant neighbour. Any perceived move by Vietnam to significantly shift away from China could invite retaliatory measures or heightened pressure from Beijing. Businesses investing in Vietnam must not only grasp the intricacies of the US-Vietnam agreement but also meticulously analyse how these developments will intersect with, and potentially be impacted by, the intricate, often delicate, and sometimes fraught relationship between Hanoi and Beijing. Understanding this geopolitical tightrope will be essential for sustainable success in the Vietnamese market. Prudence, informed legal counsel, and a keen eye on evolving geopolitical and economic realities will be paramount for those seeking to capitalise on this transformative new chapter.

Takeaways

  • Tariffs:The US-Vietnam framework agreement marks a significant departure from previous trade dynamics, reducing US tariffs on most Vietnamese imports to 20% (from a mooted 46%) while imposing a 40% tariff on transshipped goods, especially from China.
  • Vietnam’s market opening:Vietnam has committed to duty-free access for a broad range of US products and stricter controls on Chinese goods transiting its territory.
  • Growth / manufacturing shift potential:The agreement is expected to fuel expansion in Vietnamese electronics, textiles, furniture, energy (LNG), and agriculture. It also encourages supply chain localisation within Vietnam (normally more of an assembly point for Chinese products).
  • Execution challenges: Effectively preventing the re-routing of Chinese goods through Vietnam to avoid tariffs will be a complex and demanding task; Despite economic progress, Vietnam faces hurdles in scaling high-value manufacturing due to legal framework nuances (e.g., sublicences, IP enforcement), a skills gap in its workforce (lack of formal training, English proficiency) and infrastructure bottlenecks (logistics, energy, transportation).
  • US policy divergence:The agreement’s encouragement of US investment in Vietnam appears to contradict the broader US policy objective of reshoring manufacturing.
  • China:Businesses must consider China’s significant economic sway over Vietnam, including its position as Vietnam’s largest trading partner, its FDI, and its control over shared resources like the Mekong River. Any major shift by Vietnam away from China could lead to retaliatory measures from Beijing.
  • Uncertainty:This is not a final agreement, so the situation might change. Prudence and informed legal counsel are crucial for businesses navigating this evolving landscape.

Roberto Luzi Crivellini

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    How to negotiate your contract in China

    27 de enero de 2026

    • China
    • Contratos
    • Contratos de distribución

    Executive Summary

    The African Continental Free Trade Area (AfCFTA) remains one of the most ambitious integration projects in the world. Yet, several years into its operational phase, it has not (yet) delivered the structural shift many expected. A recent analysis underscores the gap between political momentum and economic reality: implementation remains uneven, the agreement is still used by only a portion of participating states, and non-tariff barriers and infrastructure deficits continue to dominate the cost of doing business across borders.  For Egypt, the opportunity is still real — but it depends less on treaty headlines and more on enabling conditions: trade logistics, customs efficiency, regulatory convergence, and competitive industrial capacity. 

    Looking Back: The Promise of a Single African Market

    When the AfCFTA was launched, expectations were understandably high. A continent-wide trade framework was supposed to reduce tariffs, facilitate trade in goods and services, and strengthen regional value chains — with the broader goal of moving African economies up the value ladder.

    In my 2022 article, I asked whether AfCFTA could become a game changer for Egypt, given Egypt’s industrial base, strategic geography, and the potential to diversify export markets beyond traditional partners. (For background, see the earlier article here”).

    The Reality Check: Intra-African Trade Remains Structurally Weak

    Several years later, the interim assessment is sobering. As the Frankfurter Allgemeine Zeitung (FAZ) recently put it, AfCFTA is not a “game changer” yet, and only about half of member states currently meet the practical prerequisites to trade under the agreement.

    A deeper reason is structural: no other world region trades so little with itself, and while statistics may undercount informal cross-border flows (especially in food), the overall picture remains unchanged.

    Trade integration cannot deliver transformative outcomes if production, logistics, and institutions do not support scale.

    Implementation Has Been Slow — and Often Symbolic

    Operationalisation did not start with full-scale liberalisation. Instead, the AfCFTA began with a pilot approach: the Guided Trade Initiative (GTI) launched in October 2022, initially with eight states, later joined by additional countries, including Nigeria and South Africa by spring 2025.

    The GTI created valuable learning effects, but it also underlined a key point: early progress was often presented through symbolic deals, while product coverage and volumes remained limited. FAZ highlights that only selected goods could be traded duty-free and that key sectors remained constrained for a long time due to missing or unresolved technical rules.

    A pilot, however, cannot substitute for full operational certainty — the kind businesses need to restructure supply chains and invest.

    Tariffs Are Not the Main Barrier — Trade Costs Are

    AfCFTA is frequently discussed in terms of tariff liberalisation. Yet, evidence suggests that the largest gains do not come from tariffs but from reducing non-tariff barriers and improving trade infrastructure.

    FAZ points to a central reality: tariffs tend to add around 20–30% to intra-African trade costs, whereas non-tariff costs can be far higher — driven by bureaucracy, lack of harmonised standards, inefficient border processes, and transport barriers.

    This is the crux: even with reduced tariffs, trade will not expand meaningfully if goods still cannot move cheaply, quickly, and predictably.

    Integration Complexity and Distributional Politics

    Africa’s integration landscape is shaped by multiple overlapping regional economic communities and trade regimes. This creates legal and administrative complexity — often described as an integration “spaghetti bowl.” FAZ notes the challenge of coordination and the continued fragmentation of rules.

    There is also a political economy dimension. Intra-African trade is heavily influenced by a small number of larger economies — and the distribution of benefits matters. FAZ highlights the dominance of major players (notably South Africa) and the concern that tariff liberalisation alone may entrench existing industrial advantages.

    Where governments expect asymmetric outcomes, resistance often takes the form of delay, narrow implementation, or persistent non-tariff barriers.

    What This Means for Egypt: The Opportunity Is Real — But Conditional

    Egypt’s strategic case for AfCFTA participation remains strong: industrial potential, geographic location, and the opportunity to access and shape growing markets. But the experience so far suggests that the treaty text alone does not generate trade flows.

    For Egypt’s private sector, the decisive factors are practical:

    • predictable and efficient customs clearance and border procedures,
    • logistics corridors and port efficiency,
    • regulatory convergence (standards, certification, compliance),
    • stable access to trade finance and payments,
    • competitive energy and production conditions for manufacturing and processing.

    AfCFTA can support these developments — but it cannot replace them.

    The “Game Changer” Pathway: What Must Happen Next

    FAZ concludes that AfCFTA will only become truly impactful if it is paired with the fundamentals: major infrastructure investment, stronger production and processing capacity, and a credible industrial policy.

    At the same time, Africa faces a classic chicken-and-egg problem: without development there is limited investment appeal; without investment there is limited development.

    For Egypt and its partners, a pragmatic strategy would be to:

    1. treat AfCFTA as a platform for real trade-cost reduction, not only tariff debates;
    2. focus on a limited number of scalable corridors and sectors where regional value chains can realistically grow;
    3. strengthen implementation capacity so that preferences become usable for firms — especially SMEs;
    4. enhance legal certainty and dispute resolution reliability for cross-border commerce.

    Conclusion

    AfCFTA remains a landmark achievement in terms of political commitment. But as of today, it has not yet been the “game changer” many hoped for.

    For Egypt, the key question is no longer whether AfCFTA is visionary — it is. The question is whether governments and businesses can translate it into lower real trade costs, higher competitiveness, and bankable cross-border transactions. If those enabling conditions improve, AfCFTA’s promise can still become commercial reality.

    After “Liberation Day,” many foreign companies offered discounts to American importers to help them offset the tariffs. A few months later, the US Supreme Court declared the «reciprocal» tariffs unlawful, but on the same day, President Trump announced new tariffs. In this article, we provide a practical overview of how to handle various scenarios, shifting from a reactive, unstructured approach to deliberate management of price volatility and trade flows caused by the introduction, adjustment, and removal of tariffs.

    Tariff Sharing agreements

    For a long time, the question has been straightforward: who absorbs the extra customs cost? The exporter? The importer? Both? The question remains important, but today it is incomplete.

    The new scenario, in light of the recent ruling by the US Court of Justice on March 20, 2026, is: what happens if that duty is then canceled and refunded? If the cost was shared between the parties, the benefit of the refund must follow a consistent logic. In the absence of a clear agreement on this point, however, there is a risk of economic misalignment that could compromise the commercial relationship.

    Let’s imagine an Italian winery that sells its products to a US importer. Following the introduction of reciprocal duties, the parties have decided that the exporter will grant an extraordinary discount of 7.5%, explicitly motivated by the need to share the impact of the duty. The commercial relationship continues, volumes remain stable, and the importer avoids passing on the entire increase to the end customer.

    As a result of the Supreme Court ruling (or, in the future, another ruling or administrative decision), the importer obtains a refund of the duties paid during that period.

    If no formal agreements have been made on this point and the documentation refers generically to a «commercial discount» and says nothing about reimbursement, the situation afterward may be difficult to reconstruct and, above all, could lead to commercial tension. As a result, a positive development (the cancellation of the duty and the right to reimbursement) becomes a problematic factor that jeopardizes the relationship.

    Is the exporter entitled to a refund of the discounts granted to mitigate the duties?

    In the absence of a different agreement between the parties, the right to reimbursement belongs to the party who paid the duty, i.e., in most cases, the importer. Therefore, there is a risk that the importer will enjoy a double benefit (the discount and the duty refund), while the exporter will get nothing.

    For this reason, it is essential that the parties do not limit themselves to negotiating prices and discounts, but also establish the consequences of the adoption, modification, or revocation of duties on the contract, including any refunds.

    To achieve this, the first step is to accurately classify and document the discounts granted. If only a «commercial discount» appears in emails, commercial orders, credit notes, and invoices, it will be harder to later argue that this discount was actually an extraordinary, temporary contribution related to the duty. Conversely, if the documentation and contract specify that it is a tariff sharing or tariff mitigation measure, identifying the amounts to be refunded after the fact becomes much simpler.

    The goal is to create a clear view of the trend in discounts and payments so that, if needed, financial flows can be adjusted to align with the original terms of the agreement: if the exporter has helped cover a cost that then, in whole or in part, does not end up materializing, they will be eligible for a refund of the contribution paid.

    The contract will therefore include, in addition to the Tariff Sharing clause, a Tariff Reimbursement Allocation clause, which states that if the importer receives a refund, credit, or any other economic benefit related to the duty for which the exporter has granted a discount, the importer must return the corresponding portion of the benefit to the exporter in full. or proportionally, depending on how the parties intend to distribute risk and incentive.

    Importer’s responsibility to seek reimbursement

    It is unclear whether, in the case of US reciprocal duties, importers can simply file an administrative claim to get a refund or if legal action will be required. The latter seems more probable.

    Generally, obtaining a duty refund involves action, deadlines, documentation, and coordination with brokers and customs consultants. In most cases, the entity controlling the process is the importer (or someone acting on their behalf).

    This raises a sensitive but very real issue: if the importer knows that they will have to invest time and money to obtain a refund, only to then have to share the benefit with the exporter, their incentive to take action may be reduced. To prevent this inertia  the contract should contain an express obligation to take action, set out as a duty of best efforts or commercially reasonable efforts.

    For example, the contract should specify that the importer must inquire about the conditions and time limits of the process, keep relevant documentation, regularly inform the exporter about the progress of the initiatives, and not unilaterally waive or reduce the claim if it affects the exporter’s economic rights.

    Preventive Agreements on Litigation and Cost Allocation

    When reimbursement involves a lawsuit or structured legal action, the obstacles are organizational and financial: who decides if and when to proceed, who selects the lawyers, who pays the costs upfront, how the net recovery is divided, and who has the final say on a settlement. This generally applies to all contracts, not just this case: dispute resolution methods must be addressed and agreed upon before the problem arises.

    Otherwise, the dispute resolution process risks becoming a secondary improvised negotiation at the worst time — when the parties are already under pressure from margins, cash flow, and regulatory uncertainty. As a result, it becomes much harder to reach an agreement.

    How to handle new tariffs and their potential cancellation

    To safeguard against uncertainty, the agreement should be organized into two stages.

    • The first stage regulates the immediate impact of the change in scenario, for example, the introduction of a new tariff or its increase (renegotiation, cost sharing, automatic adjustment : I discussed this in this article).
    • The second stage manages the possible «rollback» (right to reimbursement, process, allocation criteria).

    This approach has a clear benefit: it does not force the parties to discuss every time the tariff regime changes or a decision to cancel tariffs is made. Instead of reacting to market changes, a tool is adopted to manage potential scenarios, which is much more resilient commercially and easier to oversee, as the rules have already been agreed upon.

    This allows the impact of duties to be regulated not as an extraordinary variable, to be agreed upon on a one-time basis, but as a structural, adaptable phenomenon that could last a long time.

    This is why it is crucial to know how to draft contracts that cover both the current situation and potential changes, including any refunds.

    Conclusion: Three practical steps for companies exporting to the US

    The first is to agree on the consequences for the contract of the introduction of a new duty, increasing it, or revoking it (renegotiation, cost sharing, automatic price adjustment, right to share the refund).

    The second is to clearly document any discount granted to offset a duty. If it remains a generic «commercial discount,» the right to a refund if reimbursement occurs will be much harder to enforce.

    The third step is to determine what happens if the duty is canceled or revoked: the importer’s responsibility to take action to get a refund, manage the administrative process or litigation, how to divide costs, who oversees the activities of consultants and lawyers, and how the recovered funds will be allocated.

    How do you approach negotiating a trade agreement with China?

    Based on my experience, let’s examine the issues to be addressed and the main questions to ask, taking the negotiation of a trade distribution agreement as a practical example.

    Let’s start with the first issue that is important to clarify.

    Nice Business Card – But Who Is This Guy?

    Business cards, websites, printed or digital brochures, presentations, and any other materials shared in English have no official value in China.

    The company name of the counterparty and the first and last names of people representing it or acting on its behalf, written in English, are only fictitious names.

    To be certain of the company’s data and the identity of the persons, it is necessary to ask for the information in Chinese, with particular reference to the company’s business license (equivalent to the Companies House or Chamber of Commerce’s excerpt), from which the name, corporate purpose, registered and paid-up share capital, and the name of the legal representative can be inferred.

    The data can then be verified by accessing the portal of the State Administration of Industry and Commerce (SAIC) of the province where the Chinese party is based.

    This first verification is essential to ensure that you do not waste time or even run into scams (here’s an in-depth article on Legalmondo’s blog).

    If You Don’t Own Your Trademark, Someone Else Will – and Charge You for It

    Trademark First, Trade Later. China operates on a first-to-file system for trademarks, which means that the first person or company to register a trademark – not necessarily the original creator or most famous user – gains the legal rights to it. This creates a serious risk: if you haven’t registered your trademark in China, someone else might do it before you, and then either use it freely or demand a hefty ransom to give it back. Even high-profile figures like Elon Musk and Michael Jordan have been entangled in costly and protracted disputes with Chinese trademark squatters. In many cases, getting the mark back is highly complicated, and sometimes legally impossible.

    To avoid this, register your trademarks early, even before entering the Chinese market. File directly with the China Trademark Office (CTMO) and don’t stop at the English version — consider registering a Chinese character version as well, since that is how your brand will often be known locally.

    Once that base is covered, clearly state in your contract that your Chinese partner is not allowed to file a registration of any of your trademarks in China, in Latin or Chinese characters, and that he will use trademarks and IP rights in strict conformance to the contract and your instructions.

    For a deeper dive into how to effectively protect your IP rights in China, check out our detailed article on the Legalmondo blog.

    Contracts can wait. First, get on the same page

    When negotiating with a Chinese partner, it’s often a mistake to begin the conversation by exchanging contract drafts. Instead, focus first on the substance — the relationship’s commercial and technical terms. Using a clear checklist of key discussion points (such as products, pricing, delivery terms, technical standards, after-sales support, exclusivity, duration, payment terms, etc.) helps ensure that both sides are aligned on what really matters. Take detailed notes and keep minutes of the discussions, especially where and when consensus is reached, and make sure those minutes are circulated and expressly agreed upon. Once substantial agreement has been achieved on the main terms, this memo can then be handed over to your lawyer, who will translate the business understanding into clear and coherent contractual language. This approach saves tons of time, as it helps avoid unnecessary back-and-forth on legal language before the core deal is in place.

    Think Your NDA Covers You in China? Think Again

    Yes, they are—and often underestimated. A well-drafted Non-Disclosure Agreement (NDA) is essential when the parties plan to exchange confidential information, such as technological know-how, commercial strategies, supplier data, or client lists. Especially in the early phases of negotiation or cooperation, before a main contract is signed, an NDA helps protect intellectual and business assets.

    However, as with all contracts in China, a generic NDA template copied from other jurisdictions will likely be of limited use. To be truly effective, the NDA must be adapted to the specifics of the Chinese legal environment. This includes ensuring that it is enforceable in China: the NDA should include the proper dispute resolution mechanism (see below on why you should consider applying Chinese law and litigating in China), and it must specify clear, valid, and proportionate penalties for breach. In Chinese practice, stating specific contractual penalties (liquidated damages) is often more effective than vague references to compensation, as courts and arbitrators in China tend to enforce these more reliably if they are reasonable.

    While a good NDA is useful, it often falls short in China’s manufacturing and sourcing landscape. This is where the NNN Agreement – standing for Non-Disclosure, Non-Use, and Non-Circumvention – becomes critical. Unlike standard NDAs that primarily focus on confidentiality, an NNN Agreement is designed to address the unique risks of doing business in China. It prevents the recipient from not only disclosing confidential information but also from using it for their benefit or bypassing the disclosing party to work directly with suppliers, clients, or partners. Which, in China, is a very real risk.

    This broader scope is vital when dealing with Chinese manufacturers or intermediaries, who may otherwise be tempted to replicate products or contact customers directly or through third parties. As seen with the NDA, also the NNN Agreement must be drafted in Chinese, governed by Chinese law, and enforceable in Chinese courts -otherwise, it may offer little real protection.

    Joint venture? Easy, Cowboy

    A joint venture is often the first proposal that comes up when negotiating with a potential Chinese partner. It seems appealing: sharing risks and investments, accessing the local market with an ally, leveraging their knowledge and network of contacts. But the reality is often very different from what it appears to be.

    A joint venture is a complex, expensive, and rigid corporate structure that requires significant investments of money, time, and human resources, as well as the ability to continuously manage often divergent interests among the partners. The vast majority of Sino-Foreign JVs have gone wrong, or will go wrong. Or very wrong. First and foremost, because the JV is usually managed by the Chinese partner, and exercising effective control over the company’s operations is a very challenging undertaking.

    Before going down this road, it is essential to ask yourself a few questions: Is the joint venture really indispensable for developing this business in China? (Spoiler: generally, no). Are there less restrictive and risky alternatives, such as a distribution agreement or a licensing agreement? (Yes, almost always). And above all: how well do we really know our potential partner?

    A joint venture should only be considered if it is strictly necessary for the project’s development, after carefully verifying the commercial viability and the reliability of the Chinese partner, and ensuring the ability to maintain effective control over the JV’s operations.

    It is better to start with simpler and more flexible forms of collaboration to test the market and the relationship with the other party before committing to such a demanding investment. Otherwise, the mirage of the joint venture risks turning into a nightmare that can be very costly.

    Memorandum of Understanding: Where Good Intentions Become Bad Contracts

    A Memorandum of Understanding (MoU) is a helpful tool at the early stage of a commercial relationship. It serves as a roadmap for future negotiations, where the parties outline the main principles and intentions that will guide the drafting of the final agreements. When used correctly, an MoU can significantly facilitate negotiations by ensuring that both sides commit to negotiating the agreement in good faith and share a common understanding of key points such as pricing models, territorial scope, exclusivity, milestones, budget, or performance expectations.

    However, an MoU must be used for what it is: a preparatory document, not a binding contract. Care must be taken to avoid ambiguity and unintended commitments. The text should clearly specify that the parties remain free to conclude – or not – the final agreements and which clauses are non-binding – such as the commercial framework or indicative timelines – and which provisions are binding, typically confidentiality, exclusivity during the negotiations (if agreed), governing law, and dispute resolution. A poorly drafted MoU, which includes overly precise and complete terms, can be misinterpreted as a final agreement, creating unnecessary legal risk. So yes, MoUs are valuable – but only when used correctly. If you’d like to know more, go deeper by reading this article.

    Bad Drafts, Big Headaches, Poor results

    Draft agreements used in China are often copied and pasted from incomplete, superficial, poorly organised templates written in bad English, which often do not match the Chinese version of the contract.

    Correcting and integrating these drafts is complicated and more time-consuming than starting from a good template, with suboptimal results.

    It would be better to propose a consistently constructed text and ask the other party to propose any changes and additions to this draft.

    Your Western Contract Template Won’t Work Here

    Even if an English-language contract is perfectly valid, there are many reasons why using contract templates built for other countries in the Chinese market is inadvisable.

    The first is the fact that Anglo-Saxon-based agreements, such as those for the U.S., refer to a common law system (which is based on judicial decisions and case law precedents) that is very different from that of civil law countries (such as China and Italy), which derives from the Roman legal tradition, based on a codified set of written laws.

    It follows that the layout of an agreement on the Anglo-Saxon model is different, much more detailed, and wordy than that of a typical agreement based on a civil law system. Since contract negotiations in China are generally lengthy and complex, working on redundant and complicated text at the outset does not help.

    If we stick to the example of a distribution contract, it should be added that it is advisable to apply Chinese law to provide for arbitration based in China (e.g., at CIETAC) or in Hong Kong or Singapore (third countries, where, however, the costs of the procedure increase significantly) as the mode of dispute resolution. So, the contract should be built on a model that conforms to the law that will apply to the relationship.

    Home Court Advantage Won’t Help You in China. In fact, quite the opposite

    This is a typical point of disagreement in the negotiation of an international contract: the parties aim to have the law of their own country apply, and to stipulate that any disputes be adjudicated by their domestic courts.

    In our case, insisting on the application of Italian (or any other foreign) law and state court is not a good idea: it should be considered, in fact, that a distribution agreement is carried out, for the vast majority, in the country where the distributor operates and where the products are sold (in our case, in mainland China).

    In disputes, the parties’ (particularly the manufacturer’s) interest is to obtain a quick decision by the adjudicating body, especially if situations requiring immediate protection (such as unfair conduct or counterfeiting of trademarks and patents by the distributor) are ongoing.

    None of this is possible if one goes to an Italian judge (with lengthy litigation time and the need then for a complex and costly process to recognise and enforce the decision in China); on the contrary,  an arbitration in China, applying Chinese law, allows one to reach a decision quickly (on average 6-9 months) and, if necessary, also to obtain urgent measures to stop any unfair conduct.

    Chinese Law Isn’t a Black Box (If You Know What You’re Doing)

    The lawyer assisting you should know it.

    Therefore, it is not a leap in the dark, and one should not fear surprises.

    In addition, it should be remembered that an agreement is primarily based on the covenants that the parties have written in the contract; therefore, if the contract has been well drafted, the rules to be applied are clear.

    Finally, if we consider distribution agreements, keep in mind that they are a framework contract, within which a series of separate product sales contracts are concluded. If both countries are contracting parties to the 1980 Vienna Convention on the International Sale of Goods (CISG), then the uniform, clear, and balanced rules of the convention apply automatically, just don’t opt out!

    One Contract, Two Languages

    The contract is also valid in English only.  However, it is undoubtedly advisable to draft a Chinese version with facing text.

    This is for several reasons: first, it prevents the Chinese party from having to arrange for a translation of the text during negotiations for its own internal use (top managers often do not speak English), thus slowing down the various steps of negotiations.

    Also, to ensure that the Chinese side fully understands the agreement’s content and to avert misunderstandings (real or instrumental) about the interpretation of certain covenants.

    Finally, it should be borne in mind that if the contract were later to be used before a court or administrative authority in China, the only language admitted would be Chinese; for this reason, it is better to have already a text agreed and signed by the parties in Chinese as well, rather than having to prepare a unilateral translation later.

    Sign. And chop

    Does the contract need to bear the company’s official stamp? Yes, and this point is absolutely crucial. In China, a company’s official «chop» (the red-ink stamp) is equivalent to a signature and is conclusive proof that the person signing the contract has the authority to represent the company. A signature alone, even from someone with an important-sounding title, may not be sufficient if it is not accompanied by the official chop. Without it, the contract might later be challenged or even considered void. Before signing, always verify that the stamp used matches the one registered with the company’s business license or official corporate records, and ensure that the stamp is applied on every page or at least on the signature page, in line with local practice.

    Don’t Let Your Contract Collect Dust

    Things change fast, especially in China. New products are added, market conditions evolve, people leave the company, new competitors emerge on the horizon, and so on. Companies constantly adapt to the new conditions, and so must the contract.

    Any change in the relationship should be formalized correctly. To avoid misunderstandings and disputes, it’s advisable to include an integration clause in the contract, specifying that any amendments or additions will only be valid if agreed in writing, signed by the parties’ authorized representatives, and annexed as an addendum to the original agreement.

    It’s not enough to include this clause – you must follow it consistently. If things change, agreements reached verbally, through Wechat messages, and through email exchanges may make things complicated if they are not formalised adequately according to the procedure set out in the original contract.

    If you’d like to go deeper, check out this article.

    Son bastante frecuentes las relaciones comerciales con agentes o distribuidores que duran años y sin ningún documento firmado. Y, cuidado, porque ya sabemos que un contrato puede existir incluso verbalmente.

    La inexistencia de un contrato escrito va a añadir dificultades en una posible reclamación, por eso, lo que se haga entre la decisión de ponerle fin y el momento de la reclamación es muy importante. Recuerda: “cualquier cosa que escribas será usada en tu contra”.

    La decisión de terminar una relación comercial es un momento muy delicado al que, no sé por qué, a los abogados no se nos invita. Os doy algunos ejemplos (todos reales) en los que las empresas o algún empleado con la mejor voluntad escribió al agente/distribuidor. Todos fueron luego muy perjudiciales para la empresa:

     

    Decir “Ponemos fin a nuestra relación comercial” cuando la estrategia será defender que dicha relación comercial no existe, sino que son contratos independientes y encadenados (por ejemplo, suministro en lugar de contrato continuado de distribución; consecuencias de indemnización muy relevantes).

    “Usted ya no representa a nuestra sociedad”, lo que puede ser una prueba de que antes sí lo hacía.

    “A partir del día X usted ya no puede actuar en nombre de nuestra sociedad” que probaría que antes sí podía actuar en su nombre.

    “Usted no puede asistir a la feria de X en nuestro nombre”. Una forma de confirmar que entre las competencias del agente/distribuidor estaba participar en ferias y probablemente acredita los clientes obtenidos.

    “Las ventas promovidas por Ud. se han visto reducidas significativamente en el año N”. Cuando no hay contrato escrito ni otra forma de documentarlo, imputar un incumplimiento de una obligación que no está clara, puede ser contraproducente.

    Decir “No estás llevando a cabo una promoción activa de nuestros productos” para añadir a continuación: “le instamos a que deje de promocionar la venta de nuestros productos”.

    “Usted deja de ser nuestro representante exclusivo”, lo que prueba un tipo de relación (representación/agente) y un acuerdo tácito o expreso (“exclusividad”)

    “Hemos designado a otro representante en su zona”, que demuestra que el agente/distribuidor tenía una zona asignada y “representaba”.

    “A partir de este momento los pedidos serán asumidos por X” que, igualmente confirma un tipo de relación.

    En resumen: a partir del momento en el que la empresa valora poner fin a una relación comercial, sobre todo cuando no está escrita y antes de enviar cualquier carta, es conveniente pensar bien en la estrategia de cara a una posible reclamación. Es el momento más adecuado para asesorarse y evitar sorpresas. Cualquier comunicación que no esté alineada con esa estrategia diseñada desde el principio solo podrá aportar confusión y problemas.

    Remember the USA – EU agreement on 15% tariffs? I wrote that with a negotiator like Trump the game is never over (article here) and—after the recent interlude featuring a threat of 100% tariffs on pharmaceuticals—the U.S. government has announced the imposition of an overall 107% duty on Italian pasta, which could take effect on January 1, 2026.

    Where this new duty comes from

    The antidumping investigation was launched by the U.S. Department of Commerce at the request of certain competing American companies and is based on a 1996 antidumping order that allows for periodic reviews of imports of Italian pasta. The Department of Commerce conducts these checks annually to assess whether Italian producers are selling pasta at prices lower than the U.S. domestic market, a practice known as “dumping.”

    Companies involved in the investigation

    The Department of Commerce selected two sample companies for in-depth analysis, defined as “mandatory respondents”: La Molisana and Pastificio Lucio Garofalo. According to the official document published by the U.S. administration, for the period from July 1, 2023 to June 30, 2024, both companies allegedly sold their products below market prices, resulting in the imposition of a duty of 91.74%.

    U.S. authorities justified this percentage by claiming the two companies did not provide complete or compliant information as requested by the Department and were therefore insufficiently cooperative during the investigation. What is very important is that, in addition to the two companies directly examined, the additional 91.74% duty is also applied to numerous other Italian producers not individually reviewed. This methodology, while formally permitted under U.S. law as an exception, is being applied without any direct verification of the other companies.

    Next steps in the procedure

    Italy’s Ministry of Foreign Affairs moved immediately, formally intervening in the proceeding as an “interested party” through the Italian Embassy in Washington. The Foreign Ministry is working in close coordination with the companies concerned and, in concert with the European Commission, to persuade the U.S. Department to revise the provisional duties.

    The two companies involved (La Molisana and Garofalo) can submit documentation to contest the dumping allegations. However, if dumping is confirmed, the Department of Commerce will instruct Customs to apply antidumping duties on goods sold and entered into U.S. commerce.

    The preliminary nature of this determination means there is still room to change the decision before it becomes final.

    Possible effective date

    The new super-duty of 91.74%, which will be added to the existing 15% tariff for a total of 107%, is scheduled to take effect on January 1, 2026. This date therefore represents a crucial deadline for all ongoing diplomatic and legal actions.

    If confirmed, the economic impact would be significant: in 2024, Italian pasta exports to the United States reached a value of €671 million according to Coldiretti, accounting for nearly 17% of the sector’s total exports. A 107% duty would risk seriously undermining competitiveness in one of the most important markets for Italian agri-food products.

     What to do between now and January 1, 2026?

    At this stage, the entry into force of the new duty depends on the outcome of the ongoing procedure: given what has happened in recent months, and the political use the U.S. administration has made of tariffs—well beyond their technical function—it is reasonable to be pessimistic.

    So, what to do? In recent months we have seen companies react to the uncertainty over the fate of the tariffs in three ways:

    • Some rushed to ship as many products as possible before the potential effective date of the duty;
    • Some granted—upfront—discounts equivalent to the threatened duty, in case it came into force;
    • Some suspended orders, pending definitive news on the impact of the duties.

    These are all  valid options, but other effective tools for managing the uncertainty caused by the flurry of announcements, negotiations, and threats from the U.S. administration should not be forgotten: the risk of new duties being introduced, or existing ones being increased, can be managed in the contract by agreeing with the U.S. importer how any tariff change will affect the product.

    The parties can stipulate, for example, that the increase will be split equally; or that the importer will bear it beyond a certain threshold; or that if the duty exceeds a certain level, the contracts may be terminated. You can find a deeper dive in this article.

    The only certainty is that trade relations with the U.S. will stay unpredictable for a long time, and it’s vital to carefully manage the risk factors involved in selling products there. Right now, the focus is on tariffs and prices, and I encourage you to take this chance to thoroughly review existing agreements and assess whether—and how—other important points are addressed that could entail significant liabilities: we discuss them, very practically, in this book.

    On 29 June 2025, the Vietnamese government introduced Decree No. 163/2025/ND-CP (Decree 163). This decree provides detailed guidance on how the updated Law on Pharmacy will be implemented.

    Like the amended Law on Pharmacy, Decree 163 came into effect on 1 July 2025, replacing the previous Decree No. 54/2017/ND-CP (Decree 54). The new decree sets out comprehensive rules for key aspects of managing pharmaceuticals, including:

    • Pharmacy practice certificates
    • Certificates allowing pharmaceutical businesses to operate
    • Import and export of medicines and drug ingredients
    • Good Manufacturing Practice (GMP) inspections of overseas manufacturers
    • Recalling medicines and drug ingredients
    • Certificates for medicine advertising content
    • Medicine price management

    Key Changes in Decree 163

    Here are some important changes and additions introduced by Decree 163:

    Destroying Specially Controlled Medicines

    You no longer need to get approval from the relevant authority before destroying narcotic, psychotropic, and precursor drugs, or pharmaceutical ingredients that are narcotic or psychotropic substances or precursors used in medicines. Instead, you just need to provide notification at least seven working days in advance. This notification must include the planned destruction date and a detailed list of items to be destroyed.

    E-commerce in Pharmaceutical

    Pharmaceutical businesses that sell products online must openly display the following information to ensure transparency and consumer safety:

    • Their certificate allowing them to operate as a pharmaceutical business.
    • The pharmacy practice certificate of the person responsible for pharmaceutical expertise.
    • Information about the medicines themselves.

    Shelf-Life Rules for Imported Products

    For medicines and ingredients with a total shelf life of nine months or less, at least one-third of their shelf life must remain when they clear customs. Medicines with a shelf life of 30 days or less must still be within their shelf life at the time of customs clearance.

    Controlling Imported Products

    All medicines with marketing authorisation (MA) are subject to import control, except for:

    • Medicines needed for preventing and treating Group A infectious diseases that have been declared epidemics, as per the Law on Prevention and Control of Infectious Diseases.
    • Medicines with a shelf life of less than 30 days.

    Importers must inform the provincial People’s Committee at least five working days before making a customs declaration. The People’s Committee can then issue a written notice of non-compliance to the customs authority within five working days of receiving this notification.

    Medicine Advertising

    Decree 163 adds a process that allows an approved medicine advertising certificate to be adjusted for certain changes (such as a change to the MA holder or manufacturer information). This means you don’t have to go through the entire initial registration process for medicine advertising content again, as was required under the previous rules.

    Medicine Price Management

    Businesses must announce or re-announce wholesale prices, similar to the medicine price declaration process under Decree 54. Some medicines are exempt from this requirement, including those provided free of charge for emergency responses, national health programmes, humanitarian aid, clinical trials, scientific research, or exhibition purposes, and medicines carried as personal luggage.

    The Ministry of Health (MOH) can make recommendations if the announced or re-announced price is significantly higher than similar medicines already on the market. This includes situations where:

    • The announced or re-announced wholesale price of the medicine is higher than the highest price of similar medicines.
    • The price difference is more than 35% (for medicines priced under VND 1 million) or 15% (for medicines priced at VND 1 million and above) compared to winning bid prices in tenders.
    • The announced or re-announced price is higher than prices in the country of origin or other markets (if there’s no similar product in Vietnam).
    • When such differences are found, the MOH issues a formal recommendation to the announcing business and publishes it online for transparency and accountability.

    Further Guidance in New Circular

    On 1 July 2025, the MOH issued Circular No. 31/2025/TT-BYT (Circular 31), which further details how the amended Law on Pharmacy and Decree 163 should be implemented. Circular 31 officially replaces Circular No. 07/2018/TT-BYT and Decree 54 and came into effect immediately.

    Key provisions of Circular 31 include:

    Notification of Practising Pharmacists

    Pharmaceutical businesses that are not part of a pharmacy chain must inform the relevant authority of a list of people currently working at the business who hold pharmacy practice certificates. This notification must be submitted within 15 days of the date the certificate allowing the pharmaceutical business to operate was issued, or when there are any changes to the list. This is a shorter deadline than the previous 30 days under earlier rules.

    Pharmacy chains have similar notification duties and deadlines. Specifically, the chain operator must inform the provincial authority where each pharmacy in the chain is located about the list of practising pharmacists at those sites. Additionally, pharmacy chains must notify the authority if pharmacies are added or removed from the chain, and if there are any rotations of the people responsible for pharmaceutical expertise between pharmacies within the chain.

    Medicine Information Activities

    Under Circular 31, medicine information can still be given to healthcare professionals through information materials, seminars, and medical representatives.

    However, Circular 31 introduces a significant change by removing the need to obtain a certificate for medicine information content before carrying out these activities. Under the new rules, pharmaceutical businesses, representative offices of foreign pharmaceutical companies in Vietnam, and MA holders are now responsible for creating and distributing medicine information materials. These materials must comply with the package inserts for medicines approved by the MOH, the Vietnamese National Drug Formulary, and any related documents and professional instructions issued or recognised by the MOH.

    Donald Trump, never one to shy away from drama or diplomacy-via-caps-lock, has slapped a 50% tariff on all Brazilian exports to the United States. The justification? In his own delicate prose: «The treatment of former President Jair Bolsonaro is a disgrace… A witch hunt that must end IMMEDIATELY!»

    And just in case anyone thought this was about trade imbalances or economic strategy, Trump made things crystal clear: «Due to Brazil’s insidious attacks on free elections…».

    In short, the 50% tariff isn’t about coffee, orange juice, or flip-flops. It’s about a Supreme Court judgment, applying Brazilian law, regarding Brazilian politicians accused of conspiring in a coup d’état. In other words, this is a brazen (and frankly absurd) attempt at judicial intervention via trade war.

    Trump, with his characteristic subtlety, offered a solution: manufacture in the U.S., and he’ll look kindly upon Brazil, like a mafia don offering «protection» after smashing your shop window. But what he meant was: consider Bolsonaro innocent, and we’ll talk.

    The Brazilian market took the bait

    Although the fishy interference in Brazilian affairs was determined from a fish out of the water, the market took the bait: in the first 48 hours after the infamous letter, at least 1500 tons of fish were already held in Brazilian ports, as US buyers suspended their contracts due to uncertainty about the costs upon arrival. The fish market is on alert, as 80% of the exports head to the US, mainly coming from small family-owned industries that distribute the catch from artisanal fishing communities.

    The same effect hit other sectors, from orange, honey, and coffee to aircraft.

    Brazil’s response and sorcery: don’t mess with us (or our weather)

    Naturally, Brazil will not sit quietly sipping caipirinhas while its sovereignty is trampled. Reciprocity is on the table: if Washington raises tariffs, Brasília can do the same. But above all, one thing is sure: Brazil will never tolerate foreign interference in its independent judiciary.

    And then, a curious coincidence: right after Trump’s speech, a tornado accompanied by lightning struck the White House grounds. Pure chance? Maybe. Or could it have been the work of Brazilian indigenous shamans, a particularly well-organized group of umbanda practitioners, or simply the fact that, as every Brazilian child knows, God is Brazilian.

    Trump might want to check the weather forecast next time before penning another angry letter.

    The unpredictable becoming predictable

    Trade wars are rarely tidy affairs, but one thing they consistently deliver is chaos (in legal terms, disruption). And when disruption meets contracts, force majeure disputes often end up in court.

    At first glance, Trump’s decision to impose a 50% tariff overnight might feel like an unpredictable thunderbolt (quite literally, given the weather at the White House). But here’s the catch: by now, unpredictable tariffs are becoming predictable. When a government with a well-documented love for impulsive economic diplomacy imposes politically motivated tariffs, can anyone claim to be surprised?

    In most jurisdictions, force majeure requires that the event be extraordinary, unforeseeable, and beyond the parties’ control. A sudden 50% tariff certainly ticks a few of those boxes, but following a repetition of erratic trade policy, one might argue that businesses should expect what in past times was considered unexpected, especially when dealing with certain jurisdictions or political figures. In other words, Trump’s tariffs might not excuse performance if parties didn’t prepare for exactly this kind of volatility.

    This is where good contract drafting comes into play

    Savvy businesses are learning that their contracts must go beyond a vague boilerplate clause about “acts of government” or “changes in law.” Instead, they should expressly address the risk of sudden tariff changes, including

    • hardship clauses that allow renegotiation when costs become commercially unreasonable;
    • price adjustment mechanisms linked to tariff thresholds;
    • termination rights triggered by specified levels of customs duties;
    • currency fluctuation provisions (because tariffs rarely travel alone, and currency swings often accompany them).

    In short, while no contract can immunize a business from every shock, smart drafting can mean the difference between a commercial headache and a catastrophic breach.

    Therefore, tariffs may no longer be an unpredictable storm; they are part of the new predictable landscape. Given that your contract might wake up tomorrow facing ‘IMMEDIATE’ punitive tariffs in all caps, your contract should be ready today.

    The unwitting cupid: strengthening EU-Brazil relations

    While the tariffs may ruffle trade flows between Brasília and Washington, there’s an unintended silver lining: Trump is proving to be the most efficient matchmaker between Brazil and other markets, such as China and the European Union.

    The EU-Brazil relationship, already a flirtation with promising prospects, with relevant progress in the EU-Mercosur Agreement, now seems destined for deeper romance. If Mr. Trump insists on isolating the US from Brazil, the old continent stands ready, with flowers and wine in hand, to pick up where the US left off. After all, Brazilian fish can pair up nicely with champagne, cava and prosecco.

    So thank you, Mr. Trump. In your quest to bully Brazil into submission, you may have done more to strengthen transatlantic ties than any EU Commissioner ever could. As they say in Brasília these days: Trump is not a trade warrior. He’s a cupid in disguise.

    The recent announcement of a landmark trade agreement framework, following just three months negotiations since President Trump’s tariffs announcement on 2 April 2025, signals a pivotal shift, not merely in bilateral relations, but in the broader architecture of global supply chains.

    As a commercial lawyer with exposure to Vietnam since 2007, I have observed the evolving dynamics between the United States and Vietnam through the years, talking to students, entrepreneurs, veterans, diplomats, humans from all walks all life, from both nations and beyond.

    You may recall that Vietnam, with the notable exclusion of China, was to be the nation that would encounter the most stringent tariffs imposed by the Trump administration, reaching an astonishing 46%.

    The newly forged framework outlines significant reciprocal concessions designed to foster greater trade and investment flows. Granted, pre-April 2 tariffs applied by the USA on Vietnamese goods were lower than what emerges from the framework agreement, but still, it is better than 46%),

    The United States has committed to imposing a 20% tariff on most Vietnamese imports, a notable reduction from the previously mooted 46%. However, a substantial 40% tariff will apply to goods re-exported from third countries, with a particular focus on those originating from China.

    Vietnam has pledged to open its market to a wide array of US products. Crucially, it has also committed to implementing stringent measures aimed at restricting the transshipment of Chinese goods through its territory, a long-standing concern for Washington.

    In a significant win for American exporters, US goods will now enjoy duty-free access to the Vietnamese market, effectively granting “total access”, particularly for large-engine vehicles such as SUVs, as emphatically stated by President Trump (how SUVs are going to circulate in the narrow alleys of Hanoi and Ho Chi Minh City, infested by swarms of mopeds, is a different story).

    This agreement is expected to catalyse growth in several key sectors. Electronics, textiles, furniture, energy (especially Liquefied Natural Gas), and agriculture are poised for expansion. US firms specialising in manufacturing technology, energy solutions, and agricultural products are anticipated to be the primary beneficiaries. Furthermore, beyond immediate trade benefits, the agreement is set to reshape investment strategies, encouraging a greater localisation of supply chains within Vietnam. This strategic realignment is also expected to further solidify the already robust US-Vietnam Comprehensive Strategic Partnership.

    While the potential upsides are considerable, it is imperative for businesses and investors to approach this new landscape with a clear understanding of the accompanying risks. From my vantage point, I identify several significant execution challenges and structural impediments that require close monitoring.

    Enforcement of Transshipment Controls

    The most immediate and perhaps formidable risk lies in the effective enforcement of transshipment controls. Vietnam has historically served as a significant assembly point for Chinese-manufactured components. Ensuring that goods originating from China are not merely re-routed through Vietnam to circumvent US tariffs will require exceptionally close monitoring and robust verification mechanisms. The legal and practical complexities of definitively determining the true country of origin for all goods will undoubtedly pose a persistent challenge. As a European citizen, witnessing how the EU-Vietnam Free Trade Agreement (“EVFTA”), which poses an important stress on certificates of origin, I am particularly aware of this matter.

    While Vietnam has made remarkable strides in its economic development, certain structural issues could hinder its capacity to scale up high-value manufacturing in the short to medium term. These include:

    Legal framework nuances

    Vietnam’s legal framework for foreign investment has seen continuous improvements, but legal and cultural complexities and inconsistencies can and do still arise. Navigating the regulatory landscape, particularly with new rules stemming from this agreement and at a time of deep administrative, governmental, digital and legal reforms in Vietnam, will demand expert legal guidance to ensure compliance and mitigate potential fines and disputes. Issues surrounding so-called sublicences for businesses, intellectual property rights enforcement and contract enforceability, whilst improving, still require careful consideration;

    Education

    The ambition to transform Vietnam into a high-value manufacturing hub necessitates a workforce equipped with advanced skills. While the Vietnamese government prioritises education and workforce development, a significant portion of the current labour force lacks formal training and specialised certifications, let alone a good command of the English language. Bridging this skills gap, particularly in areas like advanced manufacturing, engineering, and digital technologies is a necessity and not just in light of this framework agreement. Companies may need to factor in substantial investment in training and upskilling programmes for their Vietnamese employees.

    Infrastructures

    Despite considerable investment, Vietnam’s infrastructure, particularly in logistics, energy, and transportation, continues to face bottlenecks. And China – the apparent target of Trump’s tariffs – is stepping in with high-speed trains connecting it to the northern Provinces of Vietnam. An increased volume of high-value manufacturing and trade will place further strain on existing infrastructure. Inadequate port capacity, congested roads, and a reliable energy supply (including for EV charging) are critical concerns that could impact efficiency and increase operational costs for businesses.

    Policy divergence

    This framework agreement deepens US-Vietnam trade ties and seems to be paving the way for more US investments in Vietnam, but this second aspect seems to run counter to parallel US policy objectives aimed at reshoring manufacturing back to the United States. This potential divergence in strategic priorities could introduce yet another element of unpredictability in the long term, necessitating a flexible and adaptable investment approach. Future shifts in US policy could impact the durability and full extent of the benefits derived from this agreement.

    This trade agreement, if finalised and implemented, undoubtedly represents a structural shift in global trade dynamics. It strategically positions Vietnam as an increasingly important high-value manufacturing hub and significantly deepens US engagement in Southeast Asia. We will need time, however, to assess the practical impact of the agreement, observing the efficacy of its implementation, and understanding how Vietnam’s inherent strengths and challenges will ultimately shape its role in the reconfigured global supply chain.

    We will also need to see what China, if anything, will do as a countermeasure. In fact, any assessment of Vietnam’s evolving trade landscape would be incomplete without a thorough consideration of China’s influence and strategic posture. President Xi Jinping has consistently championed a vision of a “community of shared future for mankind,” a concept that, while outwardly promoting global cooperation, also subtly underscores a demand for international alignment with Beijing’s interests. In the context of escalating trade tensions, Xi has repeatedly warned that “trade wars have no winners,” advocating for unity against protectionist measures, yet simultaneously implying that nations must ultimately choose sides, either with or against China’s economic and political orbit. Vietnam, despite its historical complexities and occasional maritime disputes with Beijing in the South China Sea (or East Sea, as it is officially called by Hanoi), remains deeply interwoven with China’s economy. China has been Vietnam’s largest trading partner for many years, with significant inflows of Chinese FDI, loans, and project contractors. This economic dependency is particularly evident in various sectors, where Chinese components and materials form a substantial part of Vietnamese manufacturing supply chains. While Vietnam has actively sought to diversify its trade partners and reduce its reliance on China, the sheer scale of the bilateral economic relationship means that disentanglement is a long-term, complex endeavour. Furthermore, China’s influence extends beyond direct trade into crucial regional resources. The Mekong River, a lifeline for millions in Southeast Asia, originates in China, which has constructed numerous upstream dams.

    As Vietnam navigates its enhanced trade relationship with the United States, it must simultaneously contend with the enduring economic gravity and strategic ambitions of its northern giant neighbour. Any perceived move by Vietnam to significantly shift away from China could invite retaliatory measures or heightened pressure from Beijing. Businesses investing in Vietnam must not only grasp the intricacies of the US-Vietnam agreement but also meticulously analyse how these developments will intersect with, and potentially be impacted by, the intricate, often delicate, and sometimes fraught relationship between Hanoi and Beijing. Understanding this geopolitical tightrope will be essential for sustainable success in the Vietnamese market. Prudence, informed legal counsel, and a keen eye on evolving geopolitical and economic realities will be paramount for those seeking to capitalise on this transformative new chapter.

    Takeaways

    • Tariffs:The US-Vietnam framework agreement marks a significant departure from previous trade dynamics, reducing US tariffs on most Vietnamese imports to 20% (from a mooted 46%) while imposing a 40% tariff on transshipped goods, especially from China.
    • Vietnam’s market opening:Vietnam has committed to duty-free access for a broad range of US products and stricter controls on Chinese goods transiting its territory.
    • Growth / manufacturing shift potential:The agreement is expected to fuel expansion in Vietnamese electronics, textiles, furniture, energy (LNG), and agriculture. It also encourages supply chain localisation within Vietnam (normally more of an assembly point for Chinese products).
    • Execution challenges: Effectively preventing the re-routing of Chinese goods through Vietnam to avoid tariffs will be a complex and demanding task; Despite economic progress, Vietnam faces hurdles in scaling high-value manufacturing due to legal framework nuances (e.g., sublicences, IP enforcement), a skills gap in its workforce (lack of formal training, English proficiency) and infrastructure bottlenecks (logistics, energy, transportation).
    • US policy divergence:The agreement’s encouragement of US investment in Vietnam appears to contradict the broader US policy objective of reshoring manufacturing.
    • China:Businesses must consider China’s significant economic sway over Vietnam, including its position as Vietnam’s largest trading partner, its FDI, and its control over shared resources like the Mekong River. Any major shift by Vietnam away from China could lead to retaliatory measures from Beijing.
    • Uncertainty:This is not a final agreement, so the situation might change. Prudence and informed legal counsel are crucial for businesses navigating this evolving landscape.

    Roberto Luzi Crivellini

    Áreas de práctica

    • Arbitraje
    • Contratos de distribución
    • Comercio internacional
    • Derecho Internacional Privado
    • Derecho Inmobiliario
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      Contratos de Agencia y Distribución. Frases que hay que evitar al terminar una relación comercial sin contrato escrito

      11 de octubre de 2025

      • España
      • Agencia
      • Contratos
      • Contratos de distribución
      • Litigios

      Executive Summary

      The African Continental Free Trade Area (AfCFTA) remains one of the most ambitious integration projects in the world. Yet, several years into its operational phase, it has not (yet) delivered the structural shift many expected. A recent analysis underscores the gap between political momentum and economic reality: implementation remains uneven, the agreement is still used by only a portion of participating states, and non-tariff barriers and infrastructure deficits continue to dominate the cost of doing business across borders.  For Egypt, the opportunity is still real — but it depends less on treaty headlines and more on enabling conditions: trade logistics, customs efficiency, regulatory convergence, and competitive industrial capacity. 

      Looking Back: The Promise of a Single African Market

      When the AfCFTA was launched, expectations were understandably high. A continent-wide trade framework was supposed to reduce tariffs, facilitate trade in goods and services, and strengthen regional value chains — with the broader goal of moving African economies up the value ladder.

      In my 2022 article, I asked whether AfCFTA could become a game changer for Egypt, given Egypt’s industrial base, strategic geography, and the potential to diversify export markets beyond traditional partners. (For background, see the earlier article here”).

      The Reality Check: Intra-African Trade Remains Structurally Weak

      Several years later, the interim assessment is sobering. As the Frankfurter Allgemeine Zeitung (FAZ) recently put it, AfCFTA is not a “game changer” yet, and only about half of member states currently meet the practical prerequisites to trade under the agreement.

      A deeper reason is structural: no other world region trades so little with itself, and while statistics may undercount informal cross-border flows (especially in food), the overall picture remains unchanged.

      Trade integration cannot deliver transformative outcomes if production, logistics, and institutions do not support scale.

      Implementation Has Been Slow — and Often Symbolic

      Operationalisation did not start with full-scale liberalisation. Instead, the AfCFTA began with a pilot approach: the Guided Trade Initiative (GTI) launched in October 2022, initially with eight states, later joined by additional countries, including Nigeria and South Africa by spring 2025.

      The GTI created valuable learning effects, but it also underlined a key point: early progress was often presented through symbolic deals, while product coverage and volumes remained limited. FAZ highlights that only selected goods could be traded duty-free and that key sectors remained constrained for a long time due to missing or unresolved technical rules.

      A pilot, however, cannot substitute for full operational certainty — the kind businesses need to restructure supply chains and invest.

      Tariffs Are Not the Main Barrier — Trade Costs Are

      AfCFTA is frequently discussed in terms of tariff liberalisation. Yet, evidence suggests that the largest gains do not come from tariffs but from reducing non-tariff barriers and improving trade infrastructure.

      FAZ points to a central reality: tariffs tend to add around 20–30% to intra-African trade costs, whereas non-tariff costs can be far higher — driven by bureaucracy, lack of harmonised standards, inefficient border processes, and transport barriers.

      This is the crux: even with reduced tariffs, trade will not expand meaningfully if goods still cannot move cheaply, quickly, and predictably.

      Integration Complexity and Distributional Politics

      Africa’s integration landscape is shaped by multiple overlapping regional economic communities and trade regimes. This creates legal and administrative complexity — often described as an integration “spaghetti bowl.” FAZ notes the challenge of coordination and the continued fragmentation of rules.

      There is also a political economy dimension. Intra-African trade is heavily influenced by a small number of larger economies — and the distribution of benefits matters. FAZ highlights the dominance of major players (notably South Africa) and the concern that tariff liberalisation alone may entrench existing industrial advantages.

      Where governments expect asymmetric outcomes, resistance often takes the form of delay, narrow implementation, or persistent non-tariff barriers.

      What This Means for Egypt: The Opportunity Is Real — But Conditional

      Egypt’s strategic case for AfCFTA participation remains strong: industrial potential, geographic location, and the opportunity to access and shape growing markets. But the experience so far suggests that the treaty text alone does not generate trade flows.

      For Egypt’s private sector, the decisive factors are practical:

      • predictable and efficient customs clearance and border procedures,
      • logistics corridors and port efficiency,
      • regulatory convergence (standards, certification, compliance),
      • stable access to trade finance and payments,
      • competitive energy and production conditions for manufacturing and processing.

      AfCFTA can support these developments — but it cannot replace them.

      The “Game Changer” Pathway: What Must Happen Next

      FAZ concludes that AfCFTA will only become truly impactful if it is paired with the fundamentals: major infrastructure investment, stronger production and processing capacity, and a credible industrial policy.

      At the same time, Africa faces a classic chicken-and-egg problem: without development there is limited investment appeal; without investment there is limited development.

      For Egypt and its partners, a pragmatic strategy would be to:

      1. treat AfCFTA as a platform for real trade-cost reduction, not only tariff debates;
      2. focus on a limited number of scalable corridors and sectors where regional value chains can realistically grow;
      3. strengthen implementation capacity so that preferences become usable for firms — especially SMEs;
      4. enhance legal certainty and dispute resolution reliability for cross-border commerce.

      Conclusion

      AfCFTA remains a landmark achievement in terms of political commitment. But as of today, it has not yet been the “game changer” many hoped for.

      For Egypt, the key question is no longer whether AfCFTA is visionary — it is. The question is whether governments and businesses can translate it into lower real trade costs, higher competitiveness, and bankable cross-border transactions. If those enabling conditions improve, AfCFTA’s promise can still become commercial reality.

      After “Liberation Day,” many foreign companies offered discounts to American importers to help them offset the tariffs. A few months later, the US Supreme Court declared the «reciprocal» tariffs unlawful, but on the same day, President Trump announced new tariffs. In this article, we provide a practical overview of how to handle various scenarios, shifting from a reactive, unstructured approach to deliberate management of price volatility and trade flows caused by the introduction, adjustment, and removal of tariffs.

      Tariff Sharing agreements

      For a long time, the question has been straightforward: who absorbs the extra customs cost? The exporter? The importer? Both? The question remains important, but today it is incomplete.

      The new scenario, in light of the recent ruling by the US Court of Justice on March 20, 2026, is: what happens if that duty is then canceled and refunded? If the cost was shared between the parties, the benefit of the refund must follow a consistent logic. In the absence of a clear agreement on this point, however, there is a risk of economic misalignment that could compromise the commercial relationship.

      Let’s imagine an Italian winery that sells its products to a US importer. Following the introduction of reciprocal duties, the parties have decided that the exporter will grant an extraordinary discount of 7.5%, explicitly motivated by the need to share the impact of the duty. The commercial relationship continues, volumes remain stable, and the importer avoids passing on the entire increase to the end customer.

      As a result of the Supreme Court ruling (or, in the future, another ruling or administrative decision), the importer obtains a refund of the duties paid during that period.

      If no formal agreements have been made on this point and the documentation refers generically to a «commercial discount» and says nothing about reimbursement, the situation afterward may be difficult to reconstruct and, above all, could lead to commercial tension. As a result, a positive development (the cancellation of the duty and the right to reimbursement) becomes a problematic factor that jeopardizes the relationship.

      Is the exporter entitled to a refund of the discounts granted to mitigate the duties?

      In the absence of a different agreement between the parties, the right to reimbursement belongs to the party who paid the duty, i.e., in most cases, the importer. Therefore, there is a risk that the importer will enjoy a double benefit (the discount and the duty refund), while the exporter will get nothing.

      For this reason, it is essential that the parties do not limit themselves to negotiating prices and discounts, but also establish the consequences of the adoption, modification, or revocation of duties on the contract, including any refunds.

      To achieve this, the first step is to accurately classify and document the discounts granted. If only a «commercial discount» appears in emails, commercial orders, credit notes, and invoices, it will be harder to later argue that this discount was actually an extraordinary, temporary contribution related to the duty. Conversely, if the documentation and contract specify that it is a tariff sharing or tariff mitigation measure, identifying the amounts to be refunded after the fact becomes much simpler.

      The goal is to create a clear view of the trend in discounts and payments so that, if needed, financial flows can be adjusted to align with the original terms of the agreement: if the exporter has helped cover a cost that then, in whole or in part, does not end up materializing, they will be eligible for a refund of the contribution paid.

      The contract will therefore include, in addition to the Tariff Sharing clause, a Tariff Reimbursement Allocation clause, which states that if the importer receives a refund, credit, or any other economic benefit related to the duty for which the exporter has granted a discount, the importer must return the corresponding portion of the benefit to the exporter in full. or proportionally, depending on how the parties intend to distribute risk and incentive.

      Importer’s responsibility to seek reimbursement

      It is unclear whether, in the case of US reciprocal duties, importers can simply file an administrative claim to get a refund or if legal action will be required. The latter seems more probable.

      Generally, obtaining a duty refund involves action, deadlines, documentation, and coordination with brokers and customs consultants. In most cases, the entity controlling the process is the importer (or someone acting on their behalf).

      This raises a sensitive but very real issue: if the importer knows that they will have to invest time and money to obtain a refund, only to then have to share the benefit with the exporter, their incentive to take action may be reduced. To prevent this inertia  the contract should contain an express obligation to take action, set out as a duty of best efforts or commercially reasonable efforts.

      For example, the contract should specify that the importer must inquire about the conditions and time limits of the process, keep relevant documentation, regularly inform the exporter about the progress of the initiatives, and not unilaterally waive or reduce the claim if it affects the exporter’s economic rights.

      Preventive Agreements on Litigation and Cost Allocation

      When reimbursement involves a lawsuit or structured legal action, the obstacles are organizational and financial: who decides if and when to proceed, who selects the lawyers, who pays the costs upfront, how the net recovery is divided, and who has the final say on a settlement. This generally applies to all contracts, not just this case: dispute resolution methods must be addressed and agreed upon before the problem arises.

      Otherwise, the dispute resolution process risks becoming a secondary improvised negotiation at the worst time — when the parties are already under pressure from margins, cash flow, and regulatory uncertainty. As a result, it becomes much harder to reach an agreement.

      How to handle new tariffs and their potential cancellation

      To safeguard against uncertainty, the agreement should be organized into two stages.

      • The first stage regulates the immediate impact of the change in scenario, for example, the introduction of a new tariff or its increase (renegotiation, cost sharing, automatic adjustment : I discussed this in this article).
      • The second stage manages the possible «rollback» (right to reimbursement, process, allocation criteria).

      This approach has a clear benefit: it does not force the parties to discuss every time the tariff regime changes or a decision to cancel tariffs is made. Instead of reacting to market changes, a tool is adopted to manage potential scenarios, which is much more resilient commercially and easier to oversee, as the rules have already been agreed upon.

      This allows the impact of duties to be regulated not as an extraordinary variable, to be agreed upon on a one-time basis, but as a structural, adaptable phenomenon that could last a long time.

      This is why it is crucial to know how to draft contracts that cover both the current situation and potential changes, including any refunds.

      Conclusion: Three practical steps for companies exporting to the US

      The first is to agree on the consequences for the contract of the introduction of a new duty, increasing it, or revoking it (renegotiation, cost sharing, automatic price adjustment, right to share the refund).

      The second is to clearly document any discount granted to offset a duty. If it remains a generic «commercial discount,» the right to a refund if reimbursement occurs will be much harder to enforce.

      The third step is to determine what happens if the duty is canceled or revoked: the importer’s responsibility to take action to get a refund, manage the administrative process or litigation, how to divide costs, who oversees the activities of consultants and lawyers, and how the recovered funds will be allocated.

      How do you approach negotiating a trade agreement with China?

      Based on my experience, let’s examine the issues to be addressed and the main questions to ask, taking the negotiation of a trade distribution agreement as a practical example.

      Let’s start with the first issue that is important to clarify.

      Nice Business Card – But Who Is This Guy?

      Business cards, websites, printed or digital brochures, presentations, and any other materials shared in English have no official value in China.

      The company name of the counterparty and the first and last names of people representing it or acting on its behalf, written in English, are only fictitious names.

      To be certain of the company’s data and the identity of the persons, it is necessary to ask for the information in Chinese, with particular reference to the company’s business license (equivalent to the Companies House or Chamber of Commerce’s excerpt), from which the name, corporate purpose, registered and paid-up share capital, and the name of the legal representative can be inferred.

      The data can then be verified by accessing the portal of the State Administration of Industry and Commerce (SAIC) of the province where the Chinese party is based.

      This first verification is essential to ensure that you do not waste time or even run into scams (here’s an in-depth article on Legalmondo’s blog).

      If You Don’t Own Your Trademark, Someone Else Will – and Charge You for It

      Trademark First, Trade Later. China operates on a first-to-file system for trademarks, which means that the first person or company to register a trademark – not necessarily the original creator or most famous user – gains the legal rights to it. This creates a serious risk: if you haven’t registered your trademark in China, someone else might do it before you, and then either use it freely or demand a hefty ransom to give it back. Even high-profile figures like Elon Musk and Michael Jordan have been entangled in costly and protracted disputes with Chinese trademark squatters. In many cases, getting the mark back is highly complicated, and sometimes legally impossible.

      To avoid this, register your trademarks early, even before entering the Chinese market. File directly with the China Trademark Office (CTMO) and don’t stop at the English version — consider registering a Chinese character version as well, since that is how your brand will often be known locally.

      Once that base is covered, clearly state in your contract that your Chinese partner is not allowed to file a registration of any of your trademarks in China, in Latin or Chinese characters, and that he will use trademarks and IP rights in strict conformance to the contract and your instructions.

      For a deeper dive into how to effectively protect your IP rights in China, check out our detailed article on the Legalmondo blog.

      Contracts can wait. First, get on the same page

      When negotiating with a Chinese partner, it’s often a mistake to begin the conversation by exchanging contract drafts. Instead, focus first on the substance — the relationship’s commercial and technical terms. Using a clear checklist of key discussion points (such as products, pricing, delivery terms, technical standards, after-sales support, exclusivity, duration, payment terms, etc.) helps ensure that both sides are aligned on what really matters. Take detailed notes and keep minutes of the discussions, especially where and when consensus is reached, and make sure those minutes are circulated and expressly agreed upon. Once substantial agreement has been achieved on the main terms, this memo can then be handed over to your lawyer, who will translate the business understanding into clear and coherent contractual language. This approach saves tons of time, as it helps avoid unnecessary back-and-forth on legal language before the core deal is in place.

      Think Your NDA Covers You in China? Think Again

      Yes, they are—and often underestimated. A well-drafted Non-Disclosure Agreement (NDA) is essential when the parties plan to exchange confidential information, such as technological know-how, commercial strategies, supplier data, or client lists. Especially in the early phases of negotiation or cooperation, before a main contract is signed, an NDA helps protect intellectual and business assets.

      However, as with all contracts in China, a generic NDA template copied from other jurisdictions will likely be of limited use. To be truly effective, the NDA must be adapted to the specifics of the Chinese legal environment. This includes ensuring that it is enforceable in China: the NDA should include the proper dispute resolution mechanism (see below on why you should consider applying Chinese law and litigating in China), and it must specify clear, valid, and proportionate penalties for breach. In Chinese practice, stating specific contractual penalties (liquidated damages) is often more effective than vague references to compensation, as courts and arbitrators in China tend to enforce these more reliably if they are reasonable.

      While a good NDA is useful, it often falls short in China’s manufacturing and sourcing landscape. This is where the NNN Agreement – standing for Non-Disclosure, Non-Use, and Non-Circumvention – becomes critical. Unlike standard NDAs that primarily focus on confidentiality, an NNN Agreement is designed to address the unique risks of doing business in China. It prevents the recipient from not only disclosing confidential information but also from using it for their benefit or bypassing the disclosing party to work directly with suppliers, clients, or partners. Which, in China, is a very real risk.

      This broader scope is vital when dealing with Chinese manufacturers or intermediaries, who may otherwise be tempted to replicate products or contact customers directly or through third parties. As seen with the NDA, also the NNN Agreement must be drafted in Chinese, governed by Chinese law, and enforceable in Chinese courts -otherwise, it may offer little real protection.

      Joint venture? Easy, Cowboy

      A joint venture is often the first proposal that comes up when negotiating with a potential Chinese partner. It seems appealing: sharing risks and investments, accessing the local market with an ally, leveraging their knowledge and network of contacts. But the reality is often very different from what it appears to be.

      A joint venture is a complex, expensive, and rigid corporate structure that requires significant investments of money, time, and human resources, as well as the ability to continuously manage often divergent interests among the partners. The vast majority of Sino-Foreign JVs have gone wrong, or will go wrong. Or very wrong. First and foremost, because the JV is usually managed by the Chinese partner, and exercising effective control over the company’s operations is a very challenging undertaking.

      Before going down this road, it is essential to ask yourself a few questions: Is the joint venture really indispensable for developing this business in China? (Spoiler: generally, no). Are there less restrictive and risky alternatives, such as a distribution agreement or a licensing agreement? (Yes, almost always). And above all: how well do we really know our potential partner?

      A joint venture should only be considered if it is strictly necessary for the project’s development, after carefully verifying the commercial viability and the reliability of the Chinese partner, and ensuring the ability to maintain effective control over the JV’s operations.

      It is better to start with simpler and more flexible forms of collaboration to test the market and the relationship with the other party before committing to such a demanding investment. Otherwise, the mirage of the joint venture risks turning into a nightmare that can be very costly.

      Memorandum of Understanding: Where Good Intentions Become Bad Contracts

      A Memorandum of Understanding (MoU) is a helpful tool at the early stage of a commercial relationship. It serves as a roadmap for future negotiations, where the parties outline the main principles and intentions that will guide the drafting of the final agreements. When used correctly, an MoU can significantly facilitate negotiations by ensuring that both sides commit to negotiating the agreement in good faith and share a common understanding of key points such as pricing models, territorial scope, exclusivity, milestones, budget, or performance expectations.

      However, an MoU must be used for what it is: a preparatory document, not a binding contract. Care must be taken to avoid ambiguity and unintended commitments. The text should clearly specify that the parties remain free to conclude – or not – the final agreements and which clauses are non-binding – such as the commercial framework or indicative timelines – and which provisions are binding, typically confidentiality, exclusivity during the negotiations (if agreed), governing law, and dispute resolution. A poorly drafted MoU, which includes overly precise and complete terms, can be misinterpreted as a final agreement, creating unnecessary legal risk. So yes, MoUs are valuable – but only when used correctly. If you’d like to know more, go deeper by reading this article.

      Bad Drafts, Big Headaches, Poor results

      Draft agreements used in China are often copied and pasted from incomplete, superficial, poorly organised templates written in bad English, which often do not match the Chinese version of the contract.

      Correcting and integrating these drafts is complicated and more time-consuming than starting from a good template, with suboptimal results.

      It would be better to propose a consistently constructed text and ask the other party to propose any changes and additions to this draft.

      Your Western Contract Template Won’t Work Here

      Even if an English-language contract is perfectly valid, there are many reasons why using contract templates built for other countries in the Chinese market is inadvisable.

      The first is the fact that Anglo-Saxon-based agreements, such as those for the U.S., refer to a common law system (which is based on judicial decisions and case law precedents) that is very different from that of civil law countries (such as China and Italy), which derives from the Roman legal tradition, based on a codified set of written laws.

      It follows that the layout of an agreement on the Anglo-Saxon model is different, much more detailed, and wordy than that of a typical agreement based on a civil law system. Since contract negotiations in China are generally lengthy and complex, working on redundant and complicated text at the outset does not help.

      If we stick to the example of a distribution contract, it should be added that it is advisable to apply Chinese law to provide for arbitration based in China (e.g., at CIETAC) or in Hong Kong or Singapore (third countries, where, however, the costs of the procedure increase significantly) as the mode of dispute resolution. So, the contract should be built on a model that conforms to the law that will apply to the relationship.

      Home Court Advantage Won’t Help You in China. In fact, quite the opposite

      This is a typical point of disagreement in the negotiation of an international contract: the parties aim to have the law of their own country apply, and to stipulate that any disputes be adjudicated by their domestic courts.

      In our case, insisting on the application of Italian (or any other foreign) law and state court is not a good idea: it should be considered, in fact, that a distribution agreement is carried out, for the vast majority, in the country where the distributor operates and where the products are sold (in our case, in mainland China).

      In disputes, the parties’ (particularly the manufacturer’s) interest is to obtain a quick decision by the adjudicating body, especially if situations requiring immediate protection (such as unfair conduct or counterfeiting of trademarks and patents by the distributor) are ongoing.

      None of this is possible if one goes to an Italian judge (with lengthy litigation time and the need then for a complex and costly process to recognise and enforce the decision in China); on the contrary,  an arbitration in China, applying Chinese law, allows one to reach a decision quickly (on average 6-9 months) and, if necessary, also to obtain urgent measures to stop any unfair conduct.

      Chinese Law Isn’t a Black Box (If You Know What You’re Doing)

      The lawyer assisting you should know it.

      Therefore, it is not a leap in the dark, and one should not fear surprises.

      In addition, it should be remembered that an agreement is primarily based on the covenants that the parties have written in the contract; therefore, if the contract has been well drafted, the rules to be applied are clear.

      Finally, if we consider distribution agreements, keep in mind that they are a framework contract, within which a series of separate product sales contracts are concluded. If both countries are contracting parties to the 1980 Vienna Convention on the International Sale of Goods (CISG), then the uniform, clear, and balanced rules of the convention apply automatically, just don’t opt out!

      One Contract, Two Languages

      The contract is also valid in English only.  However, it is undoubtedly advisable to draft a Chinese version with facing text.

      This is for several reasons: first, it prevents the Chinese party from having to arrange for a translation of the text during negotiations for its own internal use (top managers often do not speak English), thus slowing down the various steps of negotiations.

      Also, to ensure that the Chinese side fully understands the agreement’s content and to avert misunderstandings (real or instrumental) about the interpretation of certain covenants.

      Finally, it should be borne in mind that if the contract were later to be used before a court or administrative authority in China, the only language admitted would be Chinese; for this reason, it is better to have already a text agreed and signed by the parties in Chinese as well, rather than having to prepare a unilateral translation later.

      Sign. And chop

      Does the contract need to bear the company’s official stamp? Yes, and this point is absolutely crucial. In China, a company’s official «chop» (the red-ink stamp) is equivalent to a signature and is conclusive proof that the person signing the contract has the authority to represent the company. A signature alone, even from someone with an important-sounding title, may not be sufficient if it is not accompanied by the official chop. Without it, the contract might later be challenged or even considered void. Before signing, always verify that the stamp used matches the one registered with the company’s business license or official corporate records, and ensure that the stamp is applied on every page or at least on the signature page, in line with local practice.

      Don’t Let Your Contract Collect Dust

      Things change fast, especially in China. New products are added, market conditions evolve, people leave the company, new competitors emerge on the horizon, and so on. Companies constantly adapt to the new conditions, and so must the contract.

      Any change in the relationship should be formalized correctly. To avoid misunderstandings and disputes, it’s advisable to include an integration clause in the contract, specifying that any amendments or additions will only be valid if agreed in writing, signed by the parties’ authorized representatives, and annexed as an addendum to the original agreement.

      It’s not enough to include this clause – you must follow it consistently. If things change, agreements reached verbally, through Wechat messages, and through email exchanges may make things complicated if they are not formalised adequately according to the procedure set out in the original contract.

      If you’d like to go deeper, check out this article.

      Son bastante frecuentes las relaciones comerciales con agentes o distribuidores que duran años y sin ningún documento firmado. Y, cuidado, porque ya sabemos que un contrato puede existir incluso verbalmente.

      La inexistencia de un contrato escrito va a añadir dificultades en una posible reclamación, por eso, lo que se haga entre la decisión de ponerle fin y el momento de la reclamación es muy importante. Recuerda: “cualquier cosa que escribas será usada en tu contra”.

      La decisión de terminar una relación comercial es un momento muy delicado al que, no sé por qué, a los abogados no se nos invita. Os doy algunos ejemplos (todos reales) en los que las empresas o algún empleado con la mejor voluntad escribió al agente/distribuidor. Todos fueron luego muy perjudiciales para la empresa:

       

      Decir “Ponemos fin a nuestra relación comercial” cuando la estrategia será defender que dicha relación comercial no existe, sino que son contratos independientes y encadenados (por ejemplo, suministro en lugar de contrato continuado de distribución; consecuencias de indemnización muy relevantes).

      “Usted ya no representa a nuestra sociedad”, lo que puede ser una prueba de que antes sí lo hacía.

      “A partir del día X usted ya no puede actuar en nombre de nuestra sociedad” que probaría que antes sí podía actuar en su nombre.

      “Usted no puede asistir a la feria de X en nuestro nombre”. Una forma de confirmar que entre las competencias del agente/distribuidor estaba participar en ferias y probablemente acredita los clientes obtenidos.

      “Las ventas promovidas por Ud. se han visto reducidas significativamente en el año N”. Cuando no hay contrato escrito ni otra forma de documentarlo, imputar un incumplimiento de una obligación que no está clara, puede ser contraproducente.

      Decir “No estás llevando a cabo una promoción activa de nuestros productos” para añadir a continuación: “le instamos a que deje de promocionar la venta de nuestros productos”.

      “Usted deja de ser nuestro representante exclusivo”, lo que prueba un tipo de relación (representación/agente) y un acuerdo tácito o expreso (“exclusividad”)

      “Hemos designado a otro representante en su zona”, que demuestra que el agente/distribuidor tenía una zona asignada y “representaba”.

      “A partir de este momento los pedidos serán asumidos por X” que, igualmente confirma un tipo de relación.

      En resumen: a partir del momento en el que la empresa valora poner fin a una relación comercial, sobre todo cuando no está escrita y antes de enviar cualquier carta, es conveniente pensar bien en la estrategia de cara a una posible reclamación. Es el momento más adecuado para asesorarse y evitar sorpresas. Cualquier comunicación que no esté alineada con esa estrategia diseñada desde el principio solo podrá aportar confusión y problemas.

      Remember the USA – EU agreement on 15% tariffs? I wrote that with a negotiator like Trump the game is never over (article here) and—after the recent interlude featuring a threat of 100% tariffs on pharmaceuticals—the U.S. government has announced the imposition of an overall 107% duty on Italian pasta, which could take effect on January 1, 2026.

      Where this new duty comes from

      The antidumping investigation was launched by the U.S. Department of Commerce at the request of certain competing American companies and is based on a 1996 antidumping order that allows for periodic reviews of imports of Italian pasta. The Department of Commerce conducts these checks annually to assess whether Italian producers are selling pasta at prices lower than the U.S. domestic market, a practice known as “dumping.”

      Companies involved in the investigation

      The Department of Commerce selected two sample companies for in-depth analysis, defined as “mandatory respondents”: La Molisana and Pastificio Lucio Garofalo. According to the official document published by the U.S. administration, for the period from July 1, 2023 to June 30, 2024, both companies allegedly sold their products below market prices, resulting in the imposition of a duty of 91.74%.

      U.S. authorities justified this percentage by claiming the two companies did not provide complete or compliant information as requested by the Department and were therefore insufficiently cooperative during the investigation. What is very important is that, in addition to the two companies directly examined, the additional 91.74% duty is also applied to numerous other Italian producers not individually reviewed. This methodology, while formally permitted under U.S. law as an exception, is being applied without any direct verification of the other companies.

      Next steps in the procedure

      Italy’s Ministry of Foreign Affairs moved immediately, formally intervening in the proceeding as an “interested party” through the Italian Embassy in Washington. The Foreign Ministry is working in close coordination with the companies concerned and, in concert with the European Commission, to persuade the U.S. Department to revise the provisional duties.

      The two companies involved (La Molisana and Garofalo) can submit documentation to contest the dumping allegations. However, if dumping is confirmed, the Department of Commerce will instruct Customs to apply antidumping duties on goods sold and entered into U.S. commerce.

      The preliminary nature of this determination means there is still room to change the decision before it becomes final.

      Possible effective date

      The new super-duty of 91.74%, which will be added to the existing 15% tariff for a total of 107%, is scheduled to take effect on January 1, 2026. This date therefore represents a crucial deadline for all ongoing diplomatic and legal actions.

      If confirmed, the economic impact would be significant: in 2024, Italian pasta exports to the United States reached a value of €671 million according to Coldiretti, accounting for nearly 17% of the sector’s total exports. A 107% duty would risk seriously undermining competitiveness in one of the most important markets for Italian agri-food products.

       What to do between now and January 1, 2026?

      At this stage, the entry into force of the new duty depends on the outcome of the ongoing procedure: given what has happened in recent months, and the political use the U.S. administration has made of tariffs—well beyond their technical function—it is reasonable to be pessimistic.

      So, what to do? In recent months we have seen companies react to the uncertainty over the fate of the tariffs in three ways:

      • Some rushed to ship as many products as possible before the potential effective date of the duty;
      • Some granted—upfront—discounts equivalent to the threatened duty, in case it came into force;
      • Some suspended orders, pending definitive news on the impact of the duties.

      These are all  valid options, but other effective tools for managing the uncertainty caused by the flurry of announcements, negotiations, and threats from the U.S. administration should not be forgotten: the risk of new duties being introduced, or existing ones being increased, can be managed in the contract by agreeing with the U.S. importer how any tariff change will affect the product.

      The parties can stipulate, for example, that the increase will be split equally; or that the importer will bear it beyond a certain threshold; or that if the duty exceeds a certain level, the contracts may be terminated. You can find a deeper dive in this article.

      The only certainty is that trade relations with the U.S. will stay unpredictable for a long time, and it’s vital to carefully manage the risk factors involved in selling products there. Right now, the focus is on tariffs and prices, and I encourage you to take this chance to thoroughly review existing agreements and assess whether—and how—other important points are addressed that could entail significant liabilities: we discuss them, very practically, in this book.

      On 29 June 2025, the Vietnamese government introduced Decree No. 163/2025/ND-CP (Decree 163). This decree provides detailed guidance on how the updated Law on Pharmacy will be implemented.

      Like the amended Law on Pharmacy, Decree 163 came into effect on 1 July 2025, replacing the previous Decree No. 54/2017/ND-CP (Decree 54). The new decree sets out comprehensive rules for key aspects of managing pharmaceuticals, including:

      • Pharmacy practice certificates
      • Certificates allowing pharmaceutical businesses to operate
      • Import and export of medicines and drug ingredients
      • Good Manufacturing Practice (GMP) inspections of overseas manufacturers
      • Recalling medicines and drug ingredients
      • Certificates for medicine advertising content
      • Medicine price management

      Key Changes in Decree 163

      Here are some important changes and additions introduced by Decree 163:

      Destroying Specially Controlled Medicines

      You no longer need to get approval from the relevant authority before destroying narcotic, psychotropic, and precursor drugs, or pharmaceutical ingredients that are narcotic or psychotropic substances or precursors used in medicines. Instead, you just need to provide notification at least seven working days in advance. This notification must include the planned destruction date and a detailed list of items to be destroyed.

      E-commerce in Pharmaceutical

      Pharmaceutical businesses that sell products online must openly display the following information to ensure transparency and consumer safety:

      • Their certificate allowing them to operate as a pharmaceutical business.
      • The pharmacy practice certificate of the person responsible for pharmaceutical expertise.
      • Information about the medicines themselves.

      Shelf-Life Rules for Imported Products

      For medicines and ingredients with a total shelf life of nine months or less, at least one-third of their shelf life must remain when they clear customs. Medicines with a shelf life of 30 days or less must still be within their shelf life at the time of customs clearance.

      Controlling Imported Products

      All medicines with marketing authorisation (MA) are subject to import control, except for:

      • Medicines needed for preventing and treating Group A infectious diseases that have been declared epidemics, as per the Law on Prevention and Control of Infectious Diseases.
      • Medicines with a shelf life of less than 30 days.

      Importers must inform the provincial People’s Committee at least five working days before making a customs declaration. The People’s Committee can then issue a written notice of non-compliance to the customs authority within five working days of receiving this notification.

      Medicine Advertising

      Decree 163 adds a process that allows an approved medicine advertising certificate to be adjusted for certain changes (such as a change to the MA holder or manufacturer information). This means you don’t have to go through the entire initial registration process for medicine advertising content again, as was required under the previous rules.

      Medicine Price Management

      Businesses must announce or re-announce wholesale prices, similar to the medicine price declaration process under Decree 54. Some medicines are exempt from this requirement, including those provided free of charge for emergency responses, national health programmes, humanitarian aid, clinical trials, scientific research, or exhibition purposes, and medicines carried as personal luggage.

      The Ministry of Health (MOH) can make recommendations if the announced or re-announced price is significantly higher than similar medicines already on the market. This includes situations where:

      • The announced or re-announced wholesale price of the medicine is higher than the highest price of similar medicines.
      • The price difference is more than 35% (for medicines priced under VND 1 million) or 15% (for medicines priced at VND 1 million and above) compared to winning bid prices in tenders.
      • The announced or re-announced price is higher than prices in the country of origin or other markets (if there’s no similar product in Vietnam).
      • When such differences are found, the MOH issues a formal recommendation to the announcing business and publishes it online for transparency and accountability.

      Further Guidance in New Circular

      On 1 July 2025, the MOH issued Circular No. 31/2025/TT-BYT (Circular 31), which further details how the amended Law on Pharmacy and Decree 163 should be implemented. Circular 31 officially replaces Circular No. 07/2018/TT-BYT and Decree 54 and came into effect immediately.

      Key provisions of Circular 31 include:

      Notification of Practising Pharmacists

      Pharmaceutical businesses that are not part of a pharmacy chain must inform the relevant authority of a list of people currently working at the business who hold pharmacy practice certificates. This notification must be submitted within 15 days of the date the certificate allowing the pharmaceutical business to operate was issued, or when there are any changes to the list. This is a shorter deadline than the previous 30 days under earlier rules.

      Pharmacy chains have similar notification duties and deadlines. Specifically, the chain operator must inform the provincial authority where each pharmacy in the chain is located about the list of practising pharmacists at those sites. Additionally, pharmacy chains must notify the authority if pharmacies are added or removed from the chain, and if there are any rotations of the people responsible for pharmaceutical expertise between pharmacies within the chain.

      Medicine Information Activities

      Under Circular 31, medicine information can still be given to healthcare professionals through information materials, seminars, and medical representatives.

      However, Circular 31 introduces a significant change by removing the need to obtain a certificate for medicine information content before carrying out these activities. Under the new rules, pharmaceutical businesses, representative offices of foreign pharmaceutical companies in Vietnam, and MA holders are now responsible for creating and distributing medicine information materials. These materials must comply with the package inserts for medicines approved by the MOH, the Vietnamese National Drug Formulary, and any related documents and professional instructions issued or recognised by the MOH.

      Donald Trump, never one to shy away from drama or diplomacy-via-caps-lock, has slapped a 50% tariff on all Brazilian exports to the United States. The justification? In his own delicate prose: «The treatment of former President Jair Bolsonaro is a disgrace… A witch hunt that must end IMMEDIATELY!»

      And just in case anyone thought this was about trade imbalances or economic strategy, Trump made things crystal clear: «Due to Brazil’s insidious attacks on free elections…».

      In short, the 50% tariff isn’t about coffee, orange juice, or flip-flops. It’s about a Supreme Court judgment, applying Brazilian law, regarding Brazilian politicians accused of conspiring in a coup d’état. In other words, this is a brazen (and frankly absurd) attempt at judicial intervention via trade war.

      Trump, with his characteristic subtlety, offered a solution: manufacture in the U.S., and he’ll look kindly upon Brazil, like a mafia don offering «protection» after smashing your shop window. But what he meant was: consider Bolsonaro innocent, and we’ll talk.

      The Brazilian market took the bait

      Although the fishy interference in Brazilian affairs was determined from a fish out of the water, the market took the bait: in the first 48 hours after the infamous letter, at least 1500 tons of fish were already held in Brazilian ports, as US buyers suspended their contracts due to uncertainty about the costs upon arrival. The fish market is on alert, as 80% of the exports head to the US, mainly coming from small family-owned industries that distribute the catch from artisanal fishing communities.

      The same effect hit other sectors, from orange, honey, and coffee to aircraft.

      Brazil’s response and sorcery: don’t mess with us (or our weather)

      Naturally, Brazil will not sit quietly sipping caipirinhas while its sovereignty is trampled. Reciprocity is on the table: if Washington raises tariffs, Brasília can do the same. But above all, one thing is sure: Brazil will never tolerate foreign interference in its independent judiciary.

      And then, a curious coincidence: right after Trump’s speech, a tornado accompanied by lightning struck the White House grounds. Pure chance? Maybe. Or could it have been the work of Brazilian indigenous shamans, a particularly well-organized group of umbanda practitioners, or simply the fact that, as every Brazilian child knows, God is Brazilian.

      Trump might want to check the weather forecast next time before penning another angry letter.

      The unpredictable becoming predictable

      Trade wars are rarely tidy affairs, but one thing they consistently deliver is chaos (in legal terms, disruption). And when disruption meets contracts, force majeure disputes often end up in court.

      At first glance, Trump’s decision to impose a 50% tariff overnight might feel like an unpredictable thunderbolt (quite literally, given the weather at the White House). But here’s the catch: by now, unpredictable tariffs are becoming predictable. When a government with a well-documented love for impulsive economic diplomacy imposes politically motivated tariffs, can anyone claim to be surprised?

      In most jurisdictions, force majeure requires that the event be extraordinary, unforeseeable, and beyond the parties’ control. A sudden 50% tariff certainly ticks a few of those boxes, but following a repetition of erratic trade policy, one might argue that businesses should expect what in past times was considered unexpected, especially when dealing with certain jurisdictions or political figures. In other words, Trump’s tariffs might not excuse performance if parties didn’t prepare for exactly this kind of volatility.

      This is where good contract drafting comes into play

      Savvy businesses are learning that their contracts must go beyond a vague boilerplate clause about “acts of government” or “changes in law.” Instead, they should expressly address the risk of sudden tariff changes, including

      • hardship clauses that allow renegotiation when costs become commercially unreasonable;
      • price adjustment mechanisms linked to tariff thresholds;
      • termination rights triggered by specified levels of customs duties;
      • currency fluctuation provisions (because tariffs rarely travel alone, and currency swings often accompany them).

      In short, while no contract can immunize a business from every shock, smart drafting can mean the difference between a commercial headache and a catastrophic breach.

      Therefore, tariffs may no longer be an unpredictable storm; they are part of the new predictable landscape. Given that your contract might wake up tomorrow facing ‘IMMEDIATE’ punitive tariffs in all caps, your contract should be ready today.

      The unwitting cupid: strengthening EU-Brazil relations

      While the tariffs may ruffle trade flows between Brasília and Washington, there’s an unintended silver lining: Trump is proving to be the most efficient matchmaker between Brazil and other markets, such as China and the European Union.

      The EU-Brazil relationship, already a flirtation with promising prospects, with relevant progress in the EU-Mercosur Agreement, now seems destined for deeper romance. If Mr. Trump insists on isolating the US from Brazil, the old continent stands ready, with flowers and wine in hand, to pick up where the US left off. After all, Brazilian fish can pair up nicely with champagne, cava and prosecco.

      So thank you, Mr. Trump. In your quest to bully Brazil into submission, you may have done more to strengthen transatlantic ties than any EU Commissioner ever could. As they say in Brasília these days: Trump is not a trade warrior. He’s a cupid in disguise.

      The recent announcement of a landmark trade agreement framework, following just three months negotiations since President Trump’s tariffs announcement on 2 April 2025, signals a pivotal shift, not merely in bilateral relations, but in the broader architecture of global supply chains.

      As a commercial lawyer with exposure to Vietnam since 2007, I have observed the evolving dynamics between the United States and Vietnam through the years, talking to students, entrepreneurs, veterans, diplomats, humans from all walks all life, from both nations and beyond.

      You may recall that Vietnam, with the notable exclusion of China, was to be the nation that would encounter the most stringent tariffs imposed by the Trump administration, reaching an astonishing 46%.

      The newly forged framework outlines significant reciprocal concessions designed to foster greater trade and investment flows. Granted, pre-April 2 tariffs applied by the USA on Vietnamese goods were lower than what emerges from the framework agreement, but still, it is better than 46%),

      The United States has committed to imposing a 20% tariff on most Vietnamese imports, a notable reduction from the previously mooted 46%. However, a substantial 40% tariff will apply to goods re-exported from third countries, with a particular focus on those originating from China.

      Vietnam has pledged to open its market to a wide array of US products. Crucially, it has also committed to implementing stringent measures aimed at restricting the transshipment of Chinese goods through its territory, a long-standing concern for Washington.

      In a significant win for American exporters, US goods will now enjoy duty-free access to the Vietnamese market, effectively granting “total access”, particularly for large-engine vehicles such as SUVs, as emphatically stated by President Trump (how SUVs are going to circulate in the narrow alleys of Hanoi and Ho Chi Minh City, infested by swarms of mopeds, is a different story).

      This agreement is expected to catalyse growth in several key sectors. Electronics, textiles, furniture, energy (especially Liquefied Natural Gas), and agriculture are poised for expansion. US firms specialising in manufacturing technology, energy solutions, and agricultural products are anticipated to be the primary beneficiaries. Furthermore, beyond immediate trade benefits, the agreement is set to reshape investment strategies, encouraging a greater localisation of supply chains within Vietnam. This strategic realignment is also expected to further solidify the already robust US-Vietnam Comprehensive Strategic Partnership.

      While the potential upsides are considerable, it is imperative for businesses and investors to approach this new landscape with a clear understanding of the accompanying risks. From my vantage point, I identify several significant execution challenges and structural impediments that require close monitoring.

      Enforcement of Transshipment Controls

      The most immediate and perhaps formidable risk lies in the effective enforcement of transshipment controls. Vietnam has historically served as a significant assembly point for Chinese-manufactured components. Ensuring that goods originating from China are not merely re-routed through Vietnam to circumvent US tariffs will require exceptionally close monitoring and robust verification mechanisms. The legal and practical complexities of definitively determining the true country of origin for all goods will undoubtedly pose a persistent challenge. As a European citizen, witnessing how the EU-Vietnam Free Trade Agreement (“EVFTA”), which poses an important stress on certificates of origin, I am particularly aware of this matter.

      While Vietnam has made remarkable strides in its economic development, certain structural issues could hinder its capacity to scale up high-value manufacturing in the short to medium term. These include:

      Legal framework nuances

      Vietnam’s legal framework for foreign investment has seen continuous improvements, but legal and cultural complexities and inconsistencies can and do still arise. Navigating the regulatory landscape, particularly with new rules stemming from this agreement and at a time of deep administrative, governmental, digital and legal reforms in Vietnam, will demand expert legal guidance to ensure compliance and mitigate potential fines and disputes. Issues surrounding so-called sublicences for businesses, intellectual property rights enforcement and contract enforceability, whilst improving, still require careful consideration;

      Education

      The ambition to transform Vietnam into a high-value manufacturing hub necessitates a workforce equipped with advanced skills. While the Vietnamese government prioritises education and workforce development, a significant portion of the current labour force lacks formal training and specialised certifications, let alone a good command of the English language. Bridging this skills gap, particularly in areas like advanced manufacturing, engineering, and digital technologies is a necessity and not just in light of this framework agreement. Companies may need to factor in substantial investment in training and upskilling programmes for their Vietnamese employees.

      Infrastructures

      Despite considerable investment, Vietnam’s infrastructure, particularly in logistics, energy, and transportation, continues to face bottlenecks. And China – the apparent target of Trump’s tariffs – is stepping in with high-speed trains connecting it to the northern Provinces of Vietnam. An increased volume of high-value manufacturing and trade will place further strain on existing infrastructure. Inadequate port capacity, congested roads, and a reliable energy supply (including for EV charging) are critical concerns that could impact efficiency and increase operational costs for businesses.

      Policy divergence

      This framework agreement deepens US-Vietnam trade ties and seems to be paving the way for more US investments in Vietnam, but this second aspect seems to run counter to parallel US policy objectives aimed at reshoring manufacturing back to the United States. This potential divergence in strategic priorities could introduce yet another element of unpredictability in the long term, necessitating a flexible and adaptable investment approach. Future shifts in US policy could impact the durability and full extent of the benefits derived from this agreement.

      This trade agreement, if finalised and implemented, undoubtedly represents a structural shift in global trade dynamics. It strategically positions Vietnam as an increasingly important high-value manufacturing hub and significantly deepens US engagement in Southeast Asia. We will need time, however, to assess the practical impact of the agreement, observing the efficacy of its implementation, and understanding how Vietnam’s inherent strengths and challenges will ultimately shape its role in the reconfigured global supply chain.

      We will also need to see what China, if anything, will do as a countermeasure. In fact, any assessment of Vietnam’s evolving trade landscape would be incomplete without a thorough consideration of China’s influence and strategic posture. President Xi Jinping has consistently championed a vision of a “community of shared future for mankind,” a concept that, while outwardly promoting global cooperation, also subtly underscores a demand for international alignment with Beijing’s interests. In the context of escalating trade tensions, Xi has repeatedly warned that “trade wars have no winners,” advocating for unity against protectionist measures, yet simultaneously implying that nations must ultimately choose sides, either with or against China’s economic and political orbit. Vietnam, despite its historical complexities and occasional maritime disputes with Beijing in the South China Sea (or East Sea, as it is officially called by Hanoi), remains deeply interwoven with China’s economy. China has been Vietnam’s largest trading partner for many years, with significant inflows of Chinese FDI, loans, and project contractors. This economic dependency is particularly evident in various sectors, where Chinese components and materials form a substantial part of Vietnamese manufacturing supply chains. While Vietnam has actively sought to diversify its trade partners and reduce its reliance on China, the sheer scale of the bilateral economic relationship means that disentanglement is a long-term, complex endeavour. Furthermore, China’s influence extends beyond direct trade into crucial regional resources. The Mekong River, a lifeline for millions in Southeast Asia, originates in China, which has constructed numerous upstream dams.

      As Vietnam navigates its enhanced trade relationship with the United States, it must simultaneously contend with the enduring economic gravity and strategic ambitions of its northern giant neighbour. Any perceived move by Vietnam to significantly shift away from China could invite retaliatory measures or heightened pressure from Beijing. Businesses investing in Vietnam must not only grasp the intricacies of the US-Vietnam agreement but also meticulously analyse how these developments will intersect with, and potentially be impacted by, the intricate, often delicate, and sometimes fraught relationship between Hanoi and Beijing. Understanding this geopolitical tightrope will be essential for sustainable success in the Vietnamese market. Prudence, informed legal counsel, and a keen eye on evolving geopolitical and economic realities will be paramount for those seeking to capitalise on this transformative new chapter.

      Takeaways

      • Tariffs:The US-Vietnam framework agreement marks a significant departure from previous trade dynamics, reducing US tariffs on most Vietnamese imports to 20% (from a mooted 46%) while imposing a 40% tariff on transshipped goods, especially from China.
      • Vietnam’s market opening:Vietnam has committed to duty-free access for a broad range of US products and stricter controls on Chinese goods transiting its territory.
      • Growth / manufacturing shift potential:The agreement is expected to fuel expansion in Vietnamese electronics, textiles, furniture, energy (LNG), and agriculture. It also encourages supply chain localisation within Vietnam (normally more of an assembly point for Chinese products).
      • Execution challenges: Effectively preventing the re-routing of Chinese goods through Vietnam to avoid tariffs will be a complex and demanding task; Despite economic progress, Vietnam faces hurdles in scaling high-value manufacturing due to legal framework nuances (e.g., sublicences, IP enforcement), a skills gap in its workforce (lack of formal training, English proficiency) and infrastructure bottlenecks (logistics, energy, transportation).
      • US policy divergence:The agreement’s encouragement of US investment in Vietnam appears to contradict the broader US policy objective of reshoring manufacturing.
      • China:Businesses must consider China’s significant economic sway over Vietnam, including its position as Vietnam’s largest trading partner, its FDI, and its control over shared resources like the Mekong River. Any major shift by Vietnam away from China could lead to retaliatory measures from Beijing.
      • Uncertainty:This is not a final agreement, so the situation might change. Prudence and informed legal counsel are crucial for businesses navigating this evolving landscape.

      Ignacio Alonso

      Áreas de práctica

      • Agencia
      • Derecho Societario
      • Contratos de distribución
      • Franquicia
      Contáctanos Ignacio

      Contacta con Ignacio





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        U.S. Tariffs at 107% on Italian Pasta? Another episode in the saga of exporting to the United States

        8 de octubre de 2025

        • Italia
        • Contratos
        • Contratos de distribución
        • Derecho Fiscal y Tributario

        Executive Summary

        The African Continental Free Trade Area (AfCFTA) remains one of the most ambitious integration projects in the world. Yet, several years into its operational phase, it has not (yet) delivered the structural shift many expected. A recent analysis underscores the gap between political momentum and economic reality: implementation remains uneven, the agreement is still used by only a portion of participating states, and non-tariff barriers and infrastructure deficits continue to dominate the cost of doing business across borders.  For Egypt, the opportunity is still real — but it depends less on treaty headlines and more on enabling conditions: trade logistics, customs efficiency, regulatory convergence, and competitive industrial capacity. 

        Looking Back: The Promise of a Single African Market

        When the AfCFTA was launched, expectations were understandably high. A continent-wide trade framework was supposed to reduce tariffs, facilitate trade in goods and services, and strengthen regional value chains — with the broader goal of moving African economies up the value ladder.

        In my 2022 article, I asked whether AfCFTA could become a game changer for Egypt, given Egypt’s industrial base, strategic geography, and the potential to diversify export markets beyond traditional partners. (For background, see the earlier article here”).

        The Reality Check: Intra-African Trade Remains Structurally Weak

        Several years later, the interim assessment is sobering. As the Frankfurter Allgemeine Zeitung (FAZ) recently put it, AfCFTA is not a “game changer” yet, and only about half of member states currently meet the practical prerequisites to trade under the agreement.

        A deeper reason is structural: no other world region trades so little with itself, and while statistics may undercount informal cross-border flows (especially in food), the overall picture remains unchanged.

        Trade integration cannot deliver transformative outcomes if production, logistics, and institutions do not support scale.

        Implementation Has Been Slow — and Often Symbolic

        Operationalisation did not start with full-scale liberalisation. Instead, the AfCFTA began with a pilot approach: the Guided Trade Initiative (GTI) launched in October 2022, initially with eight states, later joined by additional countries, including Nigeria and South Africa by spring 2025.

        The GTI created valuable learning effects, but it also underlined a key point: early progress was often presented through symbolic deals, while product coverage and volumes remained limited. FAZ highlights that only selected goods could be traded duty-free and that key sectors remained constrained for a long time due to missing or unresolved technical rules.

        A pilot, however, cannot substitute for full operational certainty — the kind businesses need to restructure supply chains and invest.

        Tariffs Are Not the Main Barrier — Trade Costs Are

        AfCFTA is frequently discussed in terms of tariff liberalisation. Yet, evidence suggests that the largest gains do not come from tariffs but from reducing non-tariff barriers and improving trade infrastructure.

        FAZ points to a central reality: tariffs tend to add around 20–30% to intra-African trade costs, whereas non-tariff costs can be far higher — driven by bureaucracy, lack of harmonised standards, inefficient border processes, and transport barriers.

        This is the crux: even with reduced tariffs, trade will not expand meaningfully if goods still cannot move cheaply, quickly, and predictably.

        Integration Complexity and Distributional Politics

        Africa’s integration landscape is shaped by multiple overlapping regional economic communities and trade regimes. This creates legal and administrative complexity — often described as an integration “spaghetti bowl.” FAZ notes the challenge of coordination and the continued fragmentation of rules.

        There is also a political economy dimension. Intra-African trade is heavily influenced by a small number of larger economies — and the distribution of benefits matters. FAZ highlights the dominance of major players (notably South Africa) and the concern that tariff liberalisation alone may entrench existing industrial advantages.

        Where governments expect asymmetric outcomes, resistance often takes the form of delay, narrow implementation, or persistent non-tariff barriers.

        What This Means for Egypt: The Opportunity Is Real — But Conditional

        Egypt’s strategic case for AfCFTA participation remains strong: industrial potential, geographic location, and the opportunity to access and shape growing markets. But the experience so far suggests that the treaty text alone does not generate trade flows.

        For Egypt’s private sector, the decisive factors are practical:

        • predictable and efficient customs clearance and border procedures,
        • logistics corridors and port efficiency,
        • regulatory convergence (standards, certification, compliance),
        • stable access to trade finance and payments,
        • competitive energy and production conditions for manufacturing and processing.

        AfCFTA can support these developments — but it cannot replace them.

        The “Game Changer” Pathway: What Must Happen Next

        FAZ concludes that AfCFTA will only become truly impactful if it is paired with the fundamentals: major infrastructure investment, stronger production and processing capacity, and a credible industrial policy.

        At the same time, Africa faces a classic chicken-and-egg problem: without development there is limited investment appeal; without investment there is limited development.

        For Egypt and its partners, a pragmatic strategy would be to:

        1. treat AfCFTA as a platform for real trade-cost reduction, not only tariff debates;
        2. focus on a limited number of scalable corridors and sectors where regional value chains can realistically grow;
        3. strengthen implementation capacity so that preferences become usable for firms — especially SMEs;
        4. enhance legal certainty and dispute resolution reliability for cross-border commerce.

        Conclusion

        AfCFTA remains a landmark achievement in terms of political commitment. But as of today, it has not yet been the “game changer” many hoped for.

        For Egypt, the key question is no longer whether AfCFTA is visionary — it is. The question is whether governments and businesses can translate it into lower real trade costs, higher competitiveness, and bankable cross-border transactions. If those enabling conditions improve, AfCFTA’s promise can still become commercial reality.

        After “Liberation Day,” many foreign companies offered discounts to American importers to help them offset the tariffs. A few months later, the US Supreme Court declared the «reciprocal» tariffs unlawful, but on the same day, President Trump announced new tariffs. In this article, we provide a practical overview of how to handle various scenarios, shifting from a reactive, unstructured approach to deliberate management of price volatility and trade flows caused by the introduction, adjustment, and removal of tariffs.

        Tariff Sharing agreements

        For a long time, the question has been straightforward: who absorbs the extra customs cost? The exporter? The importer? Both? The question remains important, but today it is incomplete.

        The new scenario, in light of the recent ruling by the US Court of Justice on March 20, 2026, is: what happens if that duty is then canceled and refunded? If the cost was shared between the parties, the benefit of the refund must follow a consistent logic. In the absence of a clear agreement on this point, however, there is a risk of economic misalignment that could compromise the commercial relationship.

        Let’s imagine an Italian winery that sells its products to a US importer. Following the introduction of reciprocal duties, the parties have decided that the exporter will grant an extraordinary discount of 7.5%, explicitly motivated by the need to share the impact of the duty. The commercial relationship continues, volumes remain stable, and the importer avoids passing on the entire increase to the end customer.

        As a result of the Supreme Court ruling (or, in the future, another ruling or administrative decision), the importer obtains a refund of the duties paid during that period.

        If no formal agreements have been made on this point and the documentation refers generically to a «commercial discount» and says nothing about reimbursement, the situation afterward may be difficult to reconstruct and, above all, could lead to commercial tension. As a result, a positive development (the cancellation of the duty and the right to reimbursement) becomes a problematic factor that jeopardizes the relationship.

        Is the exporter entitled to a refund of the discounts granted to mitigate the duties?

        In the absence of a different agreement between the parties, the right to reimbursement belongs to the party who paid the duty, i.e., in most cases, the importer. Therefore, there is a risk that the importer will enjoy a double benefit (the discount and the duty refund), while the exporter will get nothing.

        For this reason, it is essential that the parties do not limit themselves to negotiating prices and discounts, but also establish the consequences of the adoption, modification, or revocation of duties on the contract, including any refunds.

        To achieve this, the first step is to accurately classify and document the discounts granted. If only a «commercial discount» appears in emails, commercial orders, credit notes, and invoices, it will be harder to later argue that this discount was actually an extraordinary, temporary contribution related to the duty. Conversely, if the documentation and contract specify that it is a tariff sharing or tariff mitigation measure, identifying the amounts to be refunded after the fact becomes much simpler.

        The goal is to create a clear view of the trend in discounts and payments so that, if needed, financial flows can be adjusted to align with the original terms of the agreement: if the exporter has helped cover a cost that then, in whole or in part, does not end up materializing, they will be eligible for a refund of the contribution paid.

        The contract will therefore include, in addition to the Tariff Sharing clause, a Tariff Reimbursement Allocation clause, which states that if the importer receives a refund, credit, or any other economic benefit related to the duty for which the exporter has granted a discount, the importer must return the corresponding portion of the benefit to the exporter in full. or proportionally, depending on how the parties intend to distribute risk and incentive.

        Importer’s responsibility to seek reimbursement

        It is unclear whether, in the case of US reciprocal duties, importers can simply file an administrative claim to get a refund or if legal action will be required. The latter seems more probable.

        Generally, obtaining a duty refund involves action, deadlines, documentation, and coordination with brokers and customs consultants. In most cases, the entity controlling the process is the importer (or someone acting on their behalf).

        This raises a sensitive but very real issue: if the importer knows that they will have to invest time and money to obtain a refund, only to then have to share the benefit with the exporter, their incentive to take action may be reduced. To prevent this inertia  the contract should contain an express obligation to take action, set out as a duty of best efforts or commercially reasonable efforts.

        For example, the contract should specify that the importer must inquire about the conditions and time limits of the process, keep relevant documentation, regularly inform the exporter about the progress of the initiatives, and not unilaterally waive or reduce the claim if it affects the exporter’s economic rights.

        Preventive Agreements on Litigation and Cost Allocation

        When reimbursement involves a lawsuit or structured legal action, the obstacles are organizational and financial: who decides if and when to proceed, who selects the lawyers, who pays the costs upfront, how the net recovery is divided, and who has the final say on a settlement. This generally applies to all contracts, not just this case: dispute resolution methods must be addressed and agreed upon before the problem arises.

        Otherwise, the dispute resolution process risks becoming a secondary improvised negotiation at the worst time — when the parties are already under pressure from margins, cash flow, and regulatory uncertainty. As a result, it becomes much harder to reach an agreement.

        How to handle new tariffs and their potential cancellation

        To safeguard against uncertainty, the agreement should be organized into two stages.

        • The first stage regulates the immediate impact of the change in scenario, for example, the introduction of a new tariff or its increase (renegotiation, cost sharing, automatic adjustment : I discussed this in this article).
        • The second stage manages the possible «rollback» (right to reimbursement, process, allocation criteria).

        This approach has a clear benefit: it does not force the parties to discuss every time the tariff regime changes or a decision to cancel tariffs is made. Instead of reacting to market changes, a tool is adopted to manage potential scenarios, which is much more resilient commercially and easier to oversee, as the rules have already been agreed upon.

        This allows the impact of duties to be regulated not as an extraordinary variable, to be agreed upon on a one-time basis, but as a structural, adaptable phenomenon that could last a long time.

        This is why it is crucial to know how to draft contracts that cover both the current situation and potential changes, including any refunds.

        Conclusion: Three practical steps for companies exporting to the US

        The first is to agree on the consequences for the contract of the introduction of a new duty, increasing it, or revoking it (renegotiation, cost sharing, automatic price adjustment, right to share the refund).

        The second is to clearly document any discount granted to offset a duty. If it remains a generic «commercial discount,» the right to a refund if reimbursement occurs will be much harder to enforce.

        The third step is to determine what happens if the duty is canceled or revoked: the importer’s responsibility to take action to get a refund, manage the administrative process or litigation, how to divide costs, who oversees the activities of consultants and lawyers, and how the recovered funds will be allocated.

        How do you approach negotiating a trade agreement with China?

        Based on my experience, let’s examine the issues to be addressed and the main questions to ask, taking the negotiation of a trade distribution agreement as a practical example.

        Let’s start with the first issue that is important to clarify.

        Nice Business Card – But Who Is This Guy?

        Business cards, websites, printed or digital brochures, presentations, and any other materials shared in English have no official value in China.

        The company name of the counterparty and the first and last names of people representing it or acting on its behalf, written in English, are only fictitious names.

        To be certain of the company’s data and the identity of the persons, it is necessary to ask for the information in Chinese, with particular reference to the company’s business license (equivalent to the Companies House or Chamber of Commerce’s excerpt), from which the name, corporate purpose, registered and paid-up share capital, and the name of the legal representative can be inferred.

        The data can then be verified by accessing the portal of the State Administration of Industry and Commerce (SAIC) of the province where the Chinese party is based.

        This first verification is essential to ensure that you do not waste time or even run into scams (here’s an in-depth article on Legalmondo’s blog).

        If You Don’t Own Your Trademark, Someone Else Will – and Charge You for It

        Trademark First, Trade Later. China operates on a first-to-file system for trademarks, which means that the first person or company to register a trademark – not necessarily the original creator or most famous user – gains the legal rights to it. This creates a serious risk: if you haven’t registered your trademark in China, someone else might do it before you, and then either use it freely or demand a hefty ransom to give it back. Even high-profile figures like Elon Musk and Michael Jordan have been entangled in costly and protracted disputes with Chinese trademark squatters. In many cases, getting the mark back is highly complicated, and sometimes legally impossible.

        To avoid this, register your trademarks early, even before entering the Chinese market. File directly with the China Trademark Office (CTMO) and don’t stop at the English version — consider registering a Chinese character version as well, since that is how your brand will often be known locally.

        Once that base is covered, clearly state in your contract that your Chinese partner is not allowed to file a registration of any of your trademarks in China, in Latin or Chinese characters, and that he will use trademarks and IP rights in strict conformance to the contract and your instructions.

        For a deeper dive into how to effectively protect your IP rights in China, check out our detailed article on the Legalmondo blog.

        Contracts can wait. First, get on the same page

        When negotiating with a Chinese partner, it’s often a mistake to begin the conversation by exchanging contract drafts. Instead, focus first on the substance — the relationship’s commercial and technical terms. Using a clear checklist of key discussion points (such as products, pricing, delivery terms, technical standards, after-sales support, exclusivity, duration, payment terms, etc.) helps ensure that both sides are aligned on what really matters. Take detailed notes and keep minutes of the discussions, especially where and when consensus is reached, and make sure those minutes are circulated and expressly agreed upon. Once substantial agreement has been achieved on the main terms, this memo can then be handed over to your lawyer, who will translate the business understanding into clear and coherent contractual language. This approach saves tons of time, as it helps avoid unnecessary back-and-forth on legal language before the core deal is in place.

        Think Your NDA Covers You in China? Think Again

        Yes, they are—and often underestimated. A well-drafted Non-Disclosure Agreement (NDA) is essential when the parties plan to exchange confidential information, such as technological know-how, commercial strategies, supplier data, or client lists. Especially in the early phases of negotiation or cooperation, before a main contract is signed, an NDA helps protect intellectual and business assets.

        However, as with all contracts in China, a generic NDA template copied from other jurisdictions will likely be of limited use. To be truly effective, the NDA must be adapted to the specifics of the Chinese legal environment. This includes ensuring that it is enforceable in China: the NDA should include the proper dispute resolution mechanism (see below on why you should consider applying Chinese law and litigating in China), and it must specify clear, valid, and proportionate penalties for breach. In Chinese practice, stating specific contractual penalties (liquidated damages) is often more effective than vague references to compensation, as courts and arbitrators in China tend to enforce these more reliably if they are reasonable.

        While a good NDA is useful, it often falls short in China’s manufacturing and sourcing landscape. This is where the NNN Agreement – standing for Non-Disclosure, Non-Use, and Non-Circumvention – becomes critical. Unlike standard NDAs that primarily focus on confidentiality, an NNN Agreement is designed to address the unique risks of doing business in China. It prevents the recipient from not only disclosing confidential information but also from using it for their benefit or bypassing the disclosing party to work directly with suppliers, clients, or partners. Which, in China, is a very real risk.

        This broader scope is vital when dealing with Chinese manufacturers or intermediaries, who may otherwise be tempted to replicate products or contact customers directly or through third parties. As seen with the NDA, also the NNN Agreement must be drafted in Chinese, governed by Chinese law, and enforceable in Chinese courts -otherwise, it may offer little real protection.

        Joint venture? Easy, Cowboy

        A joint venture is often the first proposal that comes up when negotiating with a potential Chinese partner. It seems appealing: sharing risks and investments, accessing the local market with an ally, leveraging their knowledge and network of contacts. But the reality is often very different from what it appears to be.

        A joint venture is a complex, expensive, and rigid corporate structure that requires significant investments of money, time, and human resources, as well as the ability to continuously manage often divergent interests among the partners. The vast majority of Sino-Foreign JVs have gone wrong, or will go wrong. Or very wrong. First and foremost, because the JV is usually managed by the Chinese partner, and exercising effective control over the company’s operations is a very challenging undertaking.

        Before going down this road, it is essential to ask yourself a few questions: Is the joint venture really indispensable for developing this business in China? (Spoiler: generally, no). Are there less restrictive and risky alternatives, such as a distribution agreement or a licensing agreement? (Yes, almost always). And above all: how well do we really know our potential partner?

        A joint venture should only be considered if it is strictly necessary for the project’s development, after carefully verifying the commercial viability and the reliability of the Chinese partner, and ensuring the ability to maintain effective control over the JV’s operations.

        It is better to start with simpler and more flexible forms of collaboration to test the market and the relationship with the other party before committing to such a demanding investment. Otherwise, the mirage of the joint venture risks turning into a nightmare that can be very costly.

        Memorandum of Understanding: Where Good Intentions Become Bad Contracts

        A Memorandum of Understanding (MoU) is a helpful tool at the early stage of a commercial relationship. It serves as a roadmap for future negotiations, where the parties outline the main principles and intentions that will guide the drafting of the final agreements. When used correctly, an MoU can significantly facilitate negotiations by ensuring that both sides commit to negotiating the agreement in good faith and share a common understanding of key points such as pricing models, territorial scope, exclusivity, milestones, budget, or performance expectations.

        However, an MoU must be used for what it is: a preparatory document, not a binding contract. Care must be taken to avoid ambiguity and unintended commitments. The text should clearly specify that the parties remain free to conclude – or not – the final agreements and which clauses are non-binding – such as the commercial framework or indicative timelines – and which provisions are binding, typically confidentiality, exclusivity during the negotiations (if agreed), governing law, and dispute resolution. A poorly drafted MoU, which includes overly precise and complete terms, can be misinterpreted as a final agreement, creating unnecessary legal risk. So yes, MoUs are valuable – but only when used correctly. If you’d like to know more, go deeper by reading this article.

        Bad Drafts, Big Headaches, Poor results

        Draft agreements used in China are often copied and pasted from incomplete, superficial, poorly organised templates written in bad English, which often do not match the Chinese version of the contract.

        Correcting and integrating these drafts is complicated and more time-consuming than starting from a good template, with suboptimal results.

        It would be better to propose a consistently constructed text and ask the other party to propose any changes and additions to this draft.

        Your Western Contract Template Won’t Work Here

        Even if an English-language contract is perfectly valid, there are many reasons why using contract templates built for other countries in the Chinese market is inadvisable.

        The first is the fact that Anglo-Saxon-based agreements, such as those for the U.S., refer to a common law system (which is based on judicial decisions and case law precedents) that is very different from that of civil law countries (such as China and Italy), which derives from the Roman legal tradition, based on a codified set of written laws.

        It follows that the layout of an agreement on the Anglo-Saxon model is different, much more detailed, and wordy than that of a typical agreement based on a civil law system. Since contract negotiations in China are generally lengthy and complex, working on redundant and complicated text at the outset does not help.

        If we stick to the example of a distribution contract, it should be added that it is advisable to apply Chinese law to provide for arbitration based in China (e.g., at CIETAC) or in Hong Kong or Singapore (third countries, where, however, the costs of the procedure increase significantly) as the mode of dispute resolution. So, the contract should be built on a model that conforms to the law that will apply to the relationship.

        Home Court Advantage Won’t Help You in China. In fact, quite the opposite

        This is a typical point of disagreement in the negotiation of an international contract: the parties aim to have the law of their own country apply, and to stipulate that any disputes be adjudicated by their domestic courts.

        In our case, insisting on the application of Italian (or any other foreign) law and state court is not a good idea: it should be considered, in fact, that a distribution agreement is carried out, for the vast majority, in the country where the distributor operates and where the products are sold (in our case, in mainland China).

        In disputes, the parties’ (particularly the manufacturer’s) interest is to obtain a quick decision by the adjudicating body, especially if situations requiring immediate protection (such as unfair conduct or counterfeiting of trademarks and patents by the distributor) are ongoing.

        None of this is possible if one goes to an Italian judge (with lengthy litigation time and the need then for a complex and costly process to recognise and enforce the decision in China); on the contrary,  an arbitration in China, applying Chinese law, allows one to reach a decision quickly (on average 6-9 months) and, if necessary, also to obtain urgent measures to stop any unfair conduct.

        Chinese Law Isn’t a Black Box (If You Know What You’re Doing)

        The lawyer assisting you should know it.

        Therefore, it is not a leap in the dark, and one should not fear surprises.

        In addition, it should be remembered that an agreement is primarily based on the covenants that the parties have written in the contract; therefore, if the contract has been well drafted, the rules to be applied are clear.

        Finally, if we consider distribution agreements, keep in mind that they are a framework contract, within which a series of separate product sales contracts are concluded. If both countries are contracting parties to the 1980 Vienna Convention on the International Sale of Goods (CISG), then the uniform, clear, and balanced rules of the convention apply automatically, just don’t opt out!

        One Contract, Two Languages

        The contract is also valid in English only.  However, it is undoubtedly advisable to draft a Chinese version with facing text.

        This is for several reasons: first, it prevents the Chinese party from having to arrange for a translation of the text during negotiations for its own internal use (top managers often do not speak English), thus slowing down the various steps of negotiations.

        Also, to ensure that the Chinese side fully understands the agreement’s content and to avert misunderstandings (real or instrumental) about the interpretation of certain covenants.

        Finally, it should be borne in mind that if the contract were later to be used before a court or administrative authority in China, the only language admitted would be Chinese; for this reason, it is better to have already a text agreed and signed by the parties in Chinese as well, rather than having to prepare a unilateral translation later.

        Sign. And chop

        Does the contract need to bear the company’s official stamp? Yes, and this point is absolutely crucial. In China, a company’s official «chop» (the red-ink stamp) is equivalent to a signature and is conclusive proof that the person signing the contract has the authority to represent the company. A signature alone, even from someone with an important-sounding title, may not be sufficient if it is not accompanied by the official chop. Without it, the contract might later be challenged or even considered void. Before signing, always verify that the stamp used matches the one registered with the company’s business license or official corporate records, and ensure that the stamp is applied on every page or at least on the signature page, in line with local practice.

        Don’t Let Your Contract Collect Dust

        Things change fast, especially in China. New products are added, market conditions evolve, people leave the company, new competitors emerge on the horizon, and so on. Companies constantly adapt to the new conditions, and so must the contract.

        Any change in the relationship should be formalized correctly. To avoid misunderstandings and disputes, it’s advisable to include an integration clause in the contract, specifying that any amendments or additions will only be valid if agreed in writing, signed by the parties’ authorized representatives, and annexed as an addendum to the original agreement.

        It’s not enough to include this clause – you must follow it consistently. If things change, agreements reached verbally, through Wechat messages, and through email exchanges may make things complicated if they are not formalised adequately according to the procedure set out in the original contract.

        If you’d like to go deeper, check out this article.

        Son bastante frecuentes las relaciones comerciales con agentes o distribuidores que duran años y sin ningún documento firmado. Y, cuidado, porque ya sabemos que un contrato puede existir incluso verbalmente.

        La inexistencia de un contrato escrito va a añadir dificultades en una posible reclamación, por eso, lo que se haga entre la decisión de ponerle fin y el momento de la reclamación es muy importante. Recuerda: “cualquier cosa que escribas será usada en tu contra”.

        La decisión de terminar una relación comercial es un momento muy delicado al que, no sé por qué, a los abogados no se nos invita. Os doy algunos ejemplos (todos reales) en los que las empresas o algún empleado con la mejor voluntad escribió al agente/distribuidor. Todos fueron luego muy perjudiciales para la empresa:

         

        Decir “Ponemos fin a nuestra relación comercial” cuando la estrategia será defender que dicha relación comercial no existe, sino que son contratos independientes y encadenados (por ejemplo, suministro en lugar de contrato continuado de distribución; consecuencias de indemnización muy relevantes).

        “Usted ya no representa a nuestra sociedad”, lo que puede ser una prueba de que antes sí lo hacía.

        “A partir del día X usted ya no puede actuar en nombre de nuestra sociedad” que probaría que antes sí podía actuar en su nombre.

        “Usted no puede asistir a la feria de X en nuestro nombre”. Una forma de confirmar que entre las competencias del agente/distribuidor estaba participar en ferias y probablemente acredita los clientes obtenidos.

        “Las ventas promovidas por Ud. se han visto reducidas significativamente en el año N”. Cuando no hay contrato escrito ni otra forma de documentarlo, imputar un incumplimiento de una obligación que no está clara, puede ser contraproducente.

        Decir “No estás llevando a cabo una promoción activa de nuestros productos” para añadir a continuación: “le instamos a que deje de promocionar la venta de nuestros productos”.

        “Usted deja de ser nuestro representante exclusivo”, lo que prueba un tipo de relación (representación/agente) y un acuerdo tácito o expreso (“exclusividad”)

        “Hemos designado a otro representante en su zona”, que demuestra que el agente/distribuidor tenía una zona asignada y “representaba”.

        “A partir de este momento los pedidos serán asumidos por X” que, igualmente confirma un tipo de relación.

        En resumen: a partir del momento en el que la empresa valora poner fin a una relación comercial, sobre todo cuando no está escrita y antes de enviar cualquier carta, es conveniente pensar bien en la estrategia de cara a una posible reclamación. Es el momento más adecuado para asesorarse y evitar sorpresas. Cualquier comunicación que no esté alineada con esa estrategia diseñada desde el principio solo podrá aportar confusión y problemas.

        Remember the USA – EU agreement on 15% tariffs? I wrote that with a negotiator like Trump the game is never over (article here) and—after the recent interlude featuring a threat of 100% tariffs on pharmaceuticals—the U.S. government has announced the imposition of an overall 107% duty on Italian pasta, which could take effect on January 1, 2026.

        Where this new duty comes from

        The antidumping investigation was launched by the U.S. Department of Commerce at the request of certain competing American companies and is based on a 1996 antidumping order that allows for periodic reviews of imports of Italian pasta. The Department of Commerce conducts these checks annually to assess whether Italian producers are selling pasta at prices lower than the U.S. domestic market, a practice known as “dumping.”

        Companies involved in the investigation

        The Department of Commerce selected two sample companies for in-depth analysis, defined as “mandatory respondents”: La Molisana and Pastificio Lucio Garofalo. According to the official document published by the U.S. administration, for the period from July 1, 2023 to June 30, 2024, both companies allegedly sold their products below market prices, resulting in the imposition of a duty of 91.74%.

        U.S. authorities justified this percentage by claiming the two companies did not provide complete or compliant information as requested by the Department and were therefore insufficiently cooperative during the investigation. What is very important is that, in addition to the two companies directly examined, the additional 91.74% duty is also applied to numerous other Italian producers not individually reviewed. This methodology, while formally permitted under U.S. law as an exception, is being applied without any direct verification of the other companies.

        Next steps in the procedure

        Italy’s Ministry of Foreign Affairs moved immediately, formally intervening in the proceeding as an “interested party” through the Italian Embassy in Washington. The Foreign Ministry is working in close coordination with the companies concerned and, in concert with the European Commission, to persuade the U.S. Department to revise the provisional duties.

        The two companies involved (La Molisana and Garofalo) can submit documentation to contest the dumping allegations. However, if dumping is confirmed, the Department of Commerce will instruct Customs to apply antidumping duties on goods sold and entered into U.S. commerce.

        The preliminary nature of this determination means there is still room to change the decision before it becomes final.

        Possible effective date

        The new super-duty of 91.74%, which will be added to the existing 15% tariff for a total of 107%, is scheduled to take effect on January 1, 2026. This date therefore represents a crucial deadline for all ongoing diplomatic and legal actions.

        If confirmed, the economic impact would be significant: in 2024, Italian pasta exports to the United States reached a value of €671 million according to Coldiretti, accounting for nearly 17% of the sector’s total exports. A 107% duty would risk seriously undermining competitiveness in one of the most important markets for Italian agri-food products.

         What to do between now and January 1, 2026?

        At this stage, the entry into force of the new duty depends on the outcome of the ongoing procedure: given what has happened in recent months, and the political use the U.S. administration has made of tariffs—well beyond their technical function—it is reasonable to be pessimistic.

        So, what to do? In recent months we have seen companies react to the uncertainty over the fate of the tariffs in three ways:

        • Some rushed to ship as many products as possible before the potential effective date of the duty;
        • Some granted—upfront—discounts equivalent to the threatened duty, in case it came into force;
        • Some suspended orders, pending definitive news on the impact of the duties.

        These are all  valid options, but other effective tools for managing the uncertainty caused by the flurry of announcements, negotiations, and threats from the U.S. administration should not be forgotten: the risk of new duties being introduced, or existing ones being increased, can be managed in the contract by agreeing with the U.S. importer how any tariff change will affect the product.

        The parties can stipulate, for example, that the increase will be split equally; or that the importer will bear it beyond a certain threshold; or that if the duty exceeds a certain level, the contracts may be terminated. You can find a deeper dive in this article.

        The only certainty is that trade relations with the U.S. will stay unpredictable for a long time, and it’s vital to carefully manage the risk factors involved in selling products there. Right now, the focus is on tariffs and prices, and I encourage you to take this chance to thoroughly review existing agreements and assess whether—and how—other important points are addressed that could entail significant liabilities: we discuss them, very practically, in this book.

        On 29 June 2025, the Vietnamese government introduced Decree No. 163/2025/ND-CP (Decree 163). This decree provides detailed guidance on how the updated Law on Pharmacy will be implemented.

        Like the amended Law on Pharmacy, Decree 163 came into effect on 1 July 2025, replacing the previous Decree No. 54/2017/ND-CP (Decree 54). The new decree sets out comprehensive rules for key aspects of managing pharmaceuticals, including:

        • Pharmacy practice certificates
        • Certificates allowing pharmaceutical businesses to operate
        • Import and export of medicines and drug ingredients
        • Good Manufacturing Practice (GMP) inspections of overseas manufacturers
        • Recalling medicines and drug ingredients
        • Certificates for medicine advertising content
        • Medicine price management

        Key Changes in Decree 163

        Here are some important changes and additions introduced by Decree 163:

        Destroying Specially Controlled Medicines

        You no longer need to get approval from the relevant authority before destroying narcotic, psychotropic, and precursor drugs, or pharmaceutical ingredients that are narcotic or psychotropic substances or precursors used in medicines. Instead, you just need to provide notification at least seven working days in advance. This notification must include the planned destruction date and a detailed list of items to be destroyed.

        E-commerce in Pharmaceutical

        Pharmaceutical businesses that sell products online must openly display the following information to ensure transparency and consumer safety:

        • Their certificate allowing them to operate as a pharmaceutical business.
        • The pharmacy practice certificate of the person responsible for pharmaceutical expertise.
        • Information about the medicines themselves.

        Shelf-Life Rules for Imported Products

        For medicines and ingredients with a total shelf life of nine months or less, at least one-third of their shelf life must remain when they clear customs. Medicines with a shelf life of 30 days or less must still be within their shelf life at the time of customs clearance.

        Controlling Imported Products

        All medicines with marketing authorisation (MA) are subject to import control, except for:

        • Medicines needed for preventing and treating Group A infectious diseases that have been declared epidemics, as per the Law on Prevention and Control of Infectious Diseases.
        • Medicines with a shelf life of less than 30 days.

        Importers must inform the provincial People’s Committee at least five working days before making a customs declaration. The People’s Committee can then issue a written notice of non-compliance to the customs authority within five working days of receiving this notification.

        Medicine Advertising

        Decree 163 adds a process that allows an approved medicine advertising certificate to be adjusted for certain changes (such as a change to the MA holder or manufacturer information). This means you don’t have to go through the entire initial registration process for medicine advertising content again, as was required under the previous rules.

        Medicine Price Management

        Businesses must announce or re-announce wholesale prices, similar to the medicine price declaration process under Decree 54. Some medicines are exempt from this requirement, including those provided free of charge for emergency responses, national health programmes, humanitarian aid, clinical trials, scientific research, or exhibition purposes, and medicines carried as personal luggage.

        The Ministry of Health (MOH) can make recommendations if the announced or re-announced price is significantly higher than similar medicines already on the market. This includes situations where:

        • The announced or re-announced wholesale price of the medicine is higher than the highest price of similar medicines.
        • The price difference is more than 35% (for medicines priced under VND 1 million) or 15% (for medicines priced at VND 1 million and above) compared to winning bid prices in tenders.
        • The announced or re-announced price is higher than prices in the country of origin or other markets (if there’s no similar product in Vietnam).
        • When such differences are found, the MOH issues a formal recommendation to the announcing business and publishes it online for transparency and accountability.

        Further Guidance in New Circular

        On 1 July 2025, the MOH issued Circular No. 31/2025/TT-BYT (Circular 31), which further details how the amended Law on Pharmacy and Decree 163 should be implemented. Circular 31 officially replaces Circular No. 07/2018/TT-BYT and Decree 54 and came into effect immediately.

        Key provisions of Circular 31 include:

        Notification of Practising Pharmacists

        Pharmaceutical businesses that are not part of a pharmacy chain must inform the relevant authority of a list of people currently working at the business who hold pharmacy practice certificates. This notification must be submitted within 15 days of the date the certificate allowing the pharmaceutical business to operate was issued, or when there are any changes to the list. This is a shorter deadline than the previous 30 days under earlier rules.

        Pharmacy chains have similar notification duties and deadlines. Specifically, the chain operator must inform the provincial authority where each pharmacy in the chain is located about the list of practising pharmacists at those sites. Additionally, pharmacy chains must notify the authority if pharmacies are added or removed from the chain, and if there are any rotations of the people responsible for pharmaceutical expertise between pharmacies within the chain.

        Medicine Information Activities

        Under Circular 31, medicine information can still be given to healthcare professionals through information materials, seminars, and medical representatives.

        However, Circular 31 introduces a significant change by removing the need to obtain a certificate for medicine information content before carrying out these activities. Under the new rules, pharmaceutical businesses, representative offices of foreign pharmaceutical companies in Vietnam, and MA holders are now responsible for creating and distributing medicine information materials. These materials must comply with the package inserts for medicines approved by the MOH, the Vietnamese National Drug Formulary, and any related documents and professional instructions issued or recognised by the MOH.

        Donald Trump, never one to shy away from drama or diplomacy-via-caps-lock, has slapped a 50% tariff on all Brazilian exports to the United States. The justification? In his own delicate prose: «The treatment of former President Jair Bolsonaro is a disgrace… A witch hunt that must end IMMEDIATELY!»

        And just in case anyone thought this was about trade imbalances or economic strategy, Trump made things crystal clear: «Due to Brazil’s insidious attacks on free elections…».

        In short, the 50% tariff isn’t about coffee, orange juice, or flip-flops. It’s about a Supreme Court judgment, applying Brazilian law, regarding Brazilian politicians accused of conspiring in a coup d’état. In other words, this is a brazen (and frankly absurd) attempt at judicial intervention via trade war.

        Trump, with his characteristic subtlety, offered a solution: manufacture in the U.S., and he’ll look kindly upon Brazil, like a mafia don offering «protection» after smashing your shop window. But what he meant was: consider Bolsonaro innocent, and we’ll talk.

        The Brazilian market took the bait

        Although the fishy interference in Brazilian affairs was determined from a fish out of the water, the market took the bait: in the first 48 hours after the infamous letter, at least 1500 tons of fish were already held in Brazilian ports, as US buyers suspended their contracts due to uncertainty about the costs upon arrival. The fish market is on alert, as 80% of the exports head to the US, mainly coming from small family-owned industries that distribute the catch from artisanal fishing communities.

        The same effect hit other sectors, from orange, honey, and coffee to aircraft.

        Brazil’s response and sorcery: don’t mess with us (or our weather)

        Naturally, Brazil will not sit quietly sipping caipirinhas while its sovereignty is trampled. Reciprocity is on the table: if Washington raises tariffs, Brasília can do the same. But above all, one thing is sure: Brazil will never tolerate foreign interference in its independent judiciary.

        And then, a curious coincidence: right after Trump’s speech, a tornado accompanied by lightning struck the White House grounds. Pure chance? Maybe. Or could it have been the work of Brazilian indigenous shamans, a particularly well-organized group of umbanda practitioners, or simply the fact that, as every Brazilian child knows, God is Brazilian.

        Trump might want to check the weather forecast next time before penning another angry letter.

        The unpredictable becoming predictable

        Trade wars are rarely tidy affairs, but one thing they consistently deliver is chaos (in legal terms, disruption). And when disruption meets contracts, force majeure disputes often end up in court.

        At first glance, Trump’s decision to impose a 50% tariff overnight might feel like an unpredictable thunderbolt (quite literally, given the weather at the White House). But here’s the catch: by now, unpredictable tariffs are becoming predictable. When a government with a well-documented love for impulsive economic diplomacy imposes politically motivated tariffs, can anyone claim to be surprised?

        In most jurisdictions, force majeure requires that the event be extraordinary, unforeseeable, and beyond the parties’ control. A sudden 50% tariff certainly ticks a few of those boxes, but following a repetition of erratic trade policy, one might argue that businesses should expect what in past times was considered unexpected, especially when dealing with certain jurisdictions or political figures. In other words, Trump’s tariffs might not excuse performance if parties didn’t prepare for exactly this kind of volatility.

        This is where good contract drafting comes into play

        Savvy businesses are learning that their contracts must go beyond a vague boilerplate clause about “acts of government” or “changes in law.” Instead, they should expressly address the risk of sudden tariff changes, including

        • hardship clauses that allow renegotiation when costs become commercially unreasonable;
        • price adjustment mechanisms linked to tariff thresholds;
        • termination rights triggered by specified levels of customs duties;
        • currency fluctuation provisions (because tariffs rarely travel alone, and currency swings often accompany them).

        In short, while no contract can immunize a business from every shock, smart drafting can mean the difference between a commercial headache and a catastrophic breach.

        Therefore, tariffs may no longer be an unpredictable storm; they are part of the new predictable landscape. Given that your contract might wake up tomorrow facing ‘IMMEDIATE’ punitive tariffs in all caps, your contract should be ready today.

        The unwitting cupid: strengthening EU-Brazil relations

        While the tariffs may ruffle trade flows between Brasília and Washington, there’s an unintended silver lining: Trump is proving to be the most efficient matchmaker between Brazil and other markets, such as China and the European Union.

        The EU-Brazil relationship, already a flirtation with promising prospects, with relevant progress in the EU-Mercosur Agreement, now seems destined for deeper romance. If Mr. Trump insists on isolating the US from Brazil, the old continent stands ready, with flowers and wine in hand, to pick up where the US left off. After all, Brazilian fish can pair up nicely with champagne, cava and prosecco.

        So thank you, Mr. Trump. In your quest to bully Brazil into submission, you may have done more to strengthen transatlantic ties than any EU Commissioner ever could. As they say in Brasília these days: Trump is not a trade warrior. He’s a cupid in disguise.

        The recent announcement of a landmark trade agreement framework, following just three months negotiations since President Trump’s tariffs announcement on 2 April 2025, signals a pivotal shift, not merely in bilateral relations, but in the broader architecture of global supply chains.

        As a commercial lawyer with exposure to Vietnam since 2007, I have observed the evolving dynamics between the United States and Vietnam through the years, talking to students, entrepreneurs, veterans, diplomats, humans from all walks all life, from both nations and beyond.

        You may recall that Vietnam, with the notable exclusion of China, was to be the nation that would encounter the most stringent tariffs imposed by the Trump administration, reaching an astonishing 46%.

        The newly forged framework outlines significant reciprocal concessions designed to foster greater trade and investment flows. Granted, pre-April 2 tariffs applied by the USA on Vietnamese goods were lower than what emerges from the framework agreement, but still, it is better than 46%),

        The United States has committed to imposing a 20% tariff on most Vietnamese imports, a notable reduction from the previously mooted 46%. However, a substantial 40% tariff will apply to goods re-exported from third countries, with a particular focus on those originating from China.

        Vietnam has pledged to open its market to a wide array of US products. Crucially, it has also committed to implementing stringent measures aimed at restricting the transshipment of Chinese goods through its territory, a long-standing concern for Washington.

        In a significant win for American exporters, US goods will now enjoy duty-free access to the Vietnamese market, effectively granting “total access”, particularly for large-engine vehicles such as SUVs, as emphatically stated by President Trump (how SUVs are going to circulate in the narrow alleys of Hanoi and Ho Chi Minh City, infested by swarms of mopeds, is a different story).

        This agreement is expected to catalyse growth in several key sectors. Electronics, textiles, furniture, energy (especially Liquefied Natural Gas), and agriculture are poised for expansion. US firms specialising in manufacturing technology, energy solutions, and agricultural products are anticipated to be the primary beneficiaries. Furthermore, beyond immediate trade benefits, the agreement is set to reshape investment strategies, encouraging a greater localisation of supply chains within Vietnam. This strategic realignment is also expected to further solidify the already robust US-Vietnam Comprehensive Strategic Partnership.

        While the potential upsides are considerable, it is imperative for businesses and investors to approach this new landscape with a clear understanding of the accompanying risks. From my vantage point, I identify several significant execution challenges and structural impediments that require close monitoring.

        Enforcement of Transshipment Controls

        The most immediate and perhaps formidable risk lies in the effective enforcement of transshipment controls. Vietnam has historically served as a significant assembly point for Chinese-manufactured components. Ensuring that goods originating from China are not merely re-routed through Vietnam to circumvent US tariffs will require exceptionally close monitoring and robust verification mechanisms. The legal and practical complexities of definitively determining the true country of origin for all goods will undoubtedly pose a persistent challenge. As a European citizen, witnessing how the EU-Vietnam Free Trade Agreement (“EVFTA”), which poses an important stress on certificates of origin, I am particularly aware of this matter.

        While Vietnam has made remarkable strides in its economic development, certain structural issues could hinder its capacity to scale up high-value manufacturing in the short to medium term. These include:

        Legal framework nuances

        Vietnam’s legal framework for foreign investment has seen continuous improvements, but legal and cultural complexities and inconsistencies can and do still arise. Navigating the regulatory landscape, particularly with new rules stemming from this agreement and at a time of deep administrative, governmental, digital and legal reforms in Vietnam, will demand expert legal guidance to ensure compliance and mitigate potential fines and disputes. Issues surrounding so-called sublicences for businesses, intellectual property rights enforcement and contract enforceability, whilst improving, still require careful consideration;

        Education

        The ambition to transform Vietnam into a high-value manufacturing hub necessitates a workforce equipped with advanced skills. While the Vietnamese government prioritises education and workforce development, a significant portion of the current labour force lacks formal training and specialised certifications, let alone a good command of the English language. Bridging this skills gap, particularly in areas like advanced manufacturing, engineering, and digital technologies is a necessity and not just in light of this framework agreement. Companies may need to factor in substantial investment in training and upskilling programmes for their Vietnamese employees.

        Infrastructures

        Despite considerable investment, Vietnam’s infrastructure, particularly in logistics, energy, and transportation, continues to face bottlenecks. And China – the apparent target of Trump’s tariffs – is stepping in with high-speed trains connecting it to the northern Provinces of Vietnam. An increased volume of high-value manufacturing and trade will place further strain on existing infrastructure. Inadequate port capacity, congested roads, and a reliable energy supply (including for EV charging) are critical concerns that could impact efficiency and increase operational costs for businesses.

        Policy divergence

        This framework agreement deepens US-Vietnam trade ties and seems to be paving the way for more US investments in Vietnam, but this second aspect seems to run counter to parallel US policy objectives aimed at reshoring manufacturing back to the United States. This potential divergence in strategic priorities could introduce yet another element of unpredictability in the long term, necessitating a flexible and adaptable investment approach. Future shifts in US policy could impact the durability and full extent of the benefits derived from this agreement.

        This trade agreement, if finalised and implemented, undoubtedly represents a structural shift in global trade dynamics. It strategically positions Vietnam as an increasingly important high-value manufacturing hub and significantly deepens US engagement in Southeast Asia. We will need time, however, to assess the practical impact of the agreement, observing the efficacy of its implementation, and understanding how Vietnam’s inherent strengths and challenges will ultimately shape its role in the reconfigured global supply chain.

        We will also need to see what China, if anything, will do as a countermeasure. In fact, any assessment of Vietnam’s evolving trade landscape would be incomplete without a thorough consideration of China’s influence and strategic posture. President Xi Jinping has consistently championed a vision of a “community of shared future for mankind,” a concept that, while outwardly promoting global cooperation, also subtly underscores a demand for international alignment with Beijing’s interests. In the context of escalating trade tensions, Xi has repeatedly warned that “trade wars have no winners,” advocating for unity against protectionist measures, yet simultaneously implying that nations must ultimately choose sides, either with or against China’s economic and political orbit. Vietnam, despite its historical complexities and occasional maritime disputes with Beijing in the South China Sea (or East Sea, as it is officially called by Hanoi), remains deeply interwoven with China’s economy. China has been Vietnam’s largest trading partner for many years, with significant inflows of Chinese FDI, loans, and project contractors. This economic dependency is particularly evident in various sectors, where Chinese components and materials form a substantial part of Vietnamese manufacturing supply chains. While Vietnam has actively sought to diversify its trade partners and reduce its reliance on China, the sheer scale of the bilateral economic relationship means that disentanglement is a long-term, complex endeavour. Furthermore, China’s influence extends beyond direct trade into crucial regional resources. The Mekong River, a lifeline for millions in Southeast Asia, originates in China, which has constructed numerous upstream dams.

        As Vietnam navigates its enhanced trade relationship with the United States, it must simultaneously contend with the enduring economic gravity and strategic ambitions of its northern giant neighbour. Any perceived move by Vietnam to significantly shift away from China could invite retaliatory measures or heightened pressure from Beijing. Businesses investing in Vietnam must not only grasp the intricacies of the US-Vietnam agreement but also meticulously analyse how these developments will intersect with, and potentially be impacted by, the intricate, often delicate, and sometimes fraught relationship between Hanoi and Beijing. Understanding this geopolitical tightrope will be essential for sustainable success in the Vietnamese market. Prudence, informed legal counsel, and a keen eye on evolving geopolitical and economic realities will be paramount for those seeking to capitalise on this transformative new chapter.

        Takeaways

        • Tariffs:The US-Vietnam framework agreement marks a significant departure from previous trade dynamics, reducing US tariffs on most Vietnamese imports to 20% (from a mooted 46%) while imposing a 40% tariff on transshipped goods, especially from China.
        • Vietnam’s market opening:Vietnam has committed to duty-free access for a broad range of US products and stricter controls on Chinese goods transiting its territory.
        • Growth / manufacturing shift potential:The agreement is expected to fuel expansion in Vietnamese electronics, textiles, furniture, energy (LNG), and agriculture. It also encourages supply chain localisation within Vietnam (normally more of an assembly point for Chinese products).
        • Execution challenges: Effectively preventing the re-routing of Chinese goods through Vietnam to avoid tariffs will be a complex and demanding task; Despite economic progress, Vietnam faces hurdles in scaling high-value manufacturing due to legal framework nuances (e.g., sublicences, IP enforcement), a skills gap in its workforce (lack of formal training, English proficiency) and infrastructure bottlenecks (logistics, energy, transportation).
        • US policy divergence:The agreement’s encouragement of US investment in Vietnam appears to contradict the broader US policy objective of reshoring manufacturing.
        • China:Businesses must consider China’s significant economic sway over Vietnam, including its position as Vietnam’s largest trading partner, its FDI, and its control over shared resources like the Mekong River. Any major shift by Vietnam away from China could lead to retaliatory measures from Beijing.
        • Uncertainty:This is not a final agreement, so the situation might change. Prudence and informed legal counsel are crucial for businesses navigating this evolving landscape.

        Roberto Luzi Crivellini

        Áreas de práctica

        • Arbitraje
        • Contratos de distribución
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          Vietnam | Updated Law on Pharmacy

          21 de julio de 2025

          • Vietnam
          • Contratos de distribución
          • Comercio internacional
          • Derecho Farmacéutico

          Executive Summary

          The African Continental Free Trade Area (AfCFTA) remains one of the most ambitious integration projects in the world. Yet, several years into its operational phase, it has not (yet) delivered the structural shift many expected. A recent analysis underscores the gap between political momentum and economic reality: implementation remains uneven, the agreement is still used by only a portion of participating states, and non-tariff barriers and infrastructure deficits continue to dominate the cost of doing business across borders.  For Egypt, the opportunity is still real — but it depends less on treaty headlines and more on enabling conditions: trade logistics, customs efficiency, regulatory convergence, and competitive industrial capacity. 

          Looking Back: The Promise of a Single African Market

          When the AfCFTA was launched, expectations were understandably high. A continent-wide trade framework was supposed to reduce tariffs, facilitate trade in goods and services, and strengthen regional value chains — with the broader goal of moving African economies up the value ladder.

          In my 2022 article, I asked whether AfCFTA could become a game changer for Egypt, given Egypt’s industrial base, strategic geography, and the potential to diversify export markets beyond traditional partners. (For background, see the earlier article here”).

          The Reality Check: Intra-African Trade Remains Structurally Weak

          Several years later, the interim assessment is sobering. As the Frankfurter Allgemeine Zeitung (FAZ) recently put it, AfCFTA is not a “game changer” yet, and only about half of member states currently meet the practical prerequisites to trade under the agreement.

          A deeper reason is structural: no other world region trades so little with itself, and while statistics may undercount informal cross-border flows (especially in food), the overall picture remains unchanged.

          Trade integration cannot deliver transformative outcomes if production, logistics, and institutions do not support scale.

          Implementation Has Been Slow — and Often Symbolic

          Operationalisation did not start with full-scale liberalisation. Instead, the AfCFTA began with a pilot approach: the Guided Trade Initiative (GTI) launched in October 2022, initially with eight states, later joined by additional countries, including Nigeria and South Africa by spring 2025.

          The GTI created valuable learning effects, but it also underlined a key point: early progress was often presented through symbolic deals, while product coverage and volumes remained limited. FAZ highlights that only selected goods could be traded duty-free and that key sectors remained constrained for a long time due to missing or unresolved technical rules.

          A pilot, however, cannot substitute for full operational certainty — the kind businesses need to restructure supply chains and invest.

          Tariffs Are Not the Main Barrier — Trade Costs Are

          AfCFTA is frequently discussed in terms of tariff liberalisation. Yet, evidence suggests that the largest gains do not come from tariffs but from reducing non-tariff barriers and improving trade infrastructure.

          FAZ points to a central reality: tariffs tend to add around 20–30% to intra-African trade costs, whereas non-tariff costs can be far higher — driven by bureaucracy, lack of harmonised standards, inefficient border processes, and transport barriers.

          This is the crux: even with reduced tariffs, trade will not expand meaningfully if goods still cannot move cheaply, quickly, and predictably.

          Integration Complexity and Distributional Politics

          Africa’s integration landscape is shaped by multiple overlapping regional economic communities and trade regimes. This creates legal and administrative complexity — often described as an integration “spaghetti bowl.” FAZ notes the challenge of coordination and the continued fragmentation of rules.

          There is also a political economy dimension. Intra-African trade is heavily influenced by a small number of larger economies — and the distribution of benefits matters. FAZ highlights the dominance of major players (notably South Africa) and the concern that tariff liberalisation alone may entrench existing industrial advantages.

          Where governments expect asymmetric outcomes, resistance often takes the form of delay, narrow implementation, or persistent non-tariff barriers.

          What This Means for Egypt: The Opportunity Is Real — But Conditional

          Egypt’s strategic case for AfCFTA participation remains strong: industrial potential, geographic location, and the opportunity to access and shape growing markets. But the experience so far suggests that the treaty text alone does not generate trade flows.

          For Egypt’s private sector, the decisive factors are practical:

          • predictable and efficient customs clearance and border procedures,
          • logistics corridors and port efficiency,
          • regulatory convergence (standards, certification, compliance),
          • stable access to trade finance and payments,
          • competitive energy and production conditions for manufacturing and processing.

          AfCFTA can support these developments — but it cannot replace them.

          The “Game Changer” Pathway: What Must Happen Next

          FAZ concludes that AfCFTA will only become truly impactful if it is paired with the fundamentals: major infrastructure investment, stronger production and processing capacity, and a credible industrial policy.

          At the same time, Africa faces a classic chicken-and-egg problem: without development there is limited investment appeal; without investment there is limited development.

          For Egypt and its partners, a pragmatic strategy would be to:

          1. treat AfCFTA as a platform for real trade-cost reduction, not only tariff debates;
          2. focus on a limited number of scalable corridors and sectors where regional value chains can realistically grow;
          3. strengthen implementation capacity so that preferences become usable for firms — especially SMEs;
          4. enhance legal certainty and dispute resolution reliability for cross-border commerce.

          Conclusion

          AfCFTA remains a landmark achievement in terms of political commitment. But as of today, it has not yet been the “game changer” many hoped for.

          For Egypt, the key question is no longer whether AfCFTA is visionary — it is. The question is whether governments and businesses can translate it into lower real trade costs, higher competitiveness, and bankable cross-border transactions. If those enabling conditions improve, AfCFTA’s promise can still become commercial reality.

          After “Liberation Day,” many foreign companies offered discounts to American importers to help them offset the tariffs. A few months later, the US Supreme Court declared the «reciprocal» tariffs unlawful, but on the same day, President Trump announced new tariffs. In this article, we provide a practical overview of how to handle various scenarios, shifting from a reactive, unstructured approach to deliberate management of price volatility and trade flows caused by the introduction, adjustment, and removal of tariffs.

          Tariff Sharing agreements

          For a long time, the question has been straightforward: who absorbs the extra customs cost? The exporter? The importer? Both? The question remains important, but today it is incomplete.

          The new scenario, in light of the recent ruling by the US Court of Justice on March 20, 2026, is: what happens if that duty is then canceled and refunded? If the cost was shared between the parties, the benefit of the refund must follow a consistent logic. In the absence of a clear agreement on this point, however, there is a risk of economic misalignment that could compromise the commercial relationship.

          Let’s imagine an Italian winery that sells its products to a US importer. Following the introduction of reciprocal duties, the parties have decided that the exporter will grant an extraordinary discount of 7.5%, explicitly motivated by the need to share the impact of the duty. The commercial relationship continues, volumes remain stable, and the importer avoids passing on the entire increase to the end customer.

          As a result of the Supreme Court ruling (or, in the future, another ruling or administrative decision), the importer obtains a refund of the duties paid during that period.

          If no formal agreements have been made on this point and the documentation refers generically to a «commercial discount» and says nothing about reimbursement, the situation afterward may be difficult to reconstruct and, above all, could lead to commercial tension. As a result, a positive development (the cancellation of the duty and the right to reimbursement) becomes a problematic factor that jeopardizes the relationship.

          Is the exporter entitled to a refund of the discounts granted to mitigate the duties?

          In the absence of a different agreement between the parties, the right to reimbursement belongs to the party who paid the duty, i.e., in most cases, the importer. Therefore, there is a risk that the importer will enjoy a double benefit (the discount and the duty refund), while the exporter will get nothing.

          For this reason, it is essential that the parties do not limit themselves to negotiating prices and discounts, but also establish the consequences of the adoption, modification, or revocation of duties on the contract, including any refunds.

          To achieve this, the first step is to accurately classify and document the discounts granted. If only a «commercial discount» appears in emails, commercial orders, credit notes, and invoices, it will be harder to later argue that this discount was actually an extraordinary, temporary contribution related to the duty. Conversely, if the documentation and contract specify that it is a tariff sharing or tariff mitigation measure, identifying the amounts to be refunded after the fact becomes much simpler.

          The goal is to create a clear view of the trend in discounts and payments so that, if needed, financial flows can be adjusted to align with the original terms of the agreement: if the exporter has helped cover a cost that then, in whole or in part, does not end up materializing, they will be eligible for a refund of the contribution paid.

          The contract will therefore include, in addition to the Tariff Sharing clause, a Tariff Reimbursement Allocation clause, which states that if the importer receives a refund, credit, or any other economic benefit related to the duty for which the exporter has granted a discount, the importer must return the corresponding portion of the benefit to the exporter in full. or proportionally, depending on how the parties intend to distribute risk and incentive.

          Importer’s responsibility to seek reimbursement

          It is unclear whether, in the case of US reciprocal duties, importers can simply file an administrative claim to get a refund or if legal action will be required. The latter seems more probable.

          Generally, obtaining a duty refund involves action, deadlines, documentation, and coordination with brokers and customs consultants. In most cases, the entity controlling the process is the importer (or someone acting on their behalf).

          This raises a sensitive but very real issue: if the importer knows that they will have to invest time and money to obtain a refund, only to then have to share the benefit with the exporter, their incentive to take action may be reduced. To prevent this inertia  the contract should contain an express obligation to take action, set out as a duty of best efforts or commercially reasonable efforts.

          For example, the contract should specify that the importer must inquire about the conditions and time limits of the process, keep relevant documentation, regularly inform the exporter about the progress of the initiatives, and not unilaterally waive or reduce the claim if it affects the exporter’s economic rights.

          Preventive Agreements on Litigation and Cost Allocation

          When reimbursement involves a lawsuit or structured legal action, the obstacles are organizational and financial: who decides if and when to proceed, who selects the lawyers, who pays the costs upfront, how the net recovery is divided, and who has the final say on a settlement. This generally applies to all contracts, not just this case: dispute resolution methods must be addressed and agreed upon before the problem arises.

          Otherwise, the dispute resolution process risks becoming a secondary improvised negotiation at the worst time — when the parties are already under pressure from margins, cash flow, and regulatory uncertainty. As a result, it becomes much harder to reach an agreement.

          How to handle new tariffs and their potential cancellation

          To safeguard against uncertainty, the agreement should be organized into two stages.

          • The first stage regulates the immediate impact of the change in scenario, for example, the introduction of a new tariff or its increase (renegotiation, cost sharing, automatic adjustment : I discussed this in this article).
          • The second stage manages the possible «rollback» (right to reimbursement, process, allocation criteria).

          This approach has a clear benefit: it does not force the parties to discuss every time the tariff regime changes or a decision to cancel tariffs is made. Instead of reacting to market changes, a tool is adopted to manage potential scenarios, which is much more resilient commercially and easier to oversee, as the rules have already been agreed upon.

          This allows the impact of duties to be regulated not as an extraordinary variable, to be agreed upon on a one-time basis, but as a structural, adaptable phenomenon that could last a long time.

          This is why it is crucial to know how to draft contracts that cover both the current situation and potential changes, including any refunds.

          Conclusion: Three practical steps for companies exporting to the US

          The first is to agree on the consequences for the contract of the introduction of a new duty, increasing it, or revoking it (renegotiation, cost sharing, automatic price adjustment, right to share the refund).

          The second is to clearly document any discount granted to offset a duty. If it remains a generic «commercial discount,» the right to a refund if reimbursement occurs will be much harder to enforce.

          The third step is to determine what happens if the duty is canceled or revoked: the importer’s responsibility to take action to get a refund, manage the administrative process or litigation, how to divide costs, who oversees the activities of consultants and lawyers, and how the recovered funds will be allocated.

          How do you approach negotiating a trade agreement with China?

          Based on my experience, let’s examine the issues to be addressed and the main questions to ask, taking the negotiation of a trade distribution agreement as a practical example.

          Let’s start with the first issue that is important to clarify.

          Nice Business Card – But Who Is This Guy?

          Business cards, websites, printed or digital brochures, presentations, and any other materials shared in English have no official value in China.

          The company name of the counterparty and the first and last names of people representing it or acting on its behalf, written in English, are only fictitious names.

          To be certain of the company’s data and the identity of the persons, it is necessary to ask for the information in Chinese, with particular reference to the company’s business license (equivalent to the Companies House or Chamber of Commerce’s excerpt), from which the name, corporate purpose, registered and paid-up share capital, and the name of the legal representative can be inferred.

          The data can then be verified by accessing the portal of the State Administration of Industry and Commerce (SAIC) of the province where the Chinese party is based.

          This first verification is essential to ensure that you do not waste time or even run into scams (here’s an in-depth article on Legalmondo’s blog).

          If You Don’t Own Your Trademark, Someone Else Will – and Charge You for It

          Trademark First, Trade Later. China operates on a first-to-file system for trademarks, which means that the first person or company to register a trademark – not necessarily the original creator or most famous user – gains the legal rights to it. This creates a serious risk: if you haven’t registered your trademark in China, someone else might do it before you, and then either use it freely or demand a hefty ransom to give it back. Even high-profile figures like Elon Musk and Michael Jordan have been entangled in costly and protracted disputes with Chinese trademark squatters. In many cases, getting the mark back is highly complicated, and sometimes legally impossible.

          To avoid this, register your trademarks early, even before entering the Chinese market. File directly with the China Trademark Office (CTMO) and don’t stop at the English version — consider registering a Chinese character version as well, since that is how your brand will often be known locally.

          Once that base is covered, clearly state in your contract that your Chinese partner is not allowed to file a registration of any of your trademarks in China, in Latin or Chinese characters, and that he will use trademarks and IP rights in strict conformance to the contract and your instructions.

          For a deeper dive into how to effectively protect your IP rights in China, check out our detailed article on the Legalmondo blog.

          Contracts can wait. First, get on the same page

          When negotiating with a Chinese partner, it’s often a mistake to begin the conversation by exchanging contract drafts. Instead, focus first on the substance — the relationship’s commercial and technical terms. Using a clear checklist of key discussion points (such as products, pricing, delivery terms, technical standards, after-sales support, exclusivity, duration, payment terms, etc.) helps ensure that both sides are aligned on what really matters. Take detailed notes and keep minutes of the discussions, especially where and when consensus is reached, and make sure those minutes are circulated and expressly agreed upon. Once substantial agreement has been achieved on the main terms, this memo can then be handed over to your lawyer, who will translate the business understanding into clear and coherent contractual language. This approach saves tons of time, as it helps avoid unnecessary back-and-forth on legal language before the core deal is in place.

          Think Your NDA Covers You in China? Think Again

          Yes, they are—and often underestimated. A well-drafted Non-Disclosure Agreement (NDA) is essential when the parties plan to exchange confidential information, such as technological know-how, commercial strategies, supplier data, or client lists. Especially in the early phases of negotiation or cooperation, before a main contract is signed, an NDA helps protect intellectual and business assets.

          However, as with all contracts in China, a generic NDA template copied from other jurisdictions will likely be of limited use. To be truly effective, the NDA must be adapted to the specifics of the Chinese legal environment. This includes ensuring that it is enforceable in China: the NDA should include the proper dispute resolution mechanism (see below on why you should consider applying Chinese law and litigating in China), and it must specify clear, valid, and proportionate penalties for breach. In Chinese practice, stating specific contractual penalties (liquidated damages) is often more effective than vague references to compensation, as courts and arbitrators in China tend to enforce these more reliably if they are reasonable.

          While a good NDA is useful, it often falls short in China’s manufacturing and sourcing landscape. This is where the NNN Agreement – standing for Non-Disclosure, Non-Use, and Non-Circumvention – becomes critical. Unlike standard NDAs that primarily focus on confidentiality, an NNN Agreement is designed to address the unique risks of doing business in China. It prevents the recipient from not only disclosing confidential information but also from using it for their benefit or bypassing the disclosing party to work directly with suppliers, clients, or partners. Which, in China, is a very real risk.

          This broader scope is vital when dealing with Chinese manufacturers or intermediaries, who may otherwise be tempted to replicate products or contact customers directly or through third parties. As seen with the NDA, also the NNN Agreement must be drafted in Chinese, governed by Chinese law, and enforceable in Chinese courts -otherwise, it may offer little real protection.

          Joint venture? Easy, Cowboy

          A joint venture is often the first proposal that comes up when negotiating with a potential Chinese partner. It seems appealing: sharing risks and investments, accessing the local market with an ally, leveraging their knowledge and network of contacts. But the reality is often very different from what it appears to be.

          A joint venture is a complex, expensive, and rigid corporate structure that requires significant investments of money, time, and human resources, as well as the ability to continuously manage often divergent interests among the partners. The vast majority of Sino-Foreign JVs have gone wrong, or will go wrong. Or very wrong. First and foremost, because the JV is usually managed by the Chinese partner, and exercising effective control over the company’s operations is a very challenging undertaking.

          Before going down this road, it is essential to ask yourself a few questions: Is the joint venture really indispensable for developing this business in China? (Spoiler: generally, no). Are there less restrictive and risky alternatives, such as a distribution agreement or a licensing agreement? (Yes, almost always). And above all: how well do we really know our potential partner?

          A joint venture should only be considered if it is strictly necessary for the project’s development, after carefully verifying the commercial viability and the reliability of the Chinese partner, and ensuring the ability to maintain effective control over the JV’s operations.

          It is better to start with simpler and more flexible forms of collaboration to test the market and the relationship with the other party before committing to such a demanding investment. Otherwise, the mirage of the joint venture risks turning into a nightmare that can be very costly.

          Memorandum of Understanding: Where Good Intentions Become Bad Contracts

          A Memorandum of Understanding (MoU) is a helpful tool at the early stage of a commercial relationship. It serves as a roadmap for future negotiations, where the parties outline the main principles and intentions that will guide the drafting of the final agreements. When used correctly, an MoU can significantly facilitate negotiations by ensuring that both sides commit to negotiating the agreement in good faith and share a common understanding of key points such as pricing models, territorial scope, exclusivity, milestones, budget, or performance expectations.

          However, an MoU must be used for what it is: a preparatory document, not a binding contract. Care must be taken to avoid ambiguity and unintended commitments. The text should clearly specify that the parties remain free to conclude – or not – the final agreements and which clauses are non-binding – such as the commercial framework or indicative timelines – and which provisions are binding, typically confidentiality, exclusivity during the negotiations (if agreed), governing law, and dispute resolution. A poorly drafted MoU, which includes overly precise and complete terms, can be misinterpreted as a final agreement, creating unnecessary legal risk. So yes, MoUs are valuable – but only when used correctly. If you’d like to know more, go deeper by reading this article.

          Bad Drafts, Big Headaches, Poor results

          Draft agreements used in China are often copied and pasted from incomplete, superficial, poorly organised templates written in bad English, which often do not match the Chinese version of the contract.

          Correcting and integrating these drafts is complicated and more time-consuming than starting from a good template, with suboptimal results.

          It would be better to propose a consistently constructed text and ask the other party to propose any changes and additions to this draft.

          Your Western Contract Template Won’t Work Here

          Even if an English-language contract is perfectly valid, there are many reasons why using contract templates built for other countries in the Chinese market is inadvisable.

          The first is the fact that Anglo-Saxon-based agreements, such as those for the U.S., refer to a common law system (which is based on judicial decisions and case law precedents) that is very different from that of civil law countries (such as China and Italy), which derives from the Roman legal tradition, based on a codified set of written laws.

          It follows that the layout of an agreement on the Anglo-Saxon model is different, much more detailed, and wordy than that of a typical agreement based on a civil law system. Since contract negotiations in China are generally lengthy and complex, working on redundant and complicated text at the outset does not help.

          If we stick to the example of a distribution contract, it should be added that it is advisable to apply Chinese law to provide for arbitration based in China (e.g., at CIETAC) or in Hong Kong or Singapore (third countries, where, however, the costs of the procedure increase significantly) as the mode of dispute resolution. So, the contract should be built on a model that conforms to the law that will apply to the relationship.

          Home Court Advantage Won’t Help You in China. In fact, quite the opposite

          This is a typical point of disagreement in the negotiation of an international contract: the parties aim to have the law of their own country apply, and to stipulate that any disputes be adjudicated by their domestic courts.

          In our case, insisting on the application of Italian (or any other foreign) law and state court is not a good idea: it should be considered, in fact, that a distribution agreement is carried out, for the vast majority, in the country where the distributor operates and where the products are sold (in our case, in mainland China).

          In disputes, the parties’ (particularly the manufacturer’s) interest is to obtain a quick decision by the adjudicating body, especially if situations requiring immediate protection (such as unfair conduct or counterfeiting of trademarks and patents by the distributor) are ongoing.

          None of this is possible if one goes to an Italian judge (with lengthy litigation time and the need then for a complex and costly process to recognise and enforce the decision in China); on the contrary,  an arbitration in China, applying Chinese law, allows one to reach a decision quickly (on average 6-9 months) and, if necessary, also to obtain urgent measures to stop any unfair conduct.

          Chinese Law Isn’t a Black Box (If You Know What You’re Doing)

          The lawyer assisting you should know it.

          Therefore, it is not a leap in the dark, and one should not fear surprises.

          In addition, it should be remembered that an agreement is primarily based on the covenants that the parties have written in the contract; therefore, if the contract has been well drafted, the rules to be applied are clear.

          Finally, if we consider distribution agreements, keep in mind that they are a framework contract, within which a series of separate product sales contracts are concluded. If both countries are contracting parties to the 1980 Vienna Convention on the International Sale of Goods (CISG), then the uniform, clear, and balanced rules of the convention apply automatically, just don’t opt out!

          One Contract, Two Languages

          The contract is also valid in English only.  However, it is undoubtedly advisable to draft a Chinese version with facing text.

          This is for several reasons: first, it prevents the Chinese party from having to arrange for a translation of the text during negotiations for its own internal use (top managers often do not speak English), thus slowing down the various steps of negotiations.

          Also, to ensure that the Chinese side fully understands the agreement’s content and to avert misunderstandings (real or instrumental) about the interpretation of certain covenants.

          Finally, it should be borne in mind that if the contract were later to be used before a court or administrative authority in China, the only language admitted would be Chinese; for this reason, it is better to have already a text agreed and signed by the parties in Chinese as well, rather than having to prepare a unilateral translation later.

          Sign. And chop

          Does the contract need to bear the company’s official stamp? Yes, and this point is absolutely crucial. In China, a company’s official «chop» (the red-ink stamp) is equivalent to a signature and is conclusive proof that the person signing the contract has the authority to represent the company. A signature alone, even from someone with an important-sounding title, may not be sufficient if it is not accompanied by the official chop. Without it, the contract might later be challenged or even considered void. Before signing, always verify that the stamp used matches the one registered with the company’s business license or official corporate records, and ensure that the stamp is applied on every page or at least on the signature page, in line with local practice.

          Don’t Let Your Contract Collect Dust

          Things change fast, especially in China. New products are added, market conditions evolve, people leave the company, new competitors emerge on the horizon, and so on. Companies constantly adapt to the new conditions, and so must the contract.

          Any change in the relationship should be formalized correctly. To avoid misunderstandings and disputes, it’s advisable to include an integration clause in the contract, specifying that any amendments or additions will only be valid if agreed in writing, signed by the parties’ authorized representatives, and annexed as an addendum to the original agreement.

          It’s not enough to include this clause – you must follow it consistently. If things change, agreements reached verbally, through Wechat messages, and through email exchanges may make things complicated if they are not formalised adequately according to the procedure set out in the original contract.

          If you’d like to go deeper, check out this article.

          Son bastante frecuentes las relaciones comerciales con agentes o distribuidores que duran años y sin ningún documento firmado. Y, cuidado, porque ya sabemos que un contrato puede existir incluso verbalmente.

          La inexistencia de un contrato escrito va a añadir dificultades en una posible reclamación, por eso, lo que se haga entre la decisión de ponerle fin y el momento de la reclamación es muy importante. Recuerda: “cualquier cosa que escribas será usada en tu contra”.

          La decisión de terminar una relación comercial es un momento muy delicado al que, no sé por qué, a los abogados no se nos invita. Os doy algunos ejemplos (todos reales) en los que las empresas o algún empleado con la mejor voluntad escribió al agente/distribuidor. Todos fueron luego muy perjudiciales para la empresa:

           

          Decir “Ponemos fin a nuestra relación comercial” cuando la estrategia será defender que dicha relación comercial no existe, sino que son contratos independientes y encadenados (por ejemplo, suministro en lugar de contrato continuado de distribución; consecuencias de indemnización muy relevantes).

          “Usted ya no representa a nuestra sociedad”, lo que puede ser una prueba de que antes sí lo hacía.

          “A partir del día X usted ya no puede actuar en nombre de nuestra sociedad” que probaría que antes sí podía actuar en su nombre.

          “Usted no puede asistir a la feria de X en nuestro nombre”. Una forma de confirmar que entre las competencias del agente/distribuidor estaba participar en ferias y probablemente acredita los clientes obtenidos.

          “Las ventas promovidas por Ud. se han visto reducidas significativamente en el año N”. Cuando no hay contrato escrito ni otra forma de documentarlo, imputar un incumplimiento de una obligación que no está clara, puede ser contraproducente.

          Decir “No estás llevando a cabo una promoción activa de nuestros productos” para añadir a continuación: “le instamos a que deje de promocionar la venta de nuestros productos”.

          “Usted deja de ser nuestro representante exclusivo”, lo que prueba un tipo de relación (representación/agente) y un acuerdo tácito o expreso (“exclusividad”)

          “Hemos designado a otro representante en su zona”, que demuestra que el agente/distribuidor tenía una zona asignada y “representaba”.

          “A partir de este momento los pedidos serán asumidos por X” que, igualmente confirma un tipo de relación.

          En resumen: a partir del momento en el que la empresa valora poner fin a una relación comercial, sobre todo cuando no está escrita y antes de enviar cualquier carta, es conveniente pensar bien en la estrategia de cara a una posible reclamación. Es el momento más adecuado para asesorarse y evitar sorpresas. Cualquier comunicación que no esté alineada con esa estrategia diseñada desde el principio solo podrá aportar confusión y problemas.

          Remember the USA – EU agreement on 15% tariffs? I wrote that with a negotiator like Trump the game is never over (article here) and—after the recent interlude featuring a threat of 100% tariffs on pharmaceuticals—the U.S. government has announced the imposition of an overall 107% duty on Italian pasta, which could take effect on January 1, 2026.

          Where this new duty comes from

          The antidumping investigation was launched by the U.S. Department of Commerce at the request of certain competing American companies and is based on a 1996 antidumping order that allows for periodic reviews of imports of Italian pasta. The Department of Commerce conducts these checks annually to assess whether Italian producers are selling pasta at prices lower than the U.S. domestic market, a practice known as “dumping.”

          Companies involved in the investigation

          The Department of Commerce selected two sample companies for in-depth analysis, defined as “mandatory respondents”: La Molisana and Pastificio Lucio Garofalo. According to the official document published by the U.S. administration, for the period from July 1, 2023 to June 30, 2024, both companies allegedly sold their products below market prices, resulting in the imposition of a duty of 91.74%.

          U.S. authorities justified this percentage by claiming the two companies did not provide complete or compliant information as requested by the Department and were therefore insufficiently cooperative during the investigation. What is very important is that, in addition to the two companies directly examined, the additional 91.74% duty is also applied to numerous other Italian producers not individually reviewed. This methodology, while formally permitted under U.S. law as an exception, is being applied without any direct verification of the other companies.

          Next steps in the procedure

          Italy’s Ministry of Foreign Affairs moved immediately, formally intervening in the proceeding as an “interested party” through the Italian Embassy in Washington. The Foreign Ministry is working in close coordination with the companies concerned and, in concert with the European Commission, to persuade the U.S. Department to revise the provisional duties.

          The two companies involved (La Molisana and Garofalo) can submit documentation to contest the dumping allegations. However, if dumping is confirmed, the Department of Commerce will instruct Customs to apply antidumping duties on goods sold and entered into U.S. commerce.

          The preliminary nature of this determination means there is still room to change the decision before it becomes final.

          Possible effective date

          The new super-duty of 91.74%, which will be added to the existing 15% tariff for a total of 107%, is scheduled to take effect on January 1, 2026. This date therefore represents a crucial deadline for all ongoing diplomatic and legal actions.

          If confirmed, the economic impact would be significant: in 2024, Italian pasta exports to the United States reached a value of €671 million according to Coldiretti, accounting for nearly 17% of the sector’s total exports. A 107% duty would risk seriously undermining competitiveness in one of the most important markets for Italian agri-food products.

           What to do between now and January 1, 2026?

          At this stage, the entry into force of the new duty depends on the outcome of the ongoing procedure: given what has happened in recent months, and the political use the U.S. administration has made of tariffs—well beyond their technical function—it is reasonable to be pessimistic.

          So, what to do? In recent months we have seen companies react to the uncertainty over the fate of the tariffs in three ways:

          • Some rushed to ship as many products as possible before the potential effective date of the duty;
          • Some granted—upfront—discounts equivalent to the threatened duty, in case it came into force;
          • Some suspended orders, pending definitive news on the impact of the duties.

          These are all  valid options, but other effective tools for managing the uncertainty caused by the flurry of announcements, negotiations, and threats from the U.S. administration should not be forgotten: the risk of new duties being introduced, or existing ones being increased, can be managed in the contract by agreeing with the U.S. importer how any tariff change will affect the product.

          The parties can stipulate, for example, that the increase will be split equally; or that the importer will bear it beyond a certain threshold; or that if the duty exceeds a certain level, the contracts may be terminated. You can find a deeper dive in this article.

          The only certainty is that trade relations with the U.S. will stay unpredictable for a long time, and it’s vital to carefully manage the risk factors involved in selling products there. Right now, the focus is on tariffs and prices, and I encourage you to take this chance to thoroughly review existing agreements and assess whether—and how—other important points are addressed that could entail significant liabilities: we discuss them, very practically, in this book.

          On 29 June 2025, the Vietnamese government introduced Decree No. 163/2025/ND-CP (Decree 163). This decree provides detailed guidance on how the updated Law on Pharmacy will be implemented.

          Like the amended Law on Pharmacy, Decree 163 came into effect on 1 July 2025, replacing the previous Decree No. 54/2017/ND-CP (Decree 54). The new decree sets out comprehensive rules for key aspects of managing pharmaceuticals, including:

          • Pharmacy practice certificates
          • Certificates allowing pharmaceutical businesses to operate
          • Import and export of medicines and drug ingredients
          • Good Manufacturing Practice (GMP) inspections of overseas manufacturers
          • Recalling medicines and drug ingredients
          • Certificates for medicine advertising content
          • Medicine price management

          Key Changes in Decree 163

          Here are some important changes and additions introduced by Decree 163:

          Destroying Specially Controlled Medicines

          You no longer need to get approval from the relevant authority before destroying narcotic, psychotropic, and precursor drugs, or pharmaceutical ingredients that are narcotic or psychotropic substances or precursors used in medicines. Instead, you just need to provide notification at least seven working days in advance. This notification must include the planned destruction date and a detailed list of items to be destroyed.

          E-commerce in Pharmaceutical

          Pharmaceutical businesses that sell products online must openly display the following information to ensure transparency and consumer safety:

          • Their certificate allowing them to operate as a pharmaceutical business.
          • The pharmacy practice certificate of the person responsible for pharmaceutical expertise.
          • Information about the medicines themselves.

          Shelf-Life Rules for Imported Products

          For medicines and ingredients with a total shelf life of nine months or less, at least one-third of their shelf life must remain when they clear customs. Medicines with a shelf life of 30 days or less must still be within their shelf life at the time of customs clearance.

          Controlling Imported Products

          All medicines with marketing authorisation (MA) are subject to import control, except for:

          • Medicines needed for preventing and treating Group A infectious diseases that have been declared epidemics, as per the Law on Prevention and Control of Infectious Diseases.
          • Medicines with a shelf life of less than 30 days.

          Importers must inform the provincial People’s Committee at least five working days before making a customs declaration. The People’s Committee can then issue a written notice of non-compliance to the customs authority within five working days of receiving this notification.

          Medicine Advertising

          Decree 163 adds a process that allows an approved medicine advertising certificate to be adjusted for certain changes (such as a change to the MA holder or manufacturer information). This means you don’t have to go through the entire initial registration process for medicine advertising content again, as was required under the previous rules.

          Medicine Price Management

          Businesses must announce or re-announce wholesale prices, similar to the medicine price declaration process under Decree 54. Some medicines are exempt from this requirement, including those provided free of charge for emergency responses, national health programmes, humanitarian aid, clinical trials, scientific research, or exhibition purposes, and medicines carried as personal luggage.

          The Ministry of Health (MOH) can make recommendations if the announced or re-announced price is significantly higher than similar medicines already on the market. This includes situations where:

          • The announced or re-announced wholesale price of the medicine is higher than the highest price of similar medicines.
          • The price difference is more than 35% (for medicines priced under VND 1 million) or 15% (for medicines priced at VND 1 million and above) compared to winning bid prices in tenders.
          • The announced or re-announced price is higher than prices in the country of origin or other markets (if there’s no similar product in Vietnam).
          • When such differences are found, the MOH issues a formal recommendation to the announcing business and publishes it online for transparency and accountability.

          Further Guidance in New Circular

          On 1 July 2025, the MOH issued Circular No. 31/2025/TT-BYT (Circular 31), which further details how the amended Law on Pharmacy and Decree 163 should be implemented. Circular 31 officially replaces Circular No. 07/2018/TT-BYT and Decree 54 and came into effect immediately.

          Key provisions of Circular 31 include:

          Notification of Practising Pharmacists

          Pharmaceutical businesses that are not part of a pharmacy chain must inform the relevant authority of a list of people currently working at the business who hold pharmacy practice certificates. This notification must be submitted within 15 days of the date the certificate allowing the pharmaceutical business to operate was issued, or when there are any changes to the list. This is a shorter deadline than the previous 30 days under earlier rules.

          Pharmacy chains have similar notification duties and deadlines. Specifically, the chain operator must inform the provincial authority where each pharmacy in the chain is located about the list of practising pharmacists at those sites. Additionally, pharmacy chains must notify the authority if pharmacies are added or removed from the chain, and if there are any rotations of the people responsible for pharmaceutical expertise between pharmacies within the chain.

          Medicine Information Activities

          Under Circular 31, medicine information can still be given to healthcare professionals through information materials, seminars, and medical representatives.

          However, Circular 31 introduces a significant change by removing the need to obtain a certificate for medicine information content before carrying out these activities. Under the new rules, pharmaceutical businesses, representative offices of foreign pharmaceutical companies in Vietnam, and MA holders are now responsible for creating and distributing medicine information materials. These materials must comply with the package inserts for medicines approved by the MOH, the Vietnamese National Drug Formulary, and any related documents and professional instructions issued or recognised by the MOH.

          Donald Trump, never one to shy away from drama or diplomacy-via-caps-lock, has slapped a 50% tariff on all Brazilian exports to the United States. The justification? In his own delicate prose: «The treatment of former President Jair Bolsonaro is a disgrace… A witch hunt that must end IMMEDIATELY!»

          And just in case anyone thought this was about trade imbalances or economic strategy, Trump made things crystal clear: «Due to Brazil’s insidious attacks on free elections…».

          In short, the 50% tariff isn’t about coffee, orange juice, or flip-flops. It’s about a Supreme Court judgment, applying Brazilian law, regarding Brazilian politicians accused of conspiring in a coup d’état. In other words, this is a brazen (and frankly absurd) attempt at judicial intervention via trade war.

          Trump, with his characteristic subtlety, offered a solution: manufacture in the U.S., and he’ll look kindly upon Brazil, like a mafia don offering «protection» after smashing your shop window. But what he meant was: consider Bolsonaro innocent, and we’ll talk.

          The Brazilian market took the bait

          Although the fishy interference in Brazilian affairs was determined from a fish out of the water, the market took the bait: in the first 48 hours after the infamous letter, at least 1500 tons of fish were already held in Brazilian ports, as US buyers suspended their contracts due to uncertainty about the costs upon arrival. The fish market is on alert, as 80% of the exports head to the US, mainly coming from small family-owned industries that distribute the catch from artisanal fishing communities.

          The same effect hit other sectors, from orange, honey, and coffee to aircraft.

          Brazil’s response and sorcery: don’t mess with us (or our weather)

          Naturally, Brazil will not sit quietly sipping caipirinhas while its sovereignty is trampled. Reciprocity is on the table: if Washington raises tariffs, Brasília can do the same. But above all, one thing is sure: Brazil will never tolerate foreign interference in its independent judiciary.

          And then, a curious coincidence: right after Trump’s speech, a tornado accompanied by lightning struck the White House grounds. Pure chance? Maybe. Or could it have been the work of Brazilian indigenous shamans, a particularly well-organized group of umbanda practitioners, or simply the fact that, as every Brazilian child knows, God is Brazilian.

          Trump might want to check the weather forecast next time before penning another angry letter.

          The unpredictable becoming predictable

          Trade wars are rarely tidy affairs, but one thing they consistently deliver is chaos (in legal terms, disruption). And when disruption meets contracts, force majeure disputes often end up in court.

          At first glance, Trump’s decision to impose a 50% tariff overnight might feel like an unpredictable thunderbolt (quite literally, given the weather at the White House). But here’s the catch: by now, unpredictable tariffs are becoming predictable. When a government with a well-documented love for impulsive economic diplomacy imposes politically motivated tariffs, can anyone claim to be surprised?

          In most jurisdictions, force majeure requires that the event be extraordinary, unforeseeable, and beyond the parties’ control. A sudden 50% tariff certainly ticks a few of those boxes, but following a repetition of erratic trade policy, one might argue that businesses should expect what in past times was considered unexpected, especially when dealing with certain jurisdictions or political figures. In other words, Trump’s tariffs might not excuse performance if parties didn’t prepare for exactly this kind of volatility.

          This is where good contract drafting comes into play

          Savvy businesses are learning that their contracts must go beyond a vague boilerplate clause about “acts of government” or “changes in law.” Instead, they should expressly address the risk of sudden tariff changes, including

          • hardship clauses that allow renegotiation when costs become commercially unreasonable;
          • price adjustment mechanisms linked to tariff thresholds;
          • termination rights triggered by specified levels of customs duties;
          • currency fluctuation provisions (because tariffs rarely travel alone, and currency swings often accompany them).

          In short, while no contract can immunize a business from every shock, smart drafting can mean the difference between a commercial headache and a catastrophic breach.

          Therefore, tariffs may no longer be an unpredictable storm; they are part of the new predictable landscape. Given that your contract might wake up tomorrow facing ‘IMMEDIATE’ punitive tariffs in all caps, your contract should be ready today.

          The unwitting cupid: strengthening EU-Brazil relations

          While the tariffs may ruffle trade flows between Brasília and Washington, there’s an unintended silver lining: Trump is proving to be the most efficient matchmaker between Brazil and other markets, such as China and the European Union.

          The EU-Brazil relationship, already a flirtation with promising prospects, with relevant progress in the EU-Mercosur Agreement, now seems destined for deeper romance. If Mr. Trump insists on isolating the US from Brazil, the old continent stands ready, with flowers and wine in hand, to pick up where the US left off. After all, Brazilian fish can pair up nicely with champagne, cava and prosecco.

          So thank you, Mr. Trump. In your quest to bully Brazil into submission, you may have done more to strengthen transatlantic ties than any EU Commissioner ever could. As they say in Brasília these days: Trump is not a trade warrior. He’s a cupid in disguise.

          The recent announcement of a landmark trade agreement framework, following just three months negotiations since President Trump’s tariffs announcement on 2 April 2025, signals a pivotal shift, not merely in bilateral relations, but in the broader architecture of global supply chains.

          As a commercial lawyer with exposure to Vietnam since 2007, I have observed the evolving dynamics between the United States and Vietnam through the years, talking to students, entrepreneurs, veterans, diplomats, humans from all walks all life, from both nations and beyond.

          You may recall that Vietnam, with the notable exclusion of China, was to be the nation that would encounter the most stringent tariffs imposed by the Trump administration, reaching an astonishing 46%.

          The newly forged framework outlines significant reciprocal concessions designed to foster greater trade and investment flows. Granted, pre-April 2 tariffs applied by the USA on Vietnamese goods were lower than what emerges from the framework agreement, but still, it is better than 46%),

          The United States has committed to imposing a 20% tariff on most Vietnamese imports, a notable reduction from the previously mooted 46%. However, a substantial 40% tariff will apply to goods re-exported from third countries, with a particular focus on those originating from China.

          Vietnam has pledged to open its market to a wide array of US products. Crucially, it has also committed to implementing stringent measures aimed at restricting the transshipment of Chinese goods through its territory, a long-standing concern for Washington.

          In a significant win for American exporters, US goods will now enjoy duty-free access to the Vietnamese market, effectively granting “total access”, particularly for large-engine vehicles such as SUVs, as emphatically stated by President Trump (how SUVs are going to circulate in the narrow alleys of Hanoi and Ho Chi Minh City, infested by swarms of mopeds, is a different story).

          This agreement is expected to catalyse growth in several key sectors. Electronics, textiles, furniture, energy (especially Liquefied Natural Gas), and agriculture are poised for expansion. US firms specialising in manufacturing technology, energy solutions, and agricultural products are anticipated to be the primary beneficiaries. Furthermore, beyond immediate trade benefits, the agreement is set to reshape investment strategies, encouraging a greater localisation of supply chains within Vietnam. This strategic realignment is also expected to further solidify the already robust US-Vietnam Comprehensive Strategic Partnership.

          While the potential upsides are considerable, it is imperative for businesses and investors to approach this new landscape with a clear understanding of the accompanying risks. From my vantage point, I identify several significant execution challenges and structural impediments that require close monitoring.

          Enforcement of Transshipment Controls

          The most immediate and perhaps formidable risk lies in the effective enforcement of transshipment controls. Vietnam has historically served as a significant assembly point for Chinese-manufactured components. Ensuring that goods originating from China are not merely re-routed through Vietnam to circumvent US tariffs will require exceptionally close monitoring and robust verification mechanisms. The legal and practical complexities of definitively determining the true country of origin for all goods will undoubtedly pose a persistent challenge. As a European citizen, witnessing how the EU-Vietnam Free Trade Agreement (“EVFTA”), which poses an important stress on certificates of origin, I am particularly aware of this matter.

          While Vietnam has made remarkable strides in its economic development, certain structural issues could hinder its capacity to scale up high-value manufacturing in the short to medium term. These include:

          Legal framework nuances

          Vietnam’s legal framework for foreign investment has seen continuous improvements, but legal and cultural complexities and inconsistencies can and do still arise. Navigating the regulatory landscape, particularly with new rules stemming from this agreement and at a time of deep administrative, governmental, digital and legal reforms in Vietnam, will demand expert legal guidance to ensure compliance and mitigate potential fines and disputes. Issues surrounding so-called sublicences for businesses, intellectual property rights enforcement and contract enforceability, whilst improving, still require careful consideration;

          Education

          The ambition to transform Vietnam into a high-value manufacturing hub necessitates a workforce equipped with advanced skills. While the Vietnamese government prioritises education and workforce development, a significant portion of the current labour force lacks formal training and specialised certifications, let alone a good command of the English language. Bridging this skills gap, particularly in areas like advanced manufacturing, engineering, and digital technologies is a necessity and not just in light of this framework agreement. Companies may need to factor in substantial investment in training and upskilling programmes for their Vietnamese employees.

          Infrastructures

          Despite considerable investment, Vietnam’s infrastructure, particularly in logistics, energy, and transportation, continues to face bottlenecks. And China – the apparent target of Trump’s tariffs – is stepping in with high-speed trains connecting it to the northern Provinces of Vietnam. An increased volume of high-value manufacturing and trade will place further strain on existing infrastructure. Inadequate port capacity, congested roads, and a reliable energy supply (including for EV charging) are critical concerns that could impact efficiency and increase operational costs for businesses.

          Policy divergence

          This framework agreement deepens US-Vietnam trade ties and seems to be paving the way for more US investments in Vietnam, but this second aspect seems to run counter to parallel US policy objectives aimed at reshoring manufacturing back to the United States. This potential divergence in strategic priorities could introduce yet another element of unpredictability in the long term, necessitating a flexible and adaptable investment approach. Future shifts in US policy could impact the durability and full extent of the benefits derived from this agreement.

          This trade agreement, if finalised and implemented, undoubtedly represents a structural shift in global trade dynamics. It strategically positions Vietnam as an increasingly important high-value manufacturing hub and significantly deepens US engagement in Southeast Asia. We will need time, however, to assess the practical impact of the agreement, observing the efficacy of its implementation, and understanding how Vietnam’s inherent strengths and challenges will ultimately shape its role in the reconfigured global supply chain.

          We will also need to see what China, if anything, will do as a countermeasure. In fact, any assessment of Vietnam’s evolving trade landscape would be incomplete without a thorough consideration of China’s influence and strategic posture. President Xi Jinping has consistently championed a vision of a “community of shared future for mankind,” a concept that, while outwardly promoting global cooperation, also subtly underscores a demand for international alignment with Beijing’s interests. In the context of escalating trade tensions, Xi has repeatedly warned that “trade wars have no winners,” advocating for unity against protectionist measures, yet simultaneously implying that nations must ultimately choose sides, either with or against China’s economic and political orbit. Vietnam, despite its historical complexities and occasional maritime disputes with Beijing in the South China Sea (or East Sea, as it is officially called by Hanoi), remains deeply interwoven with China’s economy. China has been Vietnam’s largest trading partner for many years, with significant inflows of Chinese FDI, loans, and project contractors. This economic dependency is particularly evident in various sectors, where Chinese components and materials form a substantial part of Vietnamese manufacturing supply chains. While Vietnam has actively sought to diversify its trade partners and reduce its reliance on China, the sheer scale of the bilateral economic relationship means that disentanglement is a long-term, complex endeavour. Furthermore, China’s influence extends beyond direct trade into crucial regional resources. The Mekong River, a lifeline for millions in Southeast Asia, originates in China, which has constructed numerous upstream dams.

          As Vietnam navigates its enhanced trade relationship with the United States, it must simultaneously contend with the enduring economic gravity and strategic ambitions of its northern giant neighbour. Any perceived move by Vietnam to significantly shift away from China could invite retaliatory measures or heightened pressure from Beijing. Businesses investing in Vietnam must not only grasp the intricacies of the US-Vietnam agreement but also meticulously analyse how these developments will intersect with, and potentially be impacted by, the intricate, often delicate, and sometimes fraught relationship between Hanoi and Beijing. Understanding this geopolitical tightrope will be essential for sustainable success in the Vietnamese market. Prudence, informed legal counsel, and a keen eye on evolving geopolitical and economic realities will be paramount for those seeking to capitalise on this transformative new chapter.

          Takeaways

          • Tariffs:The US-Vietnam framework agreement marks a significant departure from previous trade dynamics, reducing US tariffs on most Vietnamese imports to 20% (from a mooted 46%) while imposing a 40% tariff on transshipped goods, especially from China.
          • Vietnam’s market opening:Vietnam has committed to duty-free access for a broad range of US products and stricter controls on Chinese goods transiting its territory.
          • Growth / manufacturing shift potential:The agreement is expected to fuel expansion in Vietnamese electronics, textiles, furniture, energy (LNG), and agriculture. It also encourages supply chain localisation within Vietnam (normally more of an assembly point for Chinese products).
          • Execution challenges: Effectively preventing the re-routing of Chinese goods through Vietnam to avoid tariffs will be a complex and demanding task; Despite economic progress, Vietnam faces hurdles in scaling high-value manufacturing due to legal framework nuances (e.g., sublicences, IP enforcement), a skills gap in its workforce (lack of formal training, English proficiency) and infrastructure bottlenecks (logistics, energy, transportation).
          • US policy divergence:The agreement’s encouragement of US investment in Vietnam appears to contradict the broader US policy objective of reshoring manufacturing.
          • China:Businesses must consider China’s significant economic sway over Vietnam, including its position as Vietnam’s largest trading partner, its FDI, and its control over shared resources like the Mekong River. Any major shift by Vietnam away from China could lead to retaliatory measures from Beijing.
          • Uncertainty:This is not a final agreement, so the situation might change. Prudence and informed legal counsel are crucial for businesses navigating this evolving landscape.

          Federico Vasoli

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            The USA vs. Brazil Trade War | How to Lose a Trade Partner in 10 Tweets

            18 de julio de 2025

            • Brasil
            • EEUU
            • Contratos de distribución
            • Comercio internacional
            • Derecho Fiscal y Tributario

            Executive Summary

            The African Continental Free Trade Area (AfCFTA) remains one of the most ambitious integration projects in the world. Yet, several years into its operational phase, it has not (yet) delivered the structural shift many expected. A recent analysis underscores the gap between political momentum and economic reality: implementation remains uneven, the agreement is still used by only a portion of participating states, and non-tariff barriers and infrastructure deficits continue to dominate the cost of doing business across borders.  For Egypt, the opportunity is still real — but it depends less on treaty headlines and more on enabling conditions: trade logistics, customs efficiency, regulatory convergence, and competitive industrial capacity. 

            Looking Back: The Promise of a Single African Market

            When the AfCFTA was launched, expectations were understandably high. A continent-wide trade framework was supposed to reduce tariffs, facilitate trade in goods and services, and strengthen regional value chains — with the broader goal of moving African economies up the value ladder.

            In my 2022 article, I asked whether AfCFTA could become a game changer for Egypt, given Egypt’s industrial base, strategic geography, and the potential to diversify export markets beyond traditional partners. (For background, see the earlier article here”).

            The Reality Check: Intra-African Trade Remains Structurally Weak

            Several years later, the interim assessment is sobering. As the Frankfurter Allgemeine Zeitung (FAZ) recently put it, AfCFTA is not a “game changer” yet, and only about half of member states currently meet the practical prerequisites to trade under the agreement.

            A deeper reason is structural: no other world region trades so little with itself, and while statistics may undercount informal cross-border flows (especially in food), the overall picture remains unchanged.

            Trade integration cannot deliver transformative outcomes if production, logistics, and institutions do not support scale.

            Implementation Has Been Slow — and Often Symbolic

            Operationalisation did not start with full-scale liberalisation. Instead, the AfCFTA began with a pilot approach: the Guided Trade Initiative (GTI) launched in October 2022, initially with eight states, later joined by additional countries, including Nigeria and South Africa by spring 2025.

            The GTI created valuable learning effects, but it also underlined a key point: early progress was often presented through symbolic deals, while product coverage and volumes remained limited. FAZ highlights that only selected goods could be traded duty-free and that key sectors remained constrained for a long time due to missing or unresolved technical rules.

            A pilot, however, cannot substitute for full operational certainty — the kind businesses need to restructure supply chains and invest.

            Tariffs Are Not the Main Barrier — Trade Costs Are

            AfCFTA is frequently discussed in terms of tariff liberalisation. Yet, evidence suggests that the largest gains do not come from tariffs but from reducing non-tariff barriers and improving trade infrastructure.

            FAZ points to a central reality: tariffs tend to add around 20–30% to intra-African trade costs, whereas non-tariff costs can be far higher — driven by bureaucracy, lack of harmonised standards, inefficient border processes, and transport barriers.

            This is the crux: even with reduced tariffs, trade will not expand meaningfully if goods still cannot move cheaply, quickly, and predictably.

            Integration Complexity and Distributional Politics

            Africa’s integration landscape is shaped by multiple overlapping regional economic communities and trade regimes. This creates legal and administrative complexity — often described as an integration “spaghetti bowl.” FAZ notes the challenge of coordination and the continued fragmentation of rules.

            There is also a political economy dimension. Intra-African trade is heavily influenced by a small number of larger economies — and the distribution of benefits matters. FAZ highlights the dominance of major players (notably South Africa) and the concern that tariff liberalisation alone may entrench existing industrial advantages.

            Where governments expect asymmetric outcomes, resistance often takes the form of delay, narrow implementation, or persistent non-tariff barriers.

            What This Means for Egypt: The Opportunity Is Real — But Conditional

            Egypt’s strategic case for AfCFTA participation remains strong: industrial potential, geographic location, and the opportunity to access and shape growing markets. But the experience so far suggests that the treaty text alone does not generate trade flows.

            For Egypt’s private sector, the decisive factors are practical:

            • predictable and efficient customs clearance and border procedures,
            • logistics corridors and port efficiency,
            • regulatory convergence (standards, certification, compliance),
            • stable access to trade finance and payments,
            • competitive energy and production conditions for manufacturing and processing.

            AfCFTA can support these developments — but it cannot replace them.

            The “Game Changer” Pathway: What Must Happen Next

            FAZ concludes that AfCFTA will only become truly impactful if it is paired with the fundamentals: major infrastructure investment, stronger production and processing capacity, and a credible industrial policy.

            At the same time, Africa faces a classic chicken-and-egg problem: without development there is limited investment appeal; without investment there is limited development.

            For Egypt and its partners, a pragmatic strategy would be to:

            1. treat AfCFTA as a platform for real trade-cost reduction, not only tariff debates;
            2. focus on a limited number of scalable corridors and sectors where regional value chains can realistically grow;
            3. strengthen implementation capacity so that preferences become usable for firms — especially SMEs;
            4. enhance legal certainty and dispute resolution reliability for cross-border commerce.

            Conclusion

            AfCFTA remains a landmark achievement in terms of political commitment. But as of today, it has not yet been the “game changer” many hoped for.

            For Egypt, the key question is no longer whether AfCFTA is visionary — it is. The question is whether governments and businesses can translate it into lower real trade costs, higher competitiveness, and bankable cross-border transactions. If those enabling conditions improve, AfCFTA’s promise can still become commercial reality.

            After “Liberation Day,” many foreign companies offered discounts to American importers to help them offset the tariffs. A few months later, the US Supreme Court declared the «reciprocal» tariffs unlawful, but on the same day, President Trump announced new tariffs. In this article, we provide a practical overview of how to handle various scenarios, shifting from a reactive, unstructured approach to deliberate management of price volatility and trade flows caused by the introduction, adjustment, and removal of tariffs.

            Tariff Sharing agreements

            For a long time, the question has been straightforward: who absorbs the extra customs cost? The exporter? The importer? Both? The question remains important, but today it is incomplete.

            The new scenario, in light of the recent ruling by the US Court of Justice on March 20, 2026, is: what happens if that duty is then canceled and refunded? If the cost was shared between the parties, the benefit of the refund must follow a consistent logic. In the absence of a clear agreement on this point, however, there is a risk of economic misalignment that could compromise the commercial relationship.

            Let’s imagine an Italian winery that sells its products to a US importer. Following the introduction of reciprocal duties, the parties have decided that the exporter will grant an extraordinary discount of 7.5%, explicitly motivated by the need to share the impact of the duty. The commercial relationship continues, volumes remain stable, and the importer avoids passing on the entire increase to the end customer.

            As a result of the Supreme Court ruling (or, in the future, another ruling or administrative decision), the importer obtains a refund of the duties paid during that period.

            If no formal agreements have been made on this point and the documentation refers generically to a «commercial discount» and says nothing about reimbursement, the situation afterward may be difficult to reconstruct and, above all, could lead to commercial tension. As a result, a positive development (the cancellation of the duty and the right to reimbursement) becomes a problematic factor that jeopardizes the relationship.

            Is the exporter entitled to a refund of the discounts granted to mitigate the duties?

            In the absence of a different agreement between the parties, the right to reimbursement belongs to the party who paid the duty, i.e., in most cases, the importer. Therefore, there is a risk that the importer will enjoy a double benefit (the discount and the duty refund), while the exporter will get nothing.

            For this reason, it is essential that the parties do not limit themselves to negotiating prices and discounts, but also establish the consequences of the adoption, modification, or revocation of duties on the contract, including any refunds.

            To achieve this, the first step is to accurately classify and document the discounts granted. If only a «commercial discount» appears in emails, commercial orders, credit notes, and invoices, it will be harder to later argue that this discount was actually an extraordinary, temporary contribution related to the duty. Conversely, if the documentation and contract specify that it is a tariff sharing or tariff mitigation measure, identifying the amounts to be refunded after the fact becomes much simpler.

            The goal is to create a clear view of the trend in discounts and payments so that, if needed, financial flows can be adjusted to align with the original terms of the agreement: if the exporter has helped cover a cost that then, in whole or in part, does not end up materializing, they will be eligible for a refund of the contribution paid.

            The contract will therefore include, in addition to the Tariff Sharing clause, a Tariff Reimbursement Allocation clause, which states that if the importer receives a refund, credit, or any other economic benefit related to the duty for which the exporter has granted a discount, the importer must return the corresponding portion of the benefit to the exporter in full. or proportionally, depending on how the parties intend to distribute risk and incentive.

            Importer’s responsibility to seek reimbursement

            It is unclear whether, in the case of US reciprocal duties, importers can simply file an administrative claim to get a refund or if legal action will be required. The latter seems more probable.

            Generally, obtaining a duty refund involves action, deadlines, documentation, and coordination with brokers and customs consultants. In most cases, the entity controlling the process is the importer (or someone acting on their behalf).

            This raises a sensitive but very real issue: if the importer knows that they will have to invest time and money to obtain a refund, only to then have to share the benefit with the exporter, their incentive to take action may be reduced. To prevent this inertia  the contract should contain an express obligation to take action, set out as a duty of best efforts or commercially reasonable efforts.

            For example, the contract should specify that the importer must inquire about the conditions and time limits of the process, keep relevant documentation, regularly inform the exporter about the progress of the initiatives, and not unilaterally waive or reduce the claim if it affects the exporter’s economic rights.

            Preventive Agreements on Litigation and Cost Allocation

            When reimbursement involves a lawsuit or structured legal action, the obstacles are organizational and financial: who decides if and when to proceed, who selects the lawyers, who pays the costs upfront, how the net recovery is divided, and who has the final say on a settlement. This generally applies to all contracts, not just this case: dispute resolution methods must be addressed and agreed upon before the problem arises.

            Otherwise, the dispute resolution process risks becoming a secondary improvised negotiation at the worst time — when the parties are already under pressure from margins, cash flow, and regulatory uncertainty. As a result, it becomes much harder to reach an agreement.

            How to handle new tariffs and their potential cancellation

            To safeguard against uncertainty, the agreement should be organized into two stages.

            • The first stage regulates the immediate impact of the change in scenario, for example, the introduction of a new tariff or its increase (renegotiation, cost sharing, automatic adjustment : I discussed this in this article).
            • The second stage manages the possible «rollback» (right to reimbursement, process, allocation criteria).

            This approach has a clear benefit: it does not force the parties to discuss every time the tariff regime changes or a decision to cancel tariffs is made. Instead of reacting to market changes, a tool is adopted to manage potential scenarios, which is much more resilient commercially and easier to oversee, as the rules have already been agreed upon.

            This allows the impact of duties to be regulated not as an extraordinary variable, to be agreed upon on a one-time basis, but as a structural, adaptable phenomenon that could last a long time.

            This is why it is crucial to know how to draft contracts that cover both the current situation and potential changes, including any refunds.

            Conclusion: Three practical steps for companies exporting to the US

            The first is to agree on the consequences for the contract of the introduction of a new duty, increasing it, or revoking it (renegotiation, cost sharing, automatic price adjustment, right to share the refund).

            The second is to clearly document any discount granted to offset a duty. If it remains a generic «commercial discount,» the right to a refund if reimbursement occurs will be much harder to enforce.

            The third step is to determine what happens if the duty is canceled or revoked: the importer’s responsibility to take action to get a refund, manage the administrative process or litigation, how to divide costs, who oversees the activities of consultants and lawyers, and how the recovered funds will be allocated.

            How do you approach negotiating a trade agreement with China?

            Based on my experience, let’s examine the issues to be addressed and the main questions to ask, taking the negotiation of a trade distribution agreement as a practical example.

            Let’s start with the first issue that is important to clarify.

            Nice Business Card – But Who Is This Guy?

            Business cards, websites, printed or digital brochures, presentations, and any other materials shared in English have no official value in China.

            The company name of the counterparty and the first and last names of people representing it or acting on its behalf, written in English, are only fictitious names.

            To be certain of the company’s data and the identity of the persons, it is necessary to ask for the information in Chinese, with particular reference to the company’s business license (equivalent to the Companies House or Chamber of Commerce’s excerpt), from which the name, corporate purpose, registered and paid-up share capital, and the name of the legal representative can be inferred.

            The data can then be verified by accessing the portal of the State Administration of Industry and Commerce (SAIC) of the province where the Chinese party is based.

            This first verification is essential to ensure that you do not waste time or even run into scams (here’s an in-depth article on Legalmondo’s blog).

            If You Don’t Own Your Trademark, Someone Else Will – and Charge You for It

            Trademark First, Trade Later. China operates on a first-to-file system for trademarks, which means that the first person or company to register a trademark – not necessarily the original creator or most famous user – gains the legal rights to it. This creates a serious risk: if you haven’t registered your trademark in China, someone else might do it before you, and then either use it freely or demand a hefty ransom to give it back. Even high-profile figures like Elon Musk and Michael Jordan have been entangled in costly and protracted disputes with Chinese trademark squatters. In many cases, getting the mark back is highly complicated, and sometimes legally impossible.

            To avoid this, register your trademarks early, even before entering the Chinese market. File directly with the China Trademark Office (CTMO) and don’t stop at the English version — consider registering a Chinese character version as well, since that is how your brand will often be known locally.

            Once that base is covered, clearly state in your contract that your Chinese partner is not allowed to file a registration of any of your trademarks in China, in Latin or Chinese characters, and that he will use trademarks and IP rights in strict conformance to the contract and your instructions.

            For a deeper dive into how to effectively protect your IP rights in China, check out our detailed article on the Legalmondo blog.

            Contracts can wait. First, get on the same page

            When negotiating with a Chinese partner, it’s often a mistake to begin the conversation by exchanging contract drafts. Instead, focus first on the substance — the relationship’s commercial and technical terms. Using a clear checklist of key discussion points (such as products, pricing, delivery terms, technical standards, after-sales support, exclusivity, duration, payment terms, etc.) helps ensure that both sides are aligned on what really matters. Take detailed notes and keep minutes of the discussions, especially where and when consensus is reached, and make sure those minutes are circulated and expressly agreed upon. Once substantial agreement has been achieved on the main terms, this memo can then be handed over to your lawyer, who will translate the business understanding into clear and coherent contractual language. This approach saves tons of time, as it helps avoid unnecessary back-and-forth on legal language before the core deal is in place.

            Think Your NDA Covers You in China? Think Again

            Yes, they are—and often underestimated. A well-drafted Non-Disclosure Agreement (NDA) is essential when the parties plan to exchange confidential information, such as technological know-how, commercial strategies, supplier data, or client lists. Especially in the early phases of negotiation or cooperation, before a main contract is signed, an NDA helps protect intellectual and business assets.

            However, as with all contracts in China, a generic NDA template copied from other jurisdictions will likely be of limited use. To be truly effective, the NDA must be adapted to the specifics of the Chinese legal environment. This includes ensuring that it is enforceable in China: the NDA should include the proper dispute resolution mechanism (see below on why you should consider applying Chinese law and litigating in China), and it must specify clear, valid, and proportionate penalties for breach. In Chinese practice, stating specific contractual penalties (liquidated damages) is often more effective than vague references to compensation, as courts and arbitrators in China tend to enforce these more reliably if they are reasonable.

            While a good NDA is useful, it often falls short in China’s manufacturing and sourcing landscape. This is where the NNN Agreement – standing for Non-Disclosure, Non-Use, and Non-Circumvention – becomes critical. Unlike standard NDAs that primarily focus on confidentiality, an NNN Agreement is designed to address the unique risks of doing business in China. It prevents the recipient from not only disclosing confidential information but also from using it for their benefit or bypassing the disclosing party to work directly with suppliers, clients, or partners. Which, in China, is a very real risk.

            This broader scope is vital when dealing with Chinese manufacturers or intermediaries, who may otherwise be tempted to replicate products or contact customers directly or through third parties. As seen with the NDA, also the NNN Agreement must be drafted in Chinese, governed by Chinese law, and enforceable in Chinese courts -otherwise, it may offer little real protection.

            Joint venture? Easy, Cowboy

            A joint venture is often the first proposal that comes up when negotiating with a potential Chinese partner. It seems appealing: sharing risks and investments, accessing the local market with an ally, leveraging their knowledge and network of contacts. But the reality is often very different from what it appears to be.

            A joint venture is a complex, expensive, and rigid corporate structure that requires significant investments of money, time, and human resources, as well as the ability to continuously manage often divergent interests among the partners. The vast majority of Sino-Foreign JVs have gone wrong, or will go wrong. Or very wrong. First and foremost, because the JV is usually managed by the Chinese partner, and exercising effective control over the company’s operations is a very challenging undertaking.

            Before going down this road, it is essential to ask yourself a few questions: Is the joint venture really indispensable for developing this business in China? (Spoiler: generally, no). Are there less restrictive and risky alternatives, such as a distribution agreement or a licensing agreement? (Yes, almost always). And above all: how well do we really know our potential partner?

            A joint venture should only be considered if it is strictly necessary for the project’s development, after carefully verifying the commercial viability and the reliability of the Chinese partner, and ensuring the ability to maintain effective control over the JV’s operations.

            It is better to start with simpler and more flexible forms of collaboration to test the market and the relationship with the other party before committing to such a demanding investment. Otherwise, the mirage of the joint venture risks turning into a nightmare that can be very costly.

            Memorandum of Understanding: Where Good Intentions Become Bad Contracts

            A Memorandum of Understanding (MoU) is a helpful tool at the early stage of a commercial relationship. It serves as a roadmap for future negotiations, where the parties outline the main principles and intentions that will guide the drafting of the final agreements. When used correctly, an MoU can significantly facilitate negotiations by ensuring that both sides commit to negotiating the agreement in good faith and share a common understanding of key points such as pricing models, territorial scope, exclusivity, milestones, budget, or performance expectations.

            However, an MoU must be used for what it is: a preparatory document, not a binding contract. Care must be taken to avoid ambiguity and unintended commitments. The text should clearly specify that the parties remain free to conclude – or not – the final agreements and which clauses are non-binding – such as the commercial framework or indicative timelines – and which provisions are binding, typically confidentiality, exclusivity during the negotiations (if agreed), governing law, and dispute resolution. A poorly drafted MoU, which includes overly precise and complete terms, can be misinterpreted as a final agreement, creating unnecessary legal risk. So yes, MoUs are valuable – but only when used correctly. If you’d like to know more, go deeper by reading this article.

            Bad Drafts, Big Headaches, Poor results

            Draft agreements used in China are often copied and pasted from incomplete, superficial, poorly organised templates written in bad English, which often do not match the Chinese version of the contract.

            Correcting and integrating these drafts is complicated and more time-consuming than starting from a good template, with suboptimal results.

            It would be better to propose a consistently constructed text and ask the other party to propose any changes and additions to this draft.

            Your Western Contract Template Won’t Work Here

            Even if an English-language contract is perfectly valid, there are many reasons why using contract templates built for other countries in the Chinese market is inadvisable.

            The first is the fact that Anglo-Saxon-based agreements, such as those for the U.S., refer to a common law system (which is based on judicial decisions and case law precedents) that is very different from that of civil law countries (such as China and Italy), which derives from the Roman legal tradition, based on a codified set of written laws.

            It follows that the layout of an agreement on the Anglo-Saxon model is different, much more detailed, and wordy than that of a typical agreement based on a civil law system. Since contract negotiations in China are generally lengthy and complex, working on redundant and complicated text at the outset does not help.

            If we stick to the example of a distribution contract, it should be added that it is advisable to apply Chinese law to provide for arbitration based in China (e.g., at CIETAC) or in Hong Kong or Singapore (third countries, where, however, the costs of the procedure increase significantly) as the mode of dispute resolution. So, the contract should be built on a model that conforms to the law that will apply to the relationship.

            Home Court Advantage Won’t Help You in China. In fact, quite the opposite

            This is a typical point of disagreement in the negotiation of an international contract: the parties aim to have the law of their own country apply, and to stipulate that any disputes be adjudicated by their domestic courts.

            In our case, insisting on the application of Italian (or any other foreign) law and state court is not a good idea: it should be considered, in fact, that a distribution agreement is carried out, for the vast majority, in the country where the distributor operates and where the products are sold (in our case, in mainland China).

            In disputes, the parties’ (particularly the manufacturer’s) interest is to obtain a quick decision by the adjudicating body, especially if situations requiring immediate protection (such as unfair conduct or counterfeiting of trademarks and patents by the distributor) are ongoing.

            None of this is possible if one goes to an Italian judge (with lengthy litigation time and the need then for a complex and costly process to recognise and enforce the decision in China); on the contrary,  an arbitration in China, applying Chinese law, allows one to reach a decision quickly (on average 6-9 months) and, if necessary, also to obtain urgent measures to stop any unfair conduct.

            Chinese Law Isn’t a Black Box (If You Know What You’re Doing)

            The lawyer assisting you should know it.

            Therefore, it is not a leap in the dark, and one should not fear surprises.

            In addition, it should be remembered that an agreement is primarily based on the covenants that the parties have written in the contract; therefore, if the contract has been well drafted, the rules to be applied are clear.

            Finally, if we consider distribution agreements, keep in mind that they are a framework contract, within which a series of separate product sales contracts are concluded. If both countries are contracting parties to the 1980 Vienna Convention on the International Sale of Goods (CISG), then the uniform, clear, and balanced rules of the convention apply automatically, just don’t opt out!

            One Contract, Two Languages

            The contract is also valid in English only.  However, it is undoubtedly advisable to draft a Chinese version with facing text.

            This is for several reasons: first, it prevents the Chinese party from having to arrange for a translation of the text during negotiations for its own internal use (top managers often do not speak English), thus slowing down the various steps of negotiations.

            Also, to ensure that the Chinese side fully understands the agreement’s content and to avert misunderstandings (real or instrumental) about the interpretation of certain covenants.

            Finally, it should be borne in mind that if the contract were later to be used before a court or administrative authority in China, the only language admitted would be Chinese; for this reason, it is better to have already a text agreed and signed by the parties in Chinese as well, rather than having to prepare a unilateral translation later.

            Sign. And chop

            Does the contract need to bear the company’s official stamp? Yes, and this point is absolutely crucial. In China, a company’s official «chop» (the red-ink stamp) is equivalent to a signature and is conclusive proof that the person signing the contract has the authority to represent the company. A signature alone, even from someone with an important-sounding title, may not be sufficient if it is not accompanied by the official chop. Without it, the contract might later be challenged or even considered void. Before signing, always verify that the stamp used matches the one registered with the company’s business license or official corporate records, and ensure that the stamp is applied on every page or at least on the signature page, in line with local practice.

            Don’t Let Your Contract Collect Dust

            Things change fast, especially in China. New products are added, market conditions evolve, people leave the company, new competitors emerge on the horizon, and so on. Companies constantly adapt to the new conditions, and so must the contract.

            Any change in the relationship should be formalized correctly. To avoid misunderstandings and disputes, it’s advisable to include an integration clause in the contract, specifying that any amendments or additions will only be valid if agreed in writing, signed by the parties’ authorized representatives, and annexed as an addendum to the original agreement.

            It’s not enough to include this clause – you must follow it consistently. If things change, agreements reached verbally, through Wechat messages, and through email exchanges may make things complicated if they are not formalised adequately according to the procedure set out in the original contract.

            If you’d like to go deeper, check out this article.

            Son bastante frecuentes las relaciones comerciales con agentes o distribuidores que duran años y sin ningún documento firmado. Y, cuidado, porque ya sabemos que un contrato puede existir incluso verbalmente.

            La inexistencia de un contrato escrito va a añadir dificultades en una posible reclamación, por eso, lo que se haga entre la decisión de ponerle fin y el momento de la reclamación es muy importante. Recuerda: “cualquier cosa que escribas será usada en tu contra”.

            La decisión de terminar una relación comercial es un momento muy delicado al que, no sé por qué, a los abogados no se nos invita. Os doy algunos ejemplos (todos reales) en los que las empresas o algún empleado con la mejor voluntad escribió al agente/distribuidor. Todos fueron luego muy perjudiciales para la empresa:

             

            Decir “Ponemos fin a nuestra relación comercial” cuando la estrategia será defender que dicha relación comercial no existe, sino que son contratos independientes y encadenados (por ejemplo, suministro en lugar de contrato continuado de distribución; consecuencias de indemnización muy relevantes).

            “Usted ya no representa a nuestra sociedad”, lo que puede ser una prueba de que antes sí lo hacía.

            “A partir del día X usted ya no puede actuar en nombre de nuestra sociedad” que probaría que antes sí podía actuar en su nombre.

            “Usted no puede asistir a la feria de X en nuestro nombre”. Una forma de confirmar que entre las competencias del agente/distribuidor estaba participar en ferias y probablemente acredita los clientes obtenidos.

            “Las ventas promovidas por Ud. se han visto reducidas significativamente en el año N”. Cuando no hay contrato escrito ni otra forma de documentarlo, imputar un incumplimiento de una obligación que no está clara, puede ser contraproducente.

            Decir “No estás llevando a cabo una promoción activa de nuestros productos” para añadir a continuación: “le instamos a que deje de promocionar la venta de nuestros productos”.

            “Usted deja de ser nuestro representante exclusivo”, lo que prueba un tipo de relación (representación/agente) y un acuerdo tácito o expreso (“exclusividad”)

            “Hemos designado a otro representante en su zona”, que demuestra que el agente/distribuidor tenía una zona asignada y “representaba”.

            “A partir de este momento los pedidos serán asumidos por X” que, igualmente confirma un tipo de relación.

            En resumen: a partir del momento en el que la empresa valora poner fin a una relación comercial, sobre todo cuando no está escrita y antes de enviar cualquier carta, es conveniente pensar bien en la estrategia de cara a una posible reclamación. Es el momento más adecuado para asesorarse y evitar sorpresas. Cualquier comunicación que no esté alineada con esa estrategia diseñada desde el principio solo podrá aportar confusión y problemas.

            Remember the USA – EU agreement on 15% tariffs? I wrote that with a negotiator like Trump the game is never over (article here) and—after the recent interlude featuring a threat of 100% tariffs on pharmaceuticals—the U.S. government has announced the imposition of an overall 107% duty on Italian pasta, which could take effect on January 1, 2026.

            Where this new duty comes from

            The antidumping investigation was launched by the U.S. Department of Commerce at the request of certain competing American companies and is based on a 1996 antidumping order that allows for periodic reviews of imports of Italian pasta. The Department of Commerce conducts these checks annually to assess whether Italian producers are selling pasta at prices lower than the U.S. domestic market, a practice known as “dumping.”

            Companies involved in the investigation

            The Department of Commerce selected two sample companies for in-depth analysis, defined as “mandatory respondents”: La Molisana and Pastificio Lucio Garofalo. According to the official document published by the U.S. administration, for the period from July 1, 2023 to June 30, 2024, both companies allegedly sold their products below market prices, resulting in the imposition of a duty of 91.74%.

            U.S. authorities justified this percentage by claiming the two companies did not provide complete or compliant information as requested by the Department and were therefore insufficiently cooperative during the investigation. What is very important is that, in addition to the two companies directly examined, the additional 91.74% duty is also applied to numerous other Italian producers not individually reviewed. This methodology, while formally permitted under U.S. law as an exception, is being applied without any direct verification of the other companies.

            Next steps in the procedure

            Italy’s Ministry of Foreign Affairs moved immediately, formally intervening in the proceeding as an “interested party” through the Italian Embassy in Washington. The Foreign Ministry is working in close coordination with the companies concerned and, in concert with the European Commission, to persuade the U.S. Department to revise the provisional duties.

            The two companies involved (La Molisana and Garofalo) can submit documentation to contest the dumping allegations. However, if dumping is confirmed, the Department of Commerce will instruct Customs to apply antidumping duties on goods sold and entered into U.S. commerce.

            The preliminary nature of this determination means there is still room to change the decision before it becomes final.

            Possible effective date

            The new super-duty of 91.74%, which will be added to the existing 15% tariff for a total of 107%, is scheduled to take effect on January 1, 2026. This date therefore represents a crucial deadline for all ongoing diplomatic and legal actions.

            If confirmed, the economic impact would be significant: in 2024, Italian pasta exports to the United States reached a value of €671 million according to Coldiretti, accounting for nearly 17% of the sector’s total exports. A 107% duty would risk seriously undermining competitiveness in one of the most important markets for Italian agri-food products.

             What to do between now and January 1, 2026?

            At this stage, the entry into force of the new duty depends on the outcome of the ongoing procedure: given what has happened in recent months, and the political use the U.S. administration has made of tariffs—well beyond their technical function—it is reasonable to be pessimistic.

            So, what to do? In recent months we have seen companies react to the uncertainty over the fate of the tariffs in three ways:

            • Some rushed to ship as many products as possible before the potential effective date of the duty;
            • Some granted—upfront—discounts equivalent to the threatened duty, in case it came into force;
            • Some suspended orders, pending definitive news on the impact of the duties.

            These are all  valid options, but other effective tools for managing the uncertainty caused by the flurry of announcements, negotiations, and threats from the U.S. administration should not be forgotten: the risk of new duties being introduced, or existing ones being increased, can be managed in the contract by agreeing with the U.S. importer how any tariff change will affect the product.

            The parties can stipulate, for example, that the increase will be split equally; or that the importer will bear it beyond a certain threshold; or that if the duty exceeds a certain level, the contracts may be terminated. You can find a deeper dive in this article.

            The only certainty is that trade relations with the U.S. will stay unpredictable for a long time, and it’s vital to carefully manage the risk factors involved in selling products there. Right now, the focus is on tariffs and prices, and I encourage you to take this chance to thoroughly review existing agreements and assess whether—and how—other important points are addressed that could entail significant liabilities: we discuss them, very practically, in this book.

            On 29 June 2025, the Vietnamese government introduced Decree No. 163/2025/ND-CP (Decree 163). This decree provides detailed guidance on how the updated Law on Pharmacy will be implemented.

            Like the amended Law on Pharmacy, Decree 163 came into effect on 1 July 2025, replacing the previous Decree No. 54/2017/ND-CP (Decree 54). The new decree sets out comprehensive rules for key aspects of managing pharmaceuticals, including:

            • Pharmacy practice certificates
            • Certificates allowing pharmaceutical businesses to operate
            • Import and export of medicines and drug ingredients
            • Good Manufacturing Practice (GMP) inspections of overseas manufacturers
            • Recalling medicines and drug ingredients
            • Certificates for medicine advertising content
            • Medicine price management

            Key Changes in Decree 163

            Here are some important changes and additions introduced by Decree 163:

            Destroying Specially Controlled Medicines

            You no longer need to get approval from the relevant authority before destroying narcotic, psychotropic, and precursor drugs, or pharmaceutical ingredients that are narcotic or psychotropic substances or precursors used in medicines. Instead, you just need to provide notification at least seven working days in advance. This notification must include the planned destruction date and a detailed list of items to be destroyed.

            E-commerce in Pharmaceutical

            Pharmaceutical businesses that sell products online must openly display the following information to ensure transparency and consumer safety:

            • Their certificate allowing them to operate as a pharmaceutical business.
            • The pharmacy practice certificate of the person responsible for pharmaceutical expertise.
            • Information about the medicines themselves.

            Shelf-Life Rules for Imported Products

            For medicines and ingredients with a total shelf life of nine months or less, at least one-third of their shelf life must remain when they clear customs. Medicines with a shelf life of 30 days or less must still be within their shelf life at the time of customs clearance.

            Controlling Imported Products

            All medicines with marketing authorisation (MA) are subject to import control, except for:

            • Medicines needed for preventing and treating Group A infectious diseases that have been declared epidemics, as per the Law on Prevention and Control of Infectious Diseases.
            • Medicines with a shelf life of less than 30 days.

            Importers must inform the provincial People’s Committee at least five working days before making a customs declaration. The People’s Committee can then issue a written notice of non-compliance to the customs authority within five working days of receiving this notification.

            Medicine Advertising

            Decree 163 adds a process that allows an approved medicine advertising certificate to be adjusted for certain changes (such as a change to the MA holder or manufacturer information). This means you don’t have to go through the entire initial registration process for medicine advertising content again, as was required under the previous rules.

            Medicine Price Management

            Businesses must announce or re-announce wholesale prices, similar to the medicine price declaration process under Decree 54. Some medicines are exempt from this requirement, including those provided free of charge for emergency responses, national health programmes, humanitarian aid, clinical trials, scientific research, or exhibition purposes, and medicines carried as personal luggage.

            The Ministry of Health (MOH) can make recommendations if the announced or re-announced price is significantly higher than similar medicines already on the market. This includes situations where:

            • The announced or re-announced wholesale price of the medicine is higher than the highest price of similar medicines.
            • The price difference is more than 35% (for medicines priced under VND 1 million) or 15% (for medicines priced at VND 1 million and above) compared to winning bid prices in tenders.
            • The announced or re-announced price is higher than prices in the country of origin or other markets (if there’s no similar product in Vietnam).
            • When such differences are found, the MOH issues a formal recommendation to the announcing business and publishes it online for transparency and accountability.

            Further Guidance in New Circular

            On 1 July 2025, the MOH issued Circular No. 31/2025/TT-BYT (Circular 31), which further details how the amended Law on Pharmacy and Decree 163 should be implemented. Circular 31 officially replaces Circular No. 07/2018/TT-BYT and Decree 54 and came into effect immediately.

            Key provisions of Circular 31 include:

            Notification of Practising Pharmacists

            Pharmaceutical businesses that are not part of a pharmacy chain must inform the relevant authority of a list of people currently working at the business who hold pharmacy practice certificates. This notification must be submitted within 15 days of the date the certificate allowing the pharmaceutical business to operate was issued, or when there are any changes to the list. This is a shorter deadline than the previous 30 days under earlier rules.

            Pharmacy chains have similar notification duties and deadlines. Specifically, the chain operator must inform the provincial authority where each pharmacy in the chain is located about the list of practising pharmacists at those sites. Additionally, pharmacy chains must notify the authority if pharmacies are added or removed from the chain, and if there are any rotations of the people responsible for pharmaceutical expertise between pharmacies within the chain.

            Medicine Information Activities

            Under Circular 31, medicine information can still be given to healthcare professionals through information materials, seminars, and medical representatives.

            However, Circular 31 introduces a significant change by removing the need to obtain a certificate for medicine information content before carrying out these activities. Under the new rules, pharmaceutical businesses, representative offices of foreign pharmaceutical companies in Vietnam, and MA holders are now responsible for creating and distributing medicine information materials. These materials must comply with the package inserts for medicines approved by the MOH, the Vietnamese National Drug Formulary, and any related documents and professional instructions issued or recognised by the MOH.

            Donald Trump, never one to shy away from drama or diplomacy-via-caps-lock, has slapped a 50% tariff on all Brazilian exports to the United States. The justification? In his own delicate prose: «The treatment of former President Jair Bolsonaro is a disgrace… A witch hunt that must end IMMEDIATELY!»

            And just in case anyone thought this was about trade imbalances or economic strategy, Trump made things crystal clear: «Due to Brazil’s insidious attacks on free elections…».

            In short, the 50% tariff isn’t about coffee, orange juice, or flip-flops. It’s about a Supreme Court judgment, applying Brazilian law, regarding Brazilian politicians accused of conspiring in a coup d’état. In other words, this is a brazen (and frankly absurd) attempt at judicial intervention via trade war.

            Trump, with his characteristic subtlety, offered a solution: manufacture in the U.S., and he’ll look kindly upon Brazil, like a mafia don offering «protection» after smashing your shop window. But what he meant was: consider Bolsonaro innocent, and we’ll talk.

            The Brazilian market took the bait

            Although the fishy interference in Brazilian affairs was determined from a fish out of the water, the market took the bait: in the first 48 hours after the infamous letter, at least 1500 tons of fish were already held in Brazilian ports, as US buyers suspended their contracts due to uncertainty about the costs upon arrival. The fish market is on alert, as 80% of the exports head to the US, mainly coming from small family-owned industries that distribute the catch from artisanal fishing communities.

            The same effect hit other sectors, from orange, honey, and coffee to aircraft.

            Brazil’s response and sorcery: don’t mess with us (or our weather)

            Naturally, Brazil will not sit quietly sipping caipirinhas while its sovereignty is trampled. Reciprocity is on the table: if Washington raises tariffs, Brasília can do the same. But above all, one thing is sure: Brazil will never tolerate foreign interference in its independent judiciary.

            And then, a curious coincidence: right after Trump’s speech, a tornado accompanied by lightning struck the White House grounds. Pure chance? Maybe. Or could it have been the work of Brazilian indigenous shamans, a particularly well-organized group of umbanda practitioners, or simply the fact that, as every Brazilian child knows, God is Brazilian.

            Trump might want to check the weather forecast next time before penning another angry letter.

            The unpredictable becoming predictable

            Trade wars are rarely tidy affairs, but one thing they consistently deliver is chaos (in legal terms, disruption). And when disruption meets contracts, force majeure disputes often end up in court.

            At first glance, Trump’s decision to impose a 50% tariff overnight might feel like an unpredictable thunderbolt (quite literally, given the weather at the White House). But here’s the catch: by now, unpredictable tariffs are becoming predictable. When a government with a well-documented love for impulsive economic diplomacy imposes politically motivated tariffs, can anyone claim to be surprised?

            In most jurisdictions, force majeure requires that the event be extraordinary, unforeseeable, and beyond the parties’ control. A sudden 50% tariff certainly ticks a few of those boxes, but following a repetition of erratic trade policy, one might argue that businesses should expect what in past times was considered unexpected, especially when dealing with certain jurisdictions or political figures. In other words, Trump’s tariffs might not excuse performance if parties didn’t prepare for exactly this kind of volatility.

            This is where good contract drafting comes into play

            Savvy businesses are learning that their contracts must go beyond a vague boilerplate clause about “acts of government” or “changes in law.” Instead, they should expressly address the risk of sudden tariff changes, including

            • hardship clauses that allow renegotiation when costs become commercially unreasonable;
            • price adjustment mechanisms linked to tariff thresholds;
            • termination rights triggered by specified levels of customs duties;
            • currency fluctuation provisions (because tariffs rarely travel alone, and currency swings often accompany them).

            In short, while no contract can immunize a business from every shock, smart drafting can mean the difference between a commercial headache and a catastrophic breach.

            Therefore, tariffs may no longer be an unpredictable storm; they are part of the new predictable landscape. Given that your contract might wake up tomorrow facing ‘IMMEDIATE’ punitive tariffs in all caps, your contract should be ready today.

            The unwitting cupid: strengthening EU-Brazil relations

            While the tariffs may ruffle trade flows between Brasília and Washington, there’s an unintended silver lining: Trump is proving to be the most efficient matchmaker between Brazil and other markets, such as China and the European Union.

            The EU-Brazil relationship, already a flirtation with promising prospects, with relevant progress in the EU-Mercosur Agreement, now seems destined for deeper romance. If Mr. Trump insists on isolating the US from Brazil, the old continent stands ready, with flowers and wine in hand, to pick up where the US left off. After all, Brazilian fish can pair up nicely with champagne, cava and prosecco.

            So thank you, Mr. Trump. In your quest to bully Brazil into submission, you may have done more to strengthen transatlantic ties than any EU Commissioner ever could. As they say in Brasília these days: Trump is not a trade warrior. He’s a cupid in disguise.

            The recent announcement of a landmark trade agreement framework, following just three months negotiations since President Trump’s tariffs announcement on 2 April 2025, signals a pivotal shift, not merely in bilateral relations, but in the broader architecture of global supply chains.

            As a commercial lawyer with exposure to Vietnam since 2007, I have observed the evolving dynamics between the United States and Vietnam through the years, talking to students, entrepreneurs, veterans, diplomats, humans from all walks all life, from both nations and beyond.

            You may recall that Vietnam, with the notable exclusion of China, was to be the nation that would encounter the most stringent tariffs imposed by the Trump administration, reaching an astonishing 46%.

            The newly forged framework outlines significant reciprocal concessions designed to foster greater trade and investment flows. Granted, pre-April 2 tariffs applied by the USA on Vietnamese goods were lower than what emerges from the framework agreement, but still, it is better than 46%),

            The United States has committed to imposing a 20% tariff on most Vietnamese imports, a notable reduction from the previously mooted 46%. However, a substantial 40% tariff will apply to goods re-exported from third countries, with a particular focus on those originating from China.

            Vietnam has pledged to open its market to a wide array of US products. Crucially, it has also committed to implementing stringent measures aimed at restricting the transshipment of Chinese goods through its territory, a long-standing concern for Washington.

            In a significant win for American exporters, US goods will now enjoy duty-free access to the Vietnamese market, effectively granting “total access”, particularly for large-engine vehicles such as SUVs, as emphatically stated by President Trump (how SUVs are going to circulate in the narrow alleys of Hanoi and Ho Chi Minh City, infested by swarms of mopeds, is a different story).

            This agreement is expected to catalyse growth in several key sectors. Electronics, textiles, furniture, energy (especially Liquefied Natural Gas), and agriculture are poised for expansion. US firms specialising in manufacturing technology, energy solutions, and agricultural products are anticipated to be the primary beneficiaries. Furthermore, beyond immediate trade benefits, the agreement is set to reshape investment strategies, encouraging a greater localisation of supply chains within Vietnam. This strategic realignment is also expected to further solidify the already robust US-Vietnam Comprehensive Strategic Partnership.

            While the potential upsides are considerable, it is imperative for businesses and investors to approach this new landscape with a clear understanding of the accompanying risks. From my vantage point, I identify several significant execution challenges and structural impediments that require close monitoring.

            Enforcement of Transshipment Controls

            The most immediate and perhaps formidable risk lies in the effective enforcement of transshipment controls. Vietnam has historically served as a significant assembly point for Chinese-manufactured components. Ensuring that goods originating from China are not merely re-routed through Vietnam to circumvent US tariffs will require exceptionally close monitoring and robust verification mechanisms. The legal and practical complexities of definitively determining the true country of origin for all goods will undoubtedly pose a persistent challenge. As a European citizen, witnessing how the EU-Vietnam Free Trade Agreement (“EVFTA”), which poses an important stress on certificates of origin, I am particularly aware of this matter.

            While Vietnam has made remarkable strides in its economic development, certain structural issues could hinder its capacity to scale up high-value manufacturing in the short to medium term. These include:

            Legal framework nuances

            Vietnam’s legal framework for foreign investment has seen continuous improvements, but legal and cultural complexities and inconsistencies can and do still arise. Navigating the regulatory landscape, particularly with new rules stemming from this agreement and at a time of deep administrative, governmental, digital and legal reforms in Vietnam, will demand expert legal guidance to ensure compliance and mitigate potential fines and disputes. Issues surrounding so-called sublicences for businesses, intellectual property rights enforcement and contract enforceability, whilst improving, still require careful consideration;

            Education

            The ambition to transform Vietnam into a high-value manufacturing hub necessitates a workforce equipped with advanced skills. While the Vietnamese government prioritises education and workforce development, a significant portion of the current labour force lacks formal training and specialised certifications, let alone a good command of the English language. Bridging this skills gap, particularly in areas like advanced manufacturing, engineering, and digital technologies is a necessity and not just in light of this framework agreement. Companies may need to factor in substantial investment in training and upskilling programmes for their Vietnamese employees.

            Infrastructures

            Despite considerable investment, Vietnam’s infrastructure, particularly in logistics, energy, and transportation, continues to face bottlenecks. And China – the apparent target of Trump’s tariffs – is stepping in with high-speed trains connecting it to the northern Provinces of Vietnam. An increased volume of high-value manufacturing and trade will place further strain on existing infrastructure. Inadequate port capacity, congested roads, and a reliable energy supply (including for EV charging) are critical concerns that could impact efficiency and increase operational costs for businesses.

            Policy divergence

            This framework agreement deepens US-Vietnam trade ties and seems to be paving the way for more US investments in Vietnam, but this second aspect seems to run counter to parallel US policy objectives aimed at reshoring manufacturing back to the United States. This potential divergence in strategic priorities could introduce yet another element of unpredictability in the long term, necessitating a flexible and adaptable investment approach. Future shifts in US policy could impact the durability and full extent of the benefits derived from this agreement.

            This trade agreement, if finalised and implemented, undoubtedly represents a structural shift in global trade dynamics. It strategically positions Vietnam as an increasingly important high-value manufacturing hub and significantly deepens US engagement in Southeast Asia. We will need time, however, to assess the practical impact of the agreement, observing the efficacy of its implementation, and understanding how Vietnam’s inherent strengths and challenges will ultimately shape its role in the reconfigured global supply chain.

            We will also need to see what China, if anything, will do as a countermeasure. In fact, any assessment of Vietnam’s evolving trade landscape would be incomplete without a thorough consideration of China’s influence and strategic posture. President Xi Jinping has consistently championed a vision of a “community of shared future for mankind,” a concept that, while outwardly promoting global cooperation, also subtly underscores a demand for international alignment with Beijing’s interests. In the context of escalating trade tensions, Xi has repeatedly warned that “trade wars have no winners,” advocating for unity against protectionist measures, yet simultaneously implying that nations must ultimately choose sides, either with or against China’s economic and political orbit. Vietnam, despite its historical complexities and occasional maritime disputes with Beijing in the South China Sea (or East Sea, as it is officially called by Hanoi), remains deeply interwoven with China’s economy. China has been Vietnam’s largest trading partner for many years, with significant inflows of Chinese FDI, loans, and project contractors. This economic dependency is particularly evident in various sectors, where Chinese components and materials form a substantial part of Vietnamese manufacturing supply chains. While Vietnam has actively sought to diversify its trade partners and reduce its reliance on China, the sheer scale of the bilateral economic relationship means that disentanglement is a long-term, complex endeavour. Furthermore, China’s influence extends beyond direct trade into crucial regional resources. The Mekong River, a lifeline for millions in Southeast Asia, originates in China, which has constructed numerous upstream dams.

            As Vietnam navigates its enhanced trade relationship with the United States, it must simultaneously contend with the enduring economic gravity and strategic ambitions of its northern giant neighbour. Any perceived move by Vietnam to significantly shift away from China could invite retaliatory measures or heightened pressure from Beijing. Businesses investing in Vietnam must not only grasp the intricacies of the US-Vietnam agreement but also meticulously analyse how these developments will intersect with, and potentially be impacted by, the intricate, often delicate, and sometimes fraught relationship between Hanoi and Beijing. Understanding this geopolitical tightrope will be essential for sustainable success in the Vietnamese market. Prudence, informed legal counsel, and a keen eye on evolving geopolitical and economic realities will be paramount for those seeking to capitalise on this transformative new chapter.

            Takeaways

            • Tariffs:The US-Vietnam framework agreement marks a significant departure from previous trade dynamics, reducing US tariffs on most Vietnamese imports to 20% (from a mooted 46%) while imposing a 40% tariff on transshipped goods, especially from China.
            • Vietnam’s market opening:Vietnam has committed to duty-free access for a broad range of US products and stricter controls on Chinese goods transiting its territory.
            • Growth / manufacturing shift potential:The agreement is expected to fuel expansion in Vietnamese electronics, textiles, furniture, energy (LNG), and agriculture. It also encourages supply chain localisation within Vietnam (normally more of an assembly point for Chinese products).
            • Execution challenges: Effectively preventing the re-routing of Chinese goods through Vietnam to avoid tariffs will be a complex and demanding task; Despite economic progress, Vietnam faces hurdles in scaling high-value manufacturing due to legal framework nuances (e.g., sublicences, IP enforcement), a skills gap in its workforce (lack of formal training, English proficiency) and infrastructure bottlenecks (logistics, energy, transportation).
            • US policy divergence:The agreement’s encouragement of US investment in Vietnam appears to contradict the broader US policy objective of reshoring manufacturing.
            • China:Businesses must consider China’s significant economic sway over Vietnam, including its position as Vietnam’s largest trading partner, its FDI, and its control over shared resources like the Mekong River. Any major shift by Vietnam away from China could lead to retaliatory measures from Beijing.
            • Uncertainty:This is not a final agreement, so the situation might change. Prudence and informed legal counsel are crucial for businesses navigating this evolving landscape.

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              Assessing the US-Vietnam Framework Agreement on Trade

              13 de julio de 2025

              • EEUU
              • Vietnam
              • Contratos de distribución
              • Derecho Fiscal y Tributario

              Executive Summary

              The African Continental Free Trade Area (AfCFTA) remains one of the most ambitious integration projects in the world. Yet, several years into its operational phase, it has not (yet) delivered the structural shift many expected. A recent analysis underscores the gap between political momentum and economic reality: implementation remains uneven, the agreement is still used by only a portion of participating states, and non-tariff barriers and infrastructure deficits continue to dominate the cost of doing business across borders.  For Egypt, the opportunity is still real — but it depends less on treaty headlines and more on enabling conditions: trade logistics, customs efficiency, regulatory convergence, and competitive industrial capacity. 

              Looking Back: The Promise of a Single African Market

              When the AfCFTA was launched, expectations were understandably high. A continent-wide trade framework was supposed to reduce tariffs, facilitate trade in goods and services, and strengthen regional value chains — with the broader goal of moving African economies up the value ladder.

              In my 2022 article, I asked whether AfCFTA could become a game changer for Egypt, given Egypt’s industrial base, strategic geography, and the potential to diversify export markets beyond traditional partners. (For background, see the earlier article here”).

              The Reality Check: Intra-African Trade Remains Structurally Weak

              Several years later, the interim assessment is sobering. As the Frankfurter Allgemeine Zeitung (FAZ) recently put it, AfCFTA is not a “game changer” yet, and only about half of member states currently meet the practical prerequisites to trade under the agreement.

              A deeper reason is structural: no other world region trades so little with itself, and while statistics may undercount informal cross-border flows (especially in food), the overall picture remains unchanged.

              Trade integration cannot deliver transformative outcomes if production, logistics, and institutions do not support scale.

              Implementation Has Been Slow — and Often Symbolic

              Operationalisation did not start with full-scale liberalisation. Instead, the AfCFTA began with a pilot approach: the Guided Trade Initiative (GTI) launched in October 2022, initially with eight states, later joined by additional countries, including Nigeria and South Africa by spring 2025.

              The GTI created valuable learning effects, but it also underlined a key point: early progress was often presented through symbolic deals, while product coverage and volumes remained limited. FAZ highlights that only selected goods could be traded duty-free and that key sectors remained constrained for a long time due to missing or unresolved technical rules.

              A pilot, however, cannot substitute for full operational certainty — the kind businesses need to restructure supply chains and invest.

              Tariffs Are Not the Main Barrier — Trade Costs Are

              AfCFTA is frequently discussed in terms of tariff liberalisation. Yet, evidence suggests that the largest gains do not come from tariffs but from reducing non-tariff barriers and improving trade infrastructure.

              FAZ points to a central reality: tariffs tend to add around 20–30% to intra-African trade costs, whereas non-tariff costs can be far higher — driven by bureaucracy, lack of harmonised standards, inefficient border processes, and transport barriers.

              This is the crux: even with reduced tariffs, trade will not expand meaningfully if goods still cannot move cheaply, quickly, and predictably.

              Integration Complexity and Distributional Politics

              Africa’s integration landscape is shaped by multiple overlapping regional economic communities and trade regimes. This creates legal and administrative complexity — often described as an integration “spaghetti bowl.” FAZ notes the challenge of coordination and the continued fragmentation of rules.

              There is also a political economy dimension. Intra-African trade is heavily influenced by a small number of larger economies — and the distribution of benefits matters. FAZ highlights the dominance of major players (notably South Africa) and the concern that tariff liberalisation alone may entrench existing industrial advantages.

              Where governments expect asymmetric outcomes, resistance often takes the form of delay, narrow implementation, or persistent non-tariff barriers.

              What This Means for Egypt: The Opportunity Is Real — But Conditional

              Egypt’s strategic case for AfCFTA participation remains strong: industrial potential, geographic location, and the opportunity to access and shape growing markets. But the experience so far suggests that the treaty text alone does not generate trade flows.

              For Egypt’s private sector, the decisive factors are practical:

              • predictable and efficient customs clearance and border procedures,
              • logistics corridors and port efficiency,
              • regulatory convergence (standards, certification, compliance),
              • stable access to trade finance and payments,
              • competitive energy and production conditions for manufacturing and processing.

              AfCFTA can support these developments — but it cannot replace them.

              The “Game Changer” Pathway: What Must Happen Next

              FAZ concludes that AfCFTA will only become truly impactful if it is paired with the fundamentals: major infrastructure investment, stronger production and processing capacity, and a credible industrial policy.

              At the same time, Africa faces a classic chicken-and-egg problem: without development there is limited investment appeal; without investment there is limited development.

              For Egypt and its partners, a pragmatic strategy would be to:

              1. treat AfCFTA as a platform for real trade-cost reduction, not only tariff debates;
              2. focus on a limited number of scalable corridors and sectors where regional value chains can realistically grow;
              3. strengthen implementation capacity so that preferences become usable for firms — especially SMEs;
              4. enhance legal certainty and dispute resolution reliability for cross-border commerce.

              Conclusion

              AfCFTA remains a landmark achievement in terms of political commitment. But as of today, it has not yet been the “game changer” many hoped for.

              For Egypt, the key question is no longer whether AfCFTA is visionary — it is. The question is whether governments and businesses can translate it into lower real trade costs, higher competitiveness, and bankable cross-border transactions. If those enabling conditions improve, AfCFTA’s promise can still become commercial reality.

              After “Liberation Day,” many foreign companies offered discounts to American importers to help them offset the tariffs. A few months later, the US Supreme Court declared the «reciprocal» tariffs unlawful, but on the same day, President Trump announced new tariffs. In this article, we provide a practical overview of how to handle various scenarios, shifting from a reactive, unstructured approach to deliberate management of price volatility and trade flows caused by the introduction, adjustment, and removal of tariffs.

              Tariff Sharing agreements

              For a long time, the question has been straightforward: who absorbs the extra customs cost? The exporter? The importer? Both? The question remains important, but today it is incomplete.

              The new scenario, in light of the recent ruling by the US Court of Justice on March 20, 2026, is: what happens if that duty is then canceled and refunded? If the cost was shared between the parties, the benefit of the refund must follow a consistent logic. In the absence of a clear agreement on this point, however, there is a risk of economic misalignment that could compromise the commercial relationship.

              Let’s imagine an Italian winery that sells its products to a US importer. Following the introduction of reciprocal duties, the parties have decided that the exporter will grant an extraordinary discount of 7.5%, explicitly motivated by the need to share the impact of the duty. The commercial relationship continues, volumes remain stable, and the importer avoids passing on the entire increase to the end customer.

              As a result of the Supreme Court ruling (or, in the future, another ruling or administrative decision), the importer obtains a refund of the duties paid during that period.

              If no formal agreements have been made on this point and the documentation refers generically to a «commercial discount» and says nothing about reimbursement, the situation afterward may be difficult to reconstruct and, above all, could lead to commercial tension. As a result, a positive development (the cancellation of the duty and the right to reimbursement) becomes a problematic factor that jeopardizes the relationship.

              Is the exporter entitled to a refund of the discounts granted to mitigate the duties?

              In the absence of a different agreement between the parties, the right to reimbursement belongs to the party who paid the duty, i.e., in most cases, the importer. Therefore, there is a risk that the importer will enjoy a double benefit (the discount and the duty refund), while the exporter will get nothing.

              For this reason, it is essential that the parties do not limit themselves to negotiating prices and discounts, but also establish the consequences of the adoption, modification, or revocation of duties on the contract, including any refunds.

              To achieve this, the first step is to accurately classify and document the discounts granted. If only a «commercial discount» appears in emails, commercial orders, credit notes, and invoices, it will be harder to later argue that this discount was actually an extraordinary, temporary contribution related to the duty. Conversely, if the documentation and contract specify that it is a tariff sharing or tariff mitigation measure, identifying the amounts to be refunded after the fact becomes much simpler.

              The goal is to create a clear view of the trend in discounts and payments so that, if needed, financial flows can be adjusted to align with the original terms of the agreement: if the exporter has helped cover a cost that then, in whole or in part, does not end up materializing, they will be eligible for a refund of the contribution paid.

              The contract will therefore include, in addition to the Tariff Sharing clause, a Tariff Reimbursement Allocation clause, which states that if the importer receives a refund, credit, or any other economic benefit related to the duty for which the exporter has granted a discount, the importer must return the corresponding portion of the benefit to the exporter in full. or proportionally, depending on how the parties intend to distribute risk and incentive.

              Importer’s responsibility to seek reimbursement

              It is unclear whether, in the case of US reciprocal duties, importers can simply file an administrative claim to get a refund or if legal action will be required. The latter seems more probable.

              Generally, obtaining a duty refund involves action, deadlines, documentation, and coordination with brokers and customs consultants. In most cases, the entity controlling the process is the importer (or someone acting on their behalf).

              This raises a sensitive but very real issue: if the importer knows that they will have to invest time and money to obtain a refund, only to then have to share the benefit with the exporter, their incentive to take action may be reduced. To prevent this inertia  the contract should contain an express obligation to take action, set out as a duty of best efforts or commercially reasonable efforts.

              For example, the contract should specify that the importer must inquire about the conditions and time limits of the process, keep relevant documentation, regularly inform the exporter about the progress of the initiatives, and not unilaterally waive or reduce the claim if it affects the exporter’s economic rights.

              Preventive Agreements on Litigation and Cost Allocation

              When reimbursement involves a lawsuit or structured legal action, the obstacles are organizational and financial: who decides if and when to proceed, who selects the lawyers, who pays the costs upfront, how the net recovery is divided, and who has the final say on a settlement. This generally applies to all contracts, not just this case: dispute resolution methods must be addressed and agreed upon before the problem arises.

              Otherwise, the dispute resolution process risks becoming a secondary improvised negotiation at the worst time — when the parties are already under pressure from margins, cash flow, and regulatory uncertainty. As a result, it becomes much harder to reach an agreement.

              How to handle new tariffs and their potential cancellation

              To safeguard against uncertainty, the agreement should be organized into two stages.

              • The first stage regulates the immediate impact of the change in scenario, for example, the introduction of a new tariff or its increase (renegotiation, cost sharing, automatic adjustment : I discussed this in this article).
              • The second stage manages the possible «rollback» (right to reimbursement, process, allocation criteria).

              This approach has a clear benefit: it does not force the parties to discuss every time the tariff regime changes or a decision to cancel tariffs is made. Instead of reacting to market changes, a tool is adopted to manage potential scenarios, which is much more resilient commercially and easier to oversee, as the rules have already been agreed upon.

              This allows the impact of duties to be regulated not as an extraordinary variable, to be agreed upon on a one-time basis, but as a structural, adaptable phenomenon that could last a long time.

              This is why it is crucial to know how to draft contracts that cover both the current situation and potential changes, including any refunds.

              Conclusion: Three practical steps for companies exporting to the US

              The first is to agree on the consequences for the contract of the introduction of a new duty, increasing it, or revoking it (renegotiation, cost sharing, automatic price adjustment, right to share the refund).

              The second is to clearly document any discount granted to offset a duty. If it remains a generic «commercial discount,» the right to a refund if reimbursement occurs will be much harder to enforce.

              The third step is to determine what happens if the duty is canceled or revoked: the importer’s responsibility to take action to get a refund, manage the administrative process or litigation, how to divide costs, who oversees the activities of consultants and lawyers, and how the recovered funds will be allocated.

              How do you approach negotiating a trade agreement with China?

              Based on my experience, let’s examine the issues to be addressed and the main questions to ask, taking the negotiation of a trade distribution agreement as a practical example.

              Let’s start with the first issue that is important to clarify.

              Nice Business Card – But Who Is This Guy?

              Business cards, websites, printed or digital brochures, presentations, and any other materials shared in English have no official value in China.

              The company name of the counterparty and the first and last names of people representing it or acting on its behalf, written in English, are only fictitious names.

              To be certain of the company’s data and the identity of the persons, it is necessary to ask for the information in Chinese, with particular reference to the company’s business license (equivalent to the Companies House or Chamber of Commerce’s excerpt), from which the name, corporate purpose, registered and paid-up share capital, and the name of the legal representative can be inferred.

              The data can then be verified by accessing the portal of the State Administration of Industry and Commerce (SAIC) of the province where the Chinese party is based.

              This first verification is essential to ensure that you do not waste time or even run into scams (here’s an in-depth article on Legalmondo’s blog).

              If You Don’t Own Your Trademark, Someone Else Will – and Charge You for It

              Trademark First, Trade Later. China operates on a first-to-file system for trademarks, which means that the first person or company to register a trademark – not necessarily the original creator or most famous user – gains the legal rights to it. This creates a serious risk: if you haven’t registered your trademark in China, someone else might do it before you, and then either use it freely or demand a hefty ransom to give it back. Even high-profile figures like Elon Musk and Michael Jordan have been entangled in costly and protracted disputes with Chinese trademark squatters. In many cases, getting the mark back is highly complicated, and sometimes legally impossible.

              To avoid this, register your trademarks early, even before entering the Chinese market. File directly with the China Trademark Office (CTMO) and don’t stop at the English version — consider registering a Chinese character version as well, since that is how your brand will often be known locally.

              Once that base is covered, clearly state in your contract that your Chinese partner is not allowed to file a registration of any of your trademarks in China, in Latin or Chinese characters, and that he will use trademarks and IP rights in strict conformance to the contract and your instructions.

              For a deeper dive into how to effectively protect your IP rights in China, check out our detailed article on the Legalmondo blog.

              Contracts can wait. First, get on the same page

              When negotiating with a Chinese partner, it’s often a mistake to begin the conversation by exchanging contract drafts. Instead, focus first on the substance — the relationship’s commercial and technical terms. Using a clear checklist of key discussion points (such as products, pricing, delivery terms, technical standards, after-sales support, exclusivity, duration, payment terms, etc.) helps ensure that both sides are aligned on what really matters. Take detailed notes and keep minutes of the discussions, especially where and when consensus is reached, and make sure those minutes are circulated and expressly agreed upon. Once substantial agreement has been achieved on the main terms, this memo can then be handed over to your lawyer, who will translate the business understanding into clear and coherent contractual language. This approach saves tons of time, as it helps avoid unnecessary back-and-forth on legal language before the core deal is in place.

              Think Your NDA Covers You in China? Think Again

              Yes, they are—and often underestimated. A well-drafted Non-Disclosure Agreement (NDA) is essential when the parties plan to exchange confidential information, such as technological know-how, commercial strategies, supplier data, or client lists. Especially in the early phases of negotiation or cooperation, before a main contract is signed, an NDA helps protect intellectual and business assets.

              However, as with all contracts in China, a generic NDA template copied from other jurisdictions will likely be of limited use. To be truly effective, the NDA must be adapted to the specifics of the Chinese legal environment. This includes ensuring that it is enforceable in China: the NDA should include the proper dispute resolution mechanism (see below on why you should consider applying Chinese law and litigating in China), and it must specify clear, valid, and proportionate penalties for breach. In Chinese practice, stating specific contractual penalties (liquidated damages) is often more effective than vague references to compensation, as courts and arbitrators in China tend to enforce these more reliably if they are reasonable.

              While a good NDA is useful, it often falls short in China’s manufacturing and sourcing landscape. This is where the NNN Agreement – standing for Non-Disclosure, Non-Use, and Non-Circumvention – becomes critical. Unlike standard NDAs that primarily focus on confidentiality, an NNN Agreement is designed to address the unique risks of doing business in China. It prevents the recipient from not only disclosing confidential information but also from using it for their benefit or bypassing the disclosing party to work directly with suppliers, clients, or partners. Which, in China, is a very real risk.

              This broader scope is vital when dealing with Chinese manufacturers or intermediaries, who may otherwise be tempted to replicate products or contact customers directly or through third parties. As seen with the NDA, also the NNN Agreement must be drafted in Chinese, governed by Chinese law, and enforceable in Chinese courts -otherwise, it may offer little real protection.

              Joint venture? Easy, Cowboy

              A joint venture is often the first proposal that comes up when negotiating with a potential Chinese partner. It seems appealing: sharing risks and investments, accessing the local market with an ally, leveraging their knowledge and network of contacts. But the reality is often very different from what it appears to be.

              A joint venture is a complex, expensive, and rigid corporate structure that requires significant investments of money, time, and human resources, as well as the ability to continuously manage often divergent interests among the partners. The vast majority of Sino-Foreign JVs have gone wrong, or will go wrong. Or very wrong. First and foremost, because the JV is usually managed by the Chinese partner, and exercising effective control over the company’s operations is a very challenging undertaking.

              Before going down this road, it is essential to ask yourself a few questions: Is the joint venture really indispensable for developing this business in China? (Spoiler: generally, no). Are there less restrictive and risky alternatives, such as a distribution agreement or a licensing agreement? (Yes, almost always). And above all: how well do we really know our potential partner?

              A joint venture should only be considered if it is strictly necessary for the project’s development, after carefully verifying the commercial viability and the reliability of the Chinese partner, and ensuring the ability to maintain effective control over the JV’s operations.

              It is better to start with simpler and more flexible forms of collaboration to test the market and the relationship with the other party before committing to such a demanding investment. Otherwise, the mirage of the joint venture risks turning into a nightmare that can be very costly.

              Memorandum of Understanding: Where Good Intentions Become Bad Contracts

              A Memorandum of Understanding (MoU) is a helpful tool at the early stage of a commercial relationship. It serves as a roadmap for future negotiations, where the parties outline the main principles and intentions that will guide the drafting of the final agreements. When used correctly, an MoU can significantly facilitate negotiations by ensuring that both sides commit to negotiating the agreement in good faith and share a common understanding of key points such as pricing models, territorial scope, exclusivity, milestones, budget, or performance expectations.

              However, an MoU must be used for what it is: a preparatory document, not a binding contract. Care must be taken to avoid ambiguity and unintended commitments. The text should clearly specify that the parties remain free to conclude – or not – the final agreements and which clauses are non-binding – such as the commercial framework or indicative timelines – and which provisions are binding, typically confidentiality, exclusivity during the negotiations (if agreed), governing law, and dispute resolution. A poorly drafted MoU, which includes overly precise and complete terms, can be misinterpreted as a final agreement, creating unnecessary legal risk. So yes, MoUs are valuable – but only when used correctly. If you’d like to know more, go deeper by reading this article.

              Bad Drafts, Big Headaches, Poor results

              Draft agreements used in China are often copied and pasted from incomplete, superficial, poorly organised templates written in bad English, which often do not match the Chinese version of the contract.

              Correcting and integrating these drafts is complicated and more time-consuming than starting from a good template, with suboptimal results.

              It would be better to propose a consistently constructed text and ask the other party to propose any changes and additions to this draft.

              Your Western Contract Template Won’t Work Here

              Even if an English-language contract is perfectly valid, there are many reasons why using contract templates built for other countries in the Chinese market is inadvisable.

              The first is the fact that Anglo-Saxon-based agreements, such as those for the U.S., refer to a common law system (which is based on judicial decisions and case law precedents) that is very different from that of civil law countries (such as China and Italy), which derives from the Roman legal tradition, based on a codified set of written laws.

              It follows that the layout of an agreement on the Anglo-Saxon model is different, much more detailed, and wordy than that of a typical agreement based on a civil law system. Since contract negotiations in China are generally lengthy and complex, working on redundant and complicated text at the outset does not help.

              If we stick to the example of a distribution contract, it should be added that it is advisable to apply Chinese law to provide for arbitration based in China (e.g., at CIETAC) or in Hong Kong or Singapore (third countries, where, however, the costs of the procedure increase significantly) as the mode of dispute resolution. So, the contract should be built on a model that conforms to the law that will apply to the relationship.

              Home Court Advantage Won’t Help You in China. In fact, quite the opposite

              This is a typical point of disagreement in the negotiation of an international contract: the parties aim to have the law of their own country apply, and to stipulate that any disputes be adjudicated by their domestic courts.

              In our case, insisting on the application of Italian (or any other foreign) law and state court is not a good idea: it should be considered, in fact, that a distribution agreement is carried out, for the vast majority, in the country where the distributor operates and where the products are sold (in our case, in mainland China).

              In disputes, the parties’ (particularly the manufacturer’s) interest is to obtain a quick decision by the adjudicating body, especially if situations requiring immediate protection (such as unfair conduct or counterfeiting of trademarks and patents by the distributor) are ongoing.

              None of this is possible if one goes to an Italian judge (with lengthy litigation time and the need then for a complex and costly process to recognise and enforce the decision in China); on the contrary,  an arbitration in China, applying Chinese law, allows one to reach a decision quickly (on average 6-9 months) and, if necessary, also to obtain urgent measures to stop any unfair conduct.

              Chinese Law Isn’t a Black Box (If You Know What You’re Doing)

              The lawyer assisting you should know it.

              Therefore, it is not a leap in the dark, and one should not fear surprises.

              In addition, it should be remembered that an agreement is primarily based on the covenants that the parties have written in the contract; therefore, if the contract has been well drafted, the rules to be applied are clear.

              Finally, if we consider distribution agreements, keep in mind that they are a framework contract, within which a series of separate product sales contracts are concluded. If both countries are contracting parties to the 1980 Vienna Convention on the International Sale of Goods (CISG), then the uniform, clear, and balanced rules of the convention apply automatically, just don’t opt out!

              One Contract, Two Languages

              The contract is also valid in English only.  However, it is undoubtedly advisable to draft a Chinese version with facing text.

              This is for several reasons: first, it prevents the Chinese party from having to arrange for a translation of the text during negotiations for its own internal use (top managers often do not speak English), thus slowing down the various steps of negotiations.

              Also, to ensure that the Chinese side fully understands the agreement’s content and to avert misunderstandings (real or instrumental) about the interpretation of certain covenants.

              Finally, it should be borne in mind that if the contract were later to be used before a court or administrative authority in China, the only language admitted would be Chinese; for this reason, it is better to have already a text agreed and signed by the parties in Chinese as well, rather than having to prepare a unilateral translation later.

              Sign. And chop

              Does the contract need to bear the company’s official stamp? Yes, and this point is absolutely crucial. In China, a company’s official «chop» (the red-ink stamp) is equivalent to a signature and is conclusive proof that the person signing the contract has the authority to represent the company. A signature alone, even from someone with an important-sounding title, may not be sufficient if it is not accompanied by the official chop. Without it, the contract might later be challenged or even considered void. Before signing, always verify that the stamp used matches the one registered with the company’s business license or official corporate records, and ensure that the stamp is applied on every page or at least on the signature page, in line with local practice.

              Don’t Let Your Contract Collect Dust

              Things change fast, especially in China. New products are added, market conditions evolve, people leave the company, new competitors emerge on the horizon, and so on. Companies constantly adapt to the new conditions, and so must the contract.

              Any change in the relationship should be formalized correctly. To avoid misunderstandings and disputes, it’s advisable to include an integration clause in the contract, specifying that any amendments or additions will only be valid if agreed in writing, signed by the parties’ authorized representatives, and annexed as an addendum to the original agreement.

              It’s not enough to include this clause – you must follow it consistently. If things change, agreements reached verbally, through Wechat messages, and through email exchanges may make things complicated if they are not formalised adequately according to the procedure set out in the original contract.

              If you’d like to go deeper, check out this article.

              Son bastante frecuentes las relaciones comerciales con agentes o distribuidores que duran años y sin ningún documento firmado. Y, cuidado, porque ya sabemos que un contrato puede existir incluso verbalmente.

              La inexistencia de un contrato escrito va a añadir dificultades en una posible reclamación, por eso, lo que se haga entre la decisión de ponerle fin y el momento de la reclamación es muy importante. Recuerda: “cualquier cosa que escribas será usada en tu contra”.

              La decisión de terminar una relación comercial es un momento muy delicado al que, no sé por qué, a los abogados no se nos invita. Os doy algunos ejemplos (todos reales) en los que las empresas o algún empleado con la mejor voluntad escribió al agente/distribuidor. Todos fueron luego muy perjudiciales para la empresa:

               

              Decir “Ponemos fin a nuestra relación comercial” cuando la estrategia será defender que dicha relación comercial no existe, sino que son contratos independientes y encadenados (por ejemplo, suministro en lugar de contrato continuado de distribución; consecuencias de indemnización muy relevantes).

              “Usted ya no representa a nuestra sociedad”, lo que puede ser una prueba de que antes sí lo hacía.

              “A partir del día X usted ya no puede actuar en nombre de nuestra sociedad” que probaría que antes sí podía actuar en su nombre.

              “Usted no puede asistir a la feria de X en nuestro nombre”. Una forma de confirmar que entre las competencias del agente/distribuidor estaba participar en ferias y probablemente acredita los clientes obtenidos.

              “Las ventas promovidas por Ud. se han visto reducidas significativamente en el año N”. Cuando no hay contrato escrito ni otra forma de documentarlo, imputar un incumplimiento de una obligación que no está clara, puede ser contraproducente.

              Decir “No estás llevando a cabo una promoción activa de nuestros productos” para añadir a continuación: “le instamos a que deje de promocionar la venta de nuestros productos”.

              “Usted deja de ser nuestro representante exclusivo”, lo que prueba un tipo de relación (representación/agente) y un acuerdo tácito o expreso (“exclusividad”)

              “Hemos designado a otro representante en su zona”, que demuestra que el agente/distribuidor tenía una zona asignada y “representaba”.

              “A partir de este momento los pedidos serán asumidos por X” que, igualmente confirma un tipo de relación.

              En resumen: a partir del momento en el que la empresa valora poner fin a una relación comercial, sobre todo cuando no está escrita y antes de enviar cualquier carta, es conveniente pensar bien en la estrategia de cara a una posible reclamación. Es el momento más adecuado para asesorarse y evitar sorpresas. Cualquier comunicación que no esté alineada con esa estrategia diseñada desde el principio solo podrá aportar confusión y problemas.

              Remember the USA – EU agreement on 15% tariffs? I wrote that with a negotiator like Trump the game is never over (article here) and—after the recent interlude featuring a threat of 100% tariffs on pharmaceuticals—the U.S. government has announced the imposition of an overall 107% duty on Italian pasta, which could take effect on January 1, 2026.

              Where this new duty comes from

              The antidumping investigation was launched by the U.S. Department of Commerce at the request of certain competing American companies and is based on a 1996 antidumping order that allows for periodic reviews of imports of Italian pasta. The Department of Commerce conducts these checks annually to assess whether Italian producers are selling pasta at prices lower than the U.S. domestic market, a practice known as “dumping.”

              Companies involved in the investigation

              The Department of Commerce selected two sample companies for in-depth analysis, defined as “mandatory respondents”: La Molisana and Pastificio Lucio Garofalo. According to the official document published by the U.S. administration, for the period from July 1, 2023 to June 30, 2024, both companies allegedly sold their products below market prices, resulting in the imposition of a duty of 91.74%.

              U.S. authorities justified this percentage by claiming the two companies did not provide complete or compliant information as requested by the Department and were therefore insufficiently cooperative during the investigation. What is very important is that, in addition to the two companies directly examined, the additional 91.74% duty is also applied to numerous other Italian producers not individually reviewed. This methodology, while formally permitted under U.S. law as an exception, is being applied without any direct verification of the other companies.

              Next steps in the procedure

              Italy’s Ministry of Foreign Affairs moved immediately, formally intervening in the proceeding as an “interested party” through the Italian Embassy in Washington. The Foreign Ministry is working in close coordination with the companies concerned and, in concert with the European Commission, to persuade the U.S. Department to revise the provisional duties.

              The two companies involved (La Molisana and Garofalo) can submit documentation to contest the dumping allegations. However, if dumping is confirmed, the Department of Commerce will instruct Customs to apply antidumping duties on goods sold and entered into U.S. commerce.

              The preliminary nature of this determination means there is still room to change the decision before it becomes final.

              Possible effective date

              The new super-duty of 91.74%, which will be added to the existing 15% tariff for a total of 107%, is scheduled to take effect on January 1, 2026. This date therefore represents a crucial deadline for all ongoing diplomatic and legal actions.

              If confirmed, the economic impact would be significant: in 2024, Italian pasta exports to the United States reached a value of €671 million according to Coldiretti, accounting for nearly 17% of the sector’s total exports. A 107% duty would risk seriously undermining competitiveness in one of the most important markets for Italian agri-food products.

               What to do between now and January 1, 2026?

              At this stage, the entry into force of the new duty depends on the outcome of the ongoing procedure: given what has happened in recent months, and the political use the U.S. administration has made of tariffs—well beyond their technical function—it is reasonable to be pessimistic.

              So, what to do? In recent months we have seen companies react to the uncertainty over the fate of the tariffs in three ways:

              • Some rushed to ship as many products as possible before the potential effective date of the duty;
              • Some granted—upfront—discounts equivalent to the threatened duty, in case it came into force;
              • Some suspended orders, pending definitive news on the impact of the duties.

              These are all  valid options, but other effective tools for managing the uncertainty caused by the flurry of announcements, negotiations, and threats from the U.S. administration should not be forgotten: the risk of new duties being introduced, or existing ones being increased, can be managed in the contract by agreeing with the U.S. importer how any tariff change will affect the product.

              The parties can stipulate, for example, that the increase will be split equally; or that the importer will bear it beyond a certain threshold; or that if the duty exceeds a certain level, the contracts may be terminated. You can find a deeper dive in this article.

              The only certainty is that trade relations with the U.S. will stay unpredictable for a long time, and it’s vital to carefully manage the risk factors involved in selling products there. Right now, the focus is on tariffs and prices, and I encourage you to take this chance to thoroughly review existing agreements and assess whether—and how—other important points are addressed that could entail significant liabilities: we discuss them, very practically, in this book.

              On 29 June 2025, the Vietnamese government introduced Decree No. 163/2025/ND-CP (Decree 163). This decree provides detailed guidance on how the updated Law on Pharmacy will be implemented.

              Like the amended Law on Pharmacy, Decree 163 came into effect on 1 July 2025, replacing the previous Decree No. 54/2017/ND-CP (Decree 54). The new decree sets out comprehensive rules for key aspects of managing pharmaceuticals, including:

              • Pharmacy practice certificates
              • Certificates allowing pharmaceutical businesses to operate
              • Import and export of medicines and drug ingredients
              • Good Manufacturing Practice (GMP) inspections of overseas manufacturers
              • Recalling medicines and drug ingredients
              • Certificates for medicine advertising content
              • Medicine price management

              Key Changes in Decree 163

              Here are some important changes and additions introduced by Decree 163:

              Destroying Specially Controlled Medicines

              You no longer need to get approval from the relevant authority before destroying narcotic, psychotropic, and precursor drugs, or pharmaceutical ingredients that are narcotic or psychotropic substances or precursors used in medicines. Instead, you just need to provide notification at least seven working days in advance. This notification must include the planned destruction date and a detailed list of items to be destroyed.

              E-commerce in Pharmaceutical

              Pharmaceutical businesses that sell products online must openly display the following information to ensure transparency and consumer safety:

              • Their certificate allowing them to operate as a pharmaceutical business.
              • The pharmacy practice certificate of the person responsible for pharmaceutical expertise.
              • Information about the medicines themselves.

              Shelf-Life Rules for Imported Products

              For medicines and ingredients with a total shelf life of nine months or less, at least one-third of their shelf life must remain when they clear customs. Medicines with a shelf life of 30 days or less must still be within their shelf life at the time of customs clearance.

              Controlling Imported Products

              All medicines with marketing authorisation (MA) are subject to import control, except for:

              • Medicines needed for preventing and treating Group A infectious diseases that have been declared epidemics, as per the Law on Prevention and Control of Infectious Diseases.
              • Medicines with a shelf life of less than 30 days.

              Importers must inform the provincial People’s Committee at least five working days before making a customs declaration. The People’s Committee can then issue a written notice of non-compliance to the customs authority within five working days of receiving this notification.

              Medicine Advertising

              Decree 163 adds a process that allows an approved medicine advertising certificate to be adjusted for certain changes (such as a change to the MA holder or manufacturer information). This means you don’t have to go through the entire initial registration process for medicine advertising content again, as was required under the previous rules.

              Medicine Price Management

              Businesses must announce or re-announce wholesale prices, similar to the medicine price declaration process under Decree 54. Some medicines are exempt from this requirement, including those provided free of charge for emergency responses, national health programmes, humanitarian aid, clinical trials, scientific research, or exhibition purposes, and medicines carried as personal luggage.

              The Ministry of Health (MOH) can make recommendations if the announced or re-announced price is significantly higher than similar medicines already on the market. This includes situations where:

              • The announced or re-announced wholesale price of the medicine is higher than the highest price of similar medicines.
              • The price difference is more than 35% (for medicines priced under VND 1 million) or 15% (for medicines priced at VND 1 million and above) compared to winning bid prices in tenders.
              • The announced or re-announced price is higher than prices in the country of origin or other markets (if there’s no similar product in Vietnam).
              • When such differences are found, the MOH issues a formal recommendation to the announcing business and publishes it online for transparency and accountability.

              Further Guidance in New Circular

              On 1 July 2025, the MOH issued Circular No. 31/2025/TT-BYT (Circular 31), which further details how the amended Law on Pharmacy and Decree 163 should be implemented. Circular 31 officially replaces Circular No. 07/2018/TT-BYT and Decree 54 and came into effect immediately.

              Key provisions of Circular 31 include:

              Notification of Practising Pharmacists

              Pharmaceutical businesses that are not part of a pharmacy chain must inform the relevant authority of a list of people currently working at the business who hold pharmacy practice certificates. This notification must be submitted within 15 days of the date the certificate allowing the pharmaceutical business to operate was issued, or when there are any changes to the list. This is a shorter deadline than the previous 30 days under earlier rules.

              Pharmacy chains have similar notification duties and deadlines. Specifically, the chain operator must inform the provincial authority where each pharmacy in the chain is located about the list of practising pharmacists at those sites. Additionally, pharmacy chains must notify the authority if pharmacies are added or removed from the chain, and if there are any rotations of the people responsible for pharmaceutical expertise between pharmacies within the chain.

              Medicine Information Activities

              Under Circular 31, medicine information can still be given to healthcare professionals through information materials, seminars, and medical representatives.

              However, Circular 31 introduces a significant change by removing the need to obtain a certificate for medicine information content before carrying out these activities. Under the new rules, pharmaceutical businesses, representative offices of foreign pharmaceutical companies in Vietnam, and MA holders are now responsible for creating and distributing medicine information materials. These materials must comply with the package inserts for medicines approved by the MOH, the Vietnamese National Drug Formulary, and any related documents and professional instructions issued or recognised by the MOH.

              Donald Trump, never one to shy away from drama or diplomacy-via-caps-lock, has slapped a 50% tariff on all Brazilian exports to the United States. The justification? In his own delicate prose: «The treatment of former President Jair Bolsonaro is a disgrace… A witch hunt that must end IMMEDIATELY!»

              And just in case anyone thought this was about trade imbalances or economic strategy, Trump made things crystal clear: «Due to Brazil’s insidious attacks on free elections…».

              In short, the 50% tariff isn’t about coffee, orange juice, or flip-flops. It’s about a Supreme Court judgment, applying Brazilian law, regarding Brazilian politicians accused of conspiring in a coup d’état. In other words, this is a brazen (and frankly absurd) attempt at judicial intervention via trade war.

              Trump, with his characteristic subtlety, offered a solution: manufacture in the U.S., and he’ll look kindly upon Brazil, like a mafia don offering «protection» after smashing your shop window. But what he meant was: consider Bolsonaro innocent, and we’ll talk.

              The Brazilian market took the bait

              Although the fishy interference in Brazilian affairs was determined from a fish out of the water, the market took the bait: in the first 48 hours after the infamous letter, at least 1500 tons of fish were already held in Brazilian ports, as US buyers suspended their contracts due to uncertainty about the costs upon arrival. The fish market is on alert, as 80% of the exports head to the US, mainly coming from small family-owned industries that distribute the catch from artisanal fishing communities.

              The same effect hit other sectors, from orange, honey, and coffee to aircraft.

              Brazil’s response and sorcery: don’t mess with us (or our weather)

              Naturally, Brazil will not sit quietly sipping caipirinhas while its sovereignty is trampled. Reciprocity is on the table: if Washington raises tariffs, Brasília can do the same. But above all, one thing is sure: Brazil will never tolerate foreign interference in its independent judiciary.

              And then, a curious coincidence: right after Trump’s speech, a tornado accompanied by lightning struck the White House grounds. Pure chance? Maybe. Or could it have been the work of Brazilian indigenous shamans, a particularly well-organized group of umbanda practitioners, or simply the fact that, as every Brazilian child knows, God is Brazilian.

              Trump might want to check the weather forecast next time before penning another angry letter.

              The unpredictable becoming predictable

              Trade wars are rarely tidy affairs, but one thing they consistently deliver is chaos (in legal terms, disruption). And when disruption meets contracts, force majeure disputes often end up in court.

              At first glance, Trump’s decision to impose a 50% tariff overnight might feel like an unpredictable thunderbolt (quite literally, given the weather at the White House). But here’s the catch: by now, unpredictable tariffs are becoming predictable. When a government with a well-documented love for impulsive economic diplomacy imposes politically motivated tariffs, can anyone claim to be surprised?

              In most jurisdictions, force majeure requires that the event be extraordinary, unforeseeable, and beyond the parties’ control. A sudden 50% tariff certainly ticks a few of those boxes, but following a repetition of erratic trade policy, one might argue that businesses should expect what in past times was considered unexpected, especially when dealing with certain jurisdictions or political figures. In other words, Trump’s tariffs might not excuse performance if parties didn’t prepare for exactly this kind of volatility.

              This is where good contract drafting comes into play

              Savvy businesses are learning that their contracts must go beyond a vague boilerplate clause about “acts of government” or “changes in law.” Instead, they should expressly address the risk of sudden tariff changes, including

              • hardship clauses that allow renegotiation when costs become commercially unreasonable;
              • price adjustment mechanisms linked to tariff thresholds;
              • termination rights triggered by specified levels of customs duties;
              • currency fluctuation provisions (because tariffs rarely travel alone, and currency swings often accompany them).

              In short, while no contract can immunize a business from every shock, smart drafting can mean the difference between a commercial headache and a catastrophic breach.

              Therefore, tariffs may no longer be an unpredictable storm; they are part of the new predictable landscape. Given that your contract might wake up tomorrow facing ‘IMMEDIATE’ punitive tariffs in all caps, your contract should be ready today.

              The unwitting cupid: strengthening EU-Brazil relations

              While the tariffs may ruffle trade flows between Brasília and Washington, there’s an unintended silver lining: Trump is proving to be the most efficient matchmaker between Brazil and other markets, such as China and the European Union.

              The EU-Brazil relationship, already a flirtation with promising prospects, with relevant progress in the EU-Mercosur Agreement, now seems destined for deeper romance. If Mr. Trump insists on isolating the US from Brazil, the old continent stands ready, with flowers and wine in hand, to pick up where the US left off. After all, Brazilian fish can pair up nicely with champagne, cava and prosecco.

              So thank you, Mr. Trump. In your quest to bully Brazil into submission, you may have done more to strengthen transatlantic ties than any EU Commissioner ever could. As they say in Brasília these days: Trump is not a trade warrior. He’s a cupid in disguise.

              The recent announcement of a landmark trade agreement framework, following just three months negotiations since President Trump’s tariffs announcement on 2 April 2025, signals a pivotal shift, not merely in bilateral relations, but in the broader architecture of global supply chains.

              As a commercial lawyer with exposure to Vietnam since 2007, I have observed the evolving dynamics between the United States and Vietnam through the years, talking to students, entrepreneurs, veterans, diplomats, humans from all walks all life, from both nations and beyond.

              You may recall that Vietnam, with the notable exclusion of China, was to be the nation that would encounter the most stringent tariffs imposed by the Trump administration, reaching an astonishing 46%.

              The newly forged framework outlines significant reciprocal concessions designed to foster greater trade and investment flows. Granted, pre-April 2 tariffs applied by the USA on Vietnamese goods were lower than what emerges from the framework agreement, but still, it is better than 46%),

              The United States has committed to imposing a 20% tariff on most Vietnamese imports, a notable reduction from the previously mooted 46%. However, a substantial 40% tariff will apply to goods re-exported from third countries, with a particular focus on those originating from China.

              Vietnam has pledged to open its market to a wide array of US products. Crucially, it has also committed to implementing stringent measures aimed at restricting the transshipment of Chinese goods through its territory, a long-standing concern for Washington.

              In a significant win for American exporters, US goods will now enjoy duty-free access to the Vietnamese market, effectively granting “total access”, particularly for large-engine vehicles such as SUVs, as emphatically stated by President Trump (how SUVs are going to circulate in the narrow alleys of Hanoi and Ho Chi Minh City, infested by swarms of mopeds, is a different story).

              This agreement is expected to catalyse growth in several key sectors. Electronics, textiles, furniture, energy (especially Liquefied Natural Gas), and agriculture are poised for expansion. US firms specialising in manufacturing technology, energy solutions, and agricultural products are anticipated to be the primary beneficiaries. Furthermore, beyond immediate trade benefits, the agreement is set to reshape investment strategies, encouraging a greater localisation of supply chains within Vietnam. This strategic realignment is also expected to further solidify the already robust US-Vietnam Comprehensive Strategic Partnership.

              While the potential upsides are considerable, it is imperative for businesses and investors to approach this new landscape with a clear understanding of the accompanying risks. From my vantage point, I identify several significant execution challenges and structural impediments that require close monitoring.

              Enforcement of Transshipment Controls

              The most immediate and perhaps formidable risk lies in the effective enforcement of transshipment controls. Vietnam has historically served as a significant assembly point for Chinese-manufactured components. Ensuring that goods originating from China are not merely re-routed through Vietnam to circumvent US tariffs will require exceptionally close monitoring and robust verification mechanisms. The legal and practical complexities of definitively determining the true country of origin for all goods will undoubtedly pose a persistent challenge. As a European citizen, witnessing how the EU-Vietnam Free Trade Agreement (“EVFTA”), which poses an important stress on certificates of origin, I am particularly aware of this matter.

              While Vietnam has made remarkable strides in its economic development, certain structural issues could hinder its capacity to scale up high-value manufacturing in the short to medium term. These include:

              Legal framework nuances

              Vietnam’s legal framework for foreign investment has seen continuous improvements, but legal and cultural complexities and inconsistencies can and do still arise. Navigating the regulatory landscape, particularly with new rules stemming from this agreement and at a time of deep administrative, governmental, digital and legal reforms in Vietnam, will demand expert legal guidance to ensure compliance and mitigate potential fines and disputes. Issues surrounding so-called sublicences for businesses, intellectual property rights enforcement and contract enforceability, whilst improving, still require careful consideration;

              Education

              The ambition to transform Vietnam into a high-value manufacturing hub necessitates a workforce equipped with advanced skills. While the Vietnamese government prioritises education and workforce development, a significant portion of the current labour force lacks formal training and specialised certifications, let alone a good command of the English language. Bridging this skills gap, particularly in areas like advanced manufacturing, engineering, and digital technologies is a necessity and not just in light of this framework agreement. Companies may need to factor in substantial investment in training and upskilling programmes for their Vietnamese employees.

              Infrastructures

              Despite considerable investment, Vietnam’s infrastructure, particularly in logistics, energy, and transportation, continues to face bottlenecks. And China – the apparent target of Trump’s tariffs – is stepping in with high-speed trains connecting it to the northern Provinces of Vietnam. An increased volume of high-value manufacturing and trade will place further strain on existing infrastructure. Inadequate port capacity, congested roads, and a reliable energy supply (including for EV charging) are critical concerns that could impact efficiency and increase operational costs for businesses.

              Policy divergence

              This framework agreement deepens US-Vietnam trade ties and seems to be paving the way for more US investments in Vietnam, but this second aspect seems to run counter to parallel US policy objectives aimed at reshoring manufacturing back to the United States. This potential divergence in strategic priorities could introduce yet another element of unpredictability in the long term, necessitating a flexible and adaptable investment approach. Future shifts in US policy could impact the durability and full extent of the benefits derived from this agreement.

              This trade agreement, if finalised and implemented, undoubtedly represents a structural shift in global trade dynamics. It strategically positions Vietnam as an increasingly important high-value manufacturing hub and significantly deepens US engagement in Southeast Asia. We will need time, however, to assess the practical impact of the agreement, observing the efficacy of its implementation, and understanding how Vietnam’s inherent strengths and challenges will ultimately shape its role in the reconfigured global supply chain.

              We will also need to see what China, if anything, will do as a countermeasure. In fact, any assessment of Vietnam’s evolving trade landscape would be incomplete without a thorough consideration of China’s influence and strategic posture. President Xi Jinping has consistently championed a vision of a “community of shared future for mankind,” a concept that, while outwardly promoting global cooperation, also subtly underscores a demand for international alignment with Beijing’s interests. In the context of escalating trade tensions, Xi has repeatedly warned that “trade wars have no winners,” advocating for unity against protectionist measures, yet simultaneously implying that nations must ultimately choose sides, either with or against China’s economic and political orbit. Vietnam, despite its historical complexities and occasional maritime disputes with Beijing in the South China Sea (or East Sea, as it is officially called by Hanoi), remains deeply interwoven with China’s economy. China has been Vietnam’s largest trading partner for many years, with significant inflows of Chinese FDI, loans, and project contractors. This economic dependency is particularly evident in various sectors, where Chinese components and materials form a substantial part of Vietnamese manufacturing supply chains. While Vietnam has actively sought to diversify its trade partners and reduce its reliance on China, the sheer scale of the bilateral economic relationship means that disentanglement is a long-term, complex endeavour. Furthermore, China’s influence extends beyond direct trade into crucial regional resources. The Mekong River, a lifeline for millions in Southeast Asia, originates in China, which has constructed numerous upstream dams.

              As Vietnam navigates its enhanced trade relationship with the United States, it must simultaneously contend with the enduring economic gravity and strategic ambitions of its northern giant neighbour. Any perceived move by Vietnam to significantly shift away from China could invite retaliatory measures or heightened pressure from Beijing. Businesses investing in Vietnam must not only grasp the intricacies of the US-Vietnam agreement but also meticulously analyse how these developments will intersect with, and potentially be impacted by, the intricate, often delicate, and sometimes fraught relationship between Hanoi and Beijing. Understanding this geopolitical tightrope will be essential for sustainable success in the Vietnamese market. Prudence, informed legal counsel, and a keen eye on evolving geopolitical and economic realities will be paramount for those seeking to capitalise on this transformative new chapter.

              Takeaways

              • Tariffs:The US-Vietnam framework agreement marks a significant departure from previous trade dynamics, reducing US tariffs on most Vietnamese imports to 20% (from a mooted 46%) while imposing a 40% tariff on transshipped goods, especially from China.
              • Vietnam’s market opening:Vietnam has committed to duty-free access for a broad range of US products and stricter controls on Chinese goods transiting its territory.
              • Growth / manufacturing shift potential:The agreement is expected to fuel expansion in Vietnamese electronics, textiles, furniture, energy (LNG), and agriculture. It also encourages supply chain localisation within Vietnam (normally more of an assembly point for Chinese products).
              • Execution challenges: Effectively preventing the re-routing of Chinese goods through Vietnam to avoid tariffs will be a complex and demanding task; Despite economic progress, Vietnam faces hurdles in scaling high-value manufacturing due to legal framework nuances (e.g., sublicences, IP enforcement), a skills gap in its workforce (lack of formal training, English proficiency) and infrastructure bottlenecks (logistics, energy, transportation).
              • US policy divergence:The agreement’s encouragement of US investment in Vietnam appears to contradict the broader US policy objective of reshoring manufacturing.
              • China:Businesses must consider China’s significant economic sway over Vietnam, including its position as Vietnam’s largest trading partner, its FDI, and its control over shared resources like the Mekong River. Any major shift by Vietnam away from China could lead to retaliatory measures from Beijing.
              • Uncertainty:This is not a final agreement, so the situation might change. Prudence and informed legal counsel are crucial for businesses navigating this evolving landscape.

              Federico Vasoli

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                The importance of understanding the other side’s negotiating style

                13 de julio de 2025

                • Italia
                • EEUU
                • Contratos de distribución
                • Derecho Fiscal y Tributario

                Executive Summary

                The African Continental Free Trade Area (AfCFTA) remains one of the most ambitious integration projects in the world. Yet, several years into its operational phase, it has not (yet) delivered the structural shift many expected. A recent analysis underscores the gap between political momentum and economic reality: implementation remains uneven, the agreement is still used by only a portion of participating states, and non-tariff barriers and infrastructure deficits continue to dominate the cost of doing business across borders.  For Egypt, the opportunity is still real — but it depends less on treaty headlines and more on enabling conditions: trade logistics, customs efficiency, regulatory convergence, and competitive industrial capacity. 

                Looking Back: The Promise of a Single African Market

                When the AfCFTA was launched, expectations were understandably high. A continent-wide trade framework was supposed to reduce tariffs, facilitate trade in goods and services, and strengthen regional value chains — with the broader goal of moving African economies up the value ladder.

                In my 2022 article, I asked whether AfCFTA could become a game changer for Egypt, given Egypt’s industrial base, strategic geography, and the potential to diversify export markets beyond traditional partners. (For background, see the earlier article here”).

                The Reality Check: Intra-African Trade Remains Structurally Weak

                Several years later, the interim assessment is sobering. As the Frankfurter Allgemeine Zeitung (FAZ) recently put it, AfCFTA is not a “game changer” yet, and only about half of member states currently meet the practical prerequisites to trade under the agreement.

                A deeper reason is structural: no other world region trades so little with itself, and while statistics may undercount informal cross-border flows (especially in food), the overall picture remains unchanged.

                Trade integration cannot deliver transformative outcomes if production, logistics, and institutions do not support scale.

                Implementation Has Been Slow — and Often Symbolic

                Operationalisation did not start with full-scale liberalisation. Instead, the AfCFTA began with a pilot approach: the Guided Trade Initiative (GTI) launched in October 2022, initially with eight states, later joined by additional countries, including Nigeria and South Africa by spring 2025.

                The GTI created valuable learning effects, but it also underlined a key point: early progress was often presented through symbolic deals, while product coverage and volumes remained limited. FAZ highlights that only selected goods could be traded duty-free and that key sectors remained constrained for a long time due to missing or unresolved technical rules.

                A pilot, however, cannot substitute for full operational certainty — the kind businesses need to restructure supply chains and invest.

                Tariffs Are Not the Main Barrier — Trade Costs Are

                AfCFTA is frequently discussed in terms of tariff liberalisation. Yet, evidence suggests that the largest gains do not come from tariffs but from reducing non-tariff barriers and improving trade infrastructure.

                FAZ points to a central reality: tariffs tend to add around 20–30% to intra-African trade costs, whereas non-tariff costs can be far higher — driven by bureaucracy, lack of harmonised standards, inefficient border processes, and transport barriers.

                This is the crux: even with reduced tariffs, trade will not expand meaningfully if goods still cannot move cheaply, quickly, and predictably.

                Integration Complexity and Distributional Politics

                Africa’s integration landscape is shaped by multiple overlapping regional economic communities and trade regimes. This creates legal and administrative complexity — often described as an integration “spaghetti bowl.” FAZ notes the challenge of coordination and the continued fragmentation of rules.

                There is also a political economy dimension. Intra-African trade is heavily influenced by a small number of larger economies — and the distribution of benefits matters. FAZ highlights the dominance of major players (notably South Africa) and the concern that tariff liberalisation alone may entrench existing industrial advantages.

                Where governments expect asymmetric outcomes, resistance often takes the form of delay, narrow implementation, or persistent non-tariff barriers.

                What This Means for Egypt: The Opportunity Is Real — But Conditional

                Egypt’s strategic case for AfCFTA participation remains strong: industrial potential, geographic location, and the opportunity to access and shape growing markets. But the experience so far suggests that the treaty text alone does not generate trade flows.

                For Egypt’s private sector, the decisive factors are practical:

                • predictable and efficient customs clearance and border procedures,
                • logistics corridors and port efficiency,
                • regulatory convergence (standards, certification, compliance),
                • stable access to trade finance and payments,
                • competitive energy and production conditions for manufacturing and processing.

                AfCFTA can support these developments — but it cannot replace them.

                The “Game Changer” Pathway: What Must Happen Next

                FAZ concludes that AfCFTA will only become truly impactful if it is paired with the fundamentals: major infrastructure investment, stronger production and processing capacity, and a credible industrial policy.

                At the same time, Africa faces a classic chicken-and-egg problem: without development there is limited investment appeal; without investment there is limited development.

                For Egypt and its partners, a pragmatic strategy would be to:

                1. treat AfCFTA as a platform for real trade-cost reduction, not only tariff debates;
                2. focus on a limited number of scalable corridors and sectors where regional value chains can realistically grow;
                3. strengthen implementation capacity so that preferences become usable for firms — especially SMEs;
                4. enhance legal certainty and dispute resolution reliability for cross-border commerce.

                Conclusion

                AfCFTA remains a landmark achievement in terms of political commitment. But as of today, it has not yet been the “game changer” many hoped for.

                For Egypt, the key question is no longer whether AfCFTA is visionary — it is. The question is whether governments and businesses can translate it into lower real trade costs, higher competitiveness, and bankable cross-border transactions. If those enabling conditions improve, AfCFTA’s promise can still become commercial reality.

                After “Liberation Day,” many foreign companies offered discounts to American importers to help them offset the tariffs. A few months later, the US Supreme Court declared the «reciprocal» tariffs unlawful, but on the same day, President Trump announced new tariffs. In this article, we provide a practical overview of how to handle various scenarios, shifting from a reactive, unstructured approach to deliberate management of price volatility and trade flows caused by the introduction, adjustment, and removal of tariffs.

                Tariff Sharing agreements

                For a long time, the question has been straightforward: who absorbs the extra customs cost? The exporter? The importer? Both? The question remains important, but today it is incomplete.

                The new scenario, in light of the recent ruling by the US Court of Justice on March 20, 2026, is: what happens if that duty is then canceled and refunded? If the cost was shared between the parties, the benefit of the refund must follow a consistent logic. In the absence of a clear agreement on this point, however, there is a risk of economic misalignment that could compromise the commercial relationship.

                Let’s imagine an Italian winery that sells its products to a US importer. Following the introduction of reciprocal duties, the parties have decided that the exporter will grant an extraordinary discount of 7.5%, explicitly motivated by the need to share the impact of the duty. The commercial relationship continues, volumes remain stable, and the importer avoids passing on the entire increase to the end customer.

                As a result of the Supreme Court ruling (or, in the future, another ruling or administrative decision), the importer obtains a refund of the duties paid during that period.

                If no formal agreements have been made on this point and the documentation refers generically to a «commercial discount» and says nothing about reimbursement, the situation afterward may be difficult to reconstruct and, above all, could lead to commercial tension. As a result, a positive development (the cancellation of the duty and the right to reimbursement) becomes a problematic factor that jeopardizes the relationship.

                Is the exporter entitled to a refund of the discounts granted to mitigate the duties?

                In the absence of a different agreement between the parties, the right to reimbursement belongs to the party who paid the duty, i.e., in most cases, the importer. Therefore, there is a risk that the importer will enjoy a double benefit (the discount and the duty refund), while the exporter will get nothing.

                For this reason, it is essential that the parties do not limit themselves to negotiating prices and discounts, but also establish the consequences of the adoption, modification, or revocation of duties on the contract, including any refunds.

                To achieve this, the first step is to accurately classify and document the discounts granted. If only a «commercial discount» appears in emails, commercial orders, credit notes, and invoices, it will be harder to later argue that this discount was actually an extraordinary, temporary contribution related to the duty. Conversely, if the documentation and contract specify that it is a tariff sharing or tariff mitigation measure, identifying the amounts to be refunded after the fact becomes much simpler.

                The goal is to create a clear view of the trend in discounts and payments so that, if needed, financial flows can be adjusted to align with the original terms of the agreement: if the exporter has helped cover a cost that then, in whole or in part, does not end up materializing, they will be eligible for a refund of the contribution paid.

                The contract will therefore include, in addition to the Tariff Sharing clause, a Tariff Reimbursement Allocation clause, which states that if the importer receives a refund, credit, or any other economic benefit related to the duty for which the exporter has granted a discount, the importer must return the corresponding portion of the benefit to the exporter in full. or proportionally, depending on how the parties intend to distribute risk and incentive.

                Importer’s responsibility to seek reimbursement

                It is unclear whether, in the case of US reciprocal duties, importers can simply file an administrative claim to get a refund or if legal action will be required. The latter seems more probable.

                Generally, obtaining a duty refund involves action, deadlines, documentation, and coordination with brokers and customs consultants. In most cases, the entity controlling the process is the importer (or someone acting on their behalf).

                This raises a sensitive but very real issue: if the importer knows that they will have to invest time and money to obtain a refund, only to then have to share the benefit with the exporter, their incentive to take action may be reduced. To prevent this inertia  the contract should contain an express obligation to take action, set out as a duty of best efforts or commercially reasonable efforts.

                For example, the contract should specify that the importer must inquire about the conditions and time limits of the process, keep relevant documentation, regularly inform the exporter about the progress of the initiatives, and not unilaterally waive or reduce the claim if it affects the exporter’s economic rights.

                Preventive Agreements on Litigation and Cost Allocation

                When reimbursement involves a lawsuit or structured legal action, the obstacles are organizational and financial: who decides if and when to proceed, who selects the lawyers, who pays the costs upfront, how the net recovery is divided, and who has the final say on a settlement. This generally applies to all contracts, not just this case: dispute resolution methods must be addressed and agreed upon before the problem arises.

                Otherwise, the dispute resolution process risks becoming a secondary improvised negotiation at the worst time — when the parties are already under pressure from margins, cash flow, and regulatory uncertainty. As a result, it becomes much harder to reach an agreement.

                How to handle new tariffs and their potential cancellation

                To safeguard against uncertainty, the agreement should be organized into two stages.

                • The first stage regulates the immediate impact of the change in scenario, for example, the introduction of a new tariff or its increase (renegotiation, cost sharing, automatic adjustment : I discussed this in this article).
                • The second stage manages the possible «rollback» (right to reimbursement, process, allocation criteria).

                This approach has a clear benefit: it does not force the parties to discuss every time the tariff regime changes or a decision to cancel tariffs is made. Instead of reacting to market changes, a tool is adopted to manage potential scenarios, which is much more resilient commercially and easier to oversee, as the rules have already been agreed upon.

                This allows the impact of duties to be regulated not as an extraordinary variable, to be agreed upon on a one-time basis, but as a structural, adaptable phenomenon that could last a long time.

                This is why it is crucial to know how to draft contracts that cover both the current situation and potential changes, including any refunds.

                Conclusion: Three practical steps for companies exporting to the US

                The first is to agree on the consequences for the contract of the introduction of a new duty, increasing it, or revoking it (renegotiation, cost sharing, automatic price adjustment, right to share the refund).

                The second is to clearly document any discount granted to offset a duty. If it remains a generic «commercial discount,» the right to a refund if reimbursement occurs will be much harder to enforce.

                The third step is to determine what happens if the duty is canceled or revoked: the importer’s responsibility to take action to get a refund, manage the administrative process or litigation, how to divide costs, who oversees the activities of consultants and lawyers, and how the recovered funds will be allocated.

                How do you approach negotiating a trade agreement with China?

                Based on my experience, let’s examine the issues to be addressed and the main questions to ask, taking the negotiation of a trade distribution agreement as a practical example.

                Let’s start with the first issue that is important to clarify.

                Nice Business Card – But Who Is This Guy?

                Business cards, websites, printed or digital brochures, presentations, and any other materials shared in English have no official value in China.

                The company name of the counterparty and the first and last names of people representing it or acting on its behalf, written in English, are only fictitious names.

                To be certain of the company’s data and the identity of the persons, it is necessary to ask for the information in Chinese, with particular reference to the company’s business license (equivalent to the Companies House or Chamber of Commerce’s excerpt), from which the name, corporate purpose, registered and paid-up share capital, and the name of the legal representative can be inferred.

                The data can then be verified by accessing the portal of the State Administration of Industry and Commerce (SAIC) of the province where the Chinese party is based.

                This first verification is essential to ensure that you do not waste time or even run into scams (here’s an in-depth article on Legalmondo’s blog).

                If You Don’t Own Your Trademark, Someone Else Will – and Charge You for It

                Trademark First, Trade Later. China operates on a first-to-file system for trademarks, which means that the first person or company to register a trademark – not necessarily the original creator or most famous user – gains the legal rights to it. This creates a serious risk: if you haven’t registered your trademark in China, someone else might do it before you, and then either use it freely or demand a hefty ransom to give it back. Even high-profile figures like Elon Musk and Michael Jordan have been entangled in costly and protracted disputes with Chinese trademark squatters. In many cases, getting the mark back is highly complicated, and sometimes legally impossible.

                To avoid this, register your trademarks early, even before entering the Chinese market. File directly with the China Trademark Office (CTMO) and don’t stop at the English version — consider registering a Chinese character version as well, since that is how your brand will often be known locally.

                Once that base is covered, clearly state in your contract that your Chinese partner is not allowed to file a registration of any of your trademarks in China, in Latin or Chinese characters, and that he will use trademarks and IP rights in strict conformance to the contract and your instructions.

                For a deeper dive into how to effectively protect your IP rights in China, check out our detailed article on the Legalmondo blog.

                Contracts can wait. First, get on the same page

                When negotiating with a Chinese partner, it’s often a mistake to begin the conversation by exchanging contract drafts. Instead, focus first on the substance — the relationship’s commercial and technical terms. Using a clear checklist of key discussion points (such as products, pricing, delivery terms, technical standards, after-sales support, exclusivity, duration, payment terms, etc.) helps ensure that both sides are aligned on what really matters. Take detailed notes and keep minutes of the discussions, especially where and when consensus is reached, and make sure those minutes are circulated and expressly agreed upon. Once substantial agreement has been achieved on the main terms, this memo can then be handed over to your lawyer, who will translate the business understanding into clear and coherent contractual language. This approach saves tons of time, as it helps avoid unnecessary back-and-forth on legal language before the core deal is in place.

                Think Your NDA Covers You in China? Think Again

                Yes, they are—and often underestimated. A well-drafted Non-Disclosure Agreement (NDA) is essential when the parties plan to exchange confidential information, such as technological know-how, commercial strategies, supplier data, or client lists. Especially in the early phases of negotiation or cooperation, before a main contract is signed, an NDA helps protect intellectual and business assets.

                However, as with all contracts in China, a generic NDA template copied from other jurisdictions will likely be of limited use. To be truly effective, the NDA must be adapted to the specifics of the Chinese legal environment. This includes ensuring that it is enforceable in China: the NDA should include the proper dispute resolution mechanism (see below on why you should consider applying Chinese law and litigating in China), and it must specify clear, valid, and proportionate penalties for breach. In Chinese practice, stating specific contractual penalties (liquidated damages) is often more effective than vague references to compensation, as courts and arbitrators in China tend to enforce these more reliably if they are reasonable.

                While a good NDA is useful, it often falls short in China’s manufacturing and sourcing landscape. This is where the NNN Agreement – standing for Non-Disclosure, Non-Use, and Non-Circumvention – becomes critical. Unlike standard NDAs that primarily focus on confidentiality, an NNN Agreement is designed to address the unique risks of doing business in China. It prevents the recipient from not only disclosing confidential information but also from using it for their benefit or bypassing the disclosing party to work directly with suppliers, clients, or partners. Which, in China, is a very real risk.

                This broader scope is vital when dealing with Chinese manufacturers or intermediaries, who may otherwise be tempted to replicate products or contact customers directly or through third parties. As seen with the NDA, also the NNN Agreement must be drafted in Chinese, governed by Chinese law, and enforceable in Chinese courts -otherwise, it may offer little real protection.

                Joint venture? Easy, Cowboy

                A joint venture is often the first proposal that comes up when negotiating with a potential Chinese partner. It seems appealing: sharing risks and investments, accessing the local market with an ally, leveraging their knowledge and network of contacts. But the reality is often very different from what it appears to be.

                A joint venture is a complex, expensive, and rigid corporate structure that requires significant investments of money, time, and human resources, as well as the ability to continuously manage often divergent interests among the partners. The vast majority of Sino-Foreign JVs have gone wrong, or will go wrong. Or very wrong. First and foremost, because the JV is usually managed by the Chinese partner, and exercising effective control over the company’s operations is a very challenging undertaking.

                Before going down this road, it is essential to ask yourself a few questions: Is the joint venture really indispensable for developing this business in China? (Spoiler: generally, no). Are there less restrictive and risky alternatives, such as a distribution agreement or a licensing agreement? (Yes, almost always). And above all: how well do we really know our potential partner?

                A joint venture should only be considered if it is strictly necessary for the project’s development, after carefully verifying the commercial viability and the reliability of the Chinese partner, and ensuring the ability to maintain effective control over the JV’s operations.

                It is better to start with simpler and more flexible forms of collaboration to test the market and the relationship with the other party before committing to such a demanding investment. Otherwise, the mirage of the joint venture risks turning into a nightmare that can be very costly.

                Memorandum of Understanding: Where Good Intentions Become Bad Contracts

                A Memorandum of Understanding (MoU) is a helpful tool at the early stage of a commercial relationship. It serves as a roadmap for future negotiations, where the parties outline the main principles and intentions that will guide the drafting of the final agreements. When used correctly, an MoU can significantly facilitate negotiations by ensuring that both sides commit to negotiating the agreement in good faith and share a common understanding of key points such as pricing models, territorial scope, exclusivity, milestones, budget, or performance expectations.

                However, an MoU must be used for what it is: a preparatory document, not a binding contract. Care must be taken to avoid ambiguity and unintended commitments. The text should clearly specify that the parties remain free to conclude – or not – the final agreements and which clauses are non-binding – such as the commercial framework or indicative timelines – and which provisions are binding, typically confidentiality, exclusivity during the negotiations (if agreed), governing law, and dispute resolution. A poorly drafted MoU, which includes overly precise and complete terms, can be misinterpreted as a final agreement, creating unnecessary legal risk. So yes, MoUs are valuable – but only when used correctly. If you’d like to know more, go deeper by reading this article.

                Bad Drafts, Big Headaches, Poor results

                Draft agreements used in China are often copied and pasted from incomplete, superficial, poorly organised templates written in bad English, which often do not match the Chinese version of the contract.

                Correcting and integrating these drafts is complicated and more time-consuming than starting from a good template, with suboptimal results.

                It would be better to propose a consistently constructed text and ask the other party to propose any changes and additions to this draft.

                Your Western Contract Template Won’t Work Here

                Even if an English-language contract is perfectly valid, there are many reasons why using contract templates built for other countries in the Chinese market is inadvisable.

                The first is the fact that Anglo-Saxon-based agreements, such as those for the U.S., refer to a common law system (which is based on judicial decisions and case law precedents) that is very different from that of civil law countries (such as China and Italy), which derives from the Roman legal tradition, based on a codified set of written laws.

                It follows that the layout of an agreement on the Anglo-Saxon model is different, much more detailed, and wordy than that of a typical agreement based on a civil law system. Since contract negotiations in China are generally lengthy and complex, working on redundant and complicated text at the outset does not help.

                If we stick to the example of a distribution contract, it should be added that it is advisable to apply Chinese law to provide for arbitration based in China (e.g., at CIETAC) or in Hong Kong or Singapore (third countries, where, however, the costs of the procedure increase significantly) as the mode of dispute resolution. So, the contract should be built on a model that conforms to the law that will apply to the relationship.

                Home Court Advantage Won’t Help You in China. In fact, quite the opposite

                This is a typical point of disagreement in the negotiation of an international contract: the parties aim to have the law of their own country apply, and to stipulate that any disputes be adjudicated by their domestic courts.

                In our case, insisting on the application of Italian (or any other foreign) law and state court is not a good idea: it should be considered, in fact, that a distribution agreement is carried out, for the vast majority, in the country where the distributor operates and where the products are sold (in our case, in mainland China).

                In disputes, the parties’ (particularly the manufacturer’s) interest is to obtain a quick decision by the adjudicating body, especially if situations requiring immediate protection (such as unfair conduct or counterfeiting of trademarks and patents by the distributor) are ongoing.

                None of this is possible if one goes to an Italian judge (with lengthy litigation time and the need then for a complex and costly process to recognise and enforce the decision in China); on the contrary,  an arbitration in China, applying Chinese law, allows one to reach a decision quickly (on average 6-9 months) and, if necessary, also to obtain urgent measures to stop any unfair conduct.

                Chinese Law Isn’t a Black Box (If You Know What You’re Doing)

                The lawyer assisting you should know it.

                Therefore, it is not a leap in the dark, and one should not fear surprises.

                In addition, it should be remembered that an agreement is primarily based on the covenants that the parties have written in the contract; therefore, if the contract has been well drafted, the rules to be applied are clear.

                Finally, if we consider distribution agreements, keep in mind that they are a framework contract, within which a series of separate product sales contracts are concluded. If both countries are contracting parties to the 1980 Vienna Convention on the International Sale of Goods (CISG), then the uniform, clear, and balanced rules of the convention apply automatically, just don’t opt out!

                One Contract, Two Languages

                The contract is also valid in English only.  However, it is undoubtedly advisable to draft a Chinese version with facing text.

                This is for several reasons: first, it prevents the Chinese party from having to arrange for a translation of the text during negotiations for its own internal use (top managers often do not speak English), thus slowing down the various steps of negotiations.

                Also, to ensure that the Chinese side fully understands the agreement’s content and to avert misunderstandings (real or instrumental) about the interpretation of certain covenants.

                Finally, it should be borne in mind that if the contract were later to be used before a court or administrative authority in China, the only language admitted would be Chinese; for this reason, it is better to have already a text agreed and signed by the parties in Chinese as well, rather than having to prepare a unilateral translation later.

                Sign. And chop

                Does the contract need to bear the company’s official stamp? Yes, and this point is absolutely crucial. In China, a company’s official «chop» (the red-ink stamp) is equivalent to a signature and is conclusive proof that the person signing the contract has the authority to represent the company. A signature alone, even from someone with an important-sounding title, may not be sufficient if it is not accompanied by the official chop. Without it, the contract might later be challenged or even considered void. Before signing, always verify that the stamp used matches the one registered with the company’s business license or official corporate records, and ensure that the stamp is applied on every page or at least on the signature page, in line with local practice.

                Don’t Let Your Contract Collect Dust

                Things change fast, especially in China. New products are added, market conditions evolve, people leave the company, new competitors emerge on the horizon, and so on. Companies constantly adapt to the new conditions, and so must the contract.

                Any change in the relationship should be formalized correctly. To avoid misunderstandings and disputes, it’s advisable to include an integration clause in the contract, specifying that any amendments or additions will only be valid if agreed in writing, signed by the parties’ authorized representatives, and annexed as an addendum to the original agreement.

                It’s not enough to include this clause – you must follow it consistently. If things change, agreements reached verbally, through Wechat messages, and through email exchanges may make things complicated if they are not formalised adequately according to the procedure set out in the original contract.

                If you’d like to go deeper, check out this article.

                Son bastante frecuentes las relaciones comerciales con agentes o distribuidores que duran años y sin ningún documento firmado. Y, cuidado, porque ya sabemos que un contrato puede existir incluso verbalmente.

                La inexistencia de un contrato escrito va a añadir dificultades en una posible reclamación, por eso, lo que se haga entre la decisión de ponerle fin y el momento de la reclamación es muy importante. Recuerda: “cualquier cosa que escribas será usada en tu contra”.

                La decisión de terminar una relación comercial es un momento muy delicado al que, no sé por qué, a los abogados no se nos invita. Os doy algunos ejemplos (todos reales) en los que las empresas o algún empleado con la mejor voluntad escribió al agente/distribuidor. Todos fueron luego muy perjudiciales para la empresa:

                 

                Decir “Ponemos fin a nuestra relación comercial” cuando la estrategia será defender que dicha relación comercial no existe, sino que son contratos independientes y encadenados (por ejemplo, suministro en lugar de contrato continuado de distribución; consecuencias de indemnización muy relevantes).

                “Usted ya no representa a nuestra sociedad”, lo que puede ser una prueba de que antes sí lo hacía.

                “A partir del día X usted ya no puede actuar en nombre de nuestra sociedad” que probaría que antes sí podía actuar en su nombre.

                “Usted no puede asistir a la feria de X en nuestro nombre”. Una forma de confirmar que entre las competencias del agente/distribuidor estaba participar en ferias y probablemente acredita los clientes obtenidos.

                “Las ventas promovidas por Ud. se han visto reducidas significativamente en el año N”. Cuando no hay contrato escrito ni otra forma de documentarlo, imputar un incumplimiento de una obligación que no está clara, puede ser contraproducente.

                Decir “No estás llevando a cabo una promoción activa de nuestros productos” para añadir a continuación: “le instamos a que deje de promocionar la venta de nuestros productos”.

                “Usted deja de ser nuestro representante exclusivo”, lo que prueba un tipo de relación (representación/agente) y un acuerdo tácito o expreso (“exclusividad”)

                “Hemos designado a otro representante en su zona”, que demuestra que el agente/distribuidor tenía una zona asignada y “representaba”.

                “A partir de este momento los pedidos serán asumidos por X” que, igualmente confirma un tipo de relación.

                En resumen: a partir del momento en el que la empresa valora poner fin a una relación comercial, sobre todo cuando no está escrita y antes de enviar cualquier carta, es conveniente pensar bien en la estrategia de cara a una posible reclamación. Es el momento más adecuado para asesorarse y evitar sorpresas. Cualquier comunicación que no esté alineada con esa estrategia diseñada desde el principio solo podrá aportar confusión y problemas.

                Remember the USA – EU agreement on 15% tariffs? I wrote that with a negotiator like Trump the game is never over (article here) and—after the recent interlude featuring a threat of 100% tariffs on pharmaceuticals—the U.S. government has announced the imposition of an overall 107% duty on Italian pasta, which could take effect on January 1, 2026.

                Where this new duty comes from

                The antidumping investigation was launched by the U.S. Department of Commerce at the request of certain competing American companies and is based on a 1996 antidumping order that allows for periodic reviews of imports of Italian pasta. The Department of Commerce conducts these checks annually to assess whether Italian producers are selling pasta at prices lower than the U.S. domestic market, a practice known as “dumping.”

                Companies involved in the investigation

                The Department of Commerce selected two sample companies for in-depth analysis, defined as “mandatory respondents”: La Molisana and Pastificio Lucio Garofalo. According to the official document published by the U.S. administration, for the period from July 1, 2023 to June 30, 2024, both companies allegedly sold their products below market prices, resulting in the imposition of a duty of 91.74%.

                U.S. authorities justified this percentage by claiming the two companies did not provide complete or compliant information as requested by the Department and were therefore insufficiently cooperative during the investigation. What is very important is that, in addition to the two companies directly examined, the additional 91.74% duty is also applied to numerous other Italian producers not individually reviewed. This methodology, while formally permitted under U.S. law as an exception, is being applied without any direct verification of the other companies.

                Next steps in the procedure

                Italy’s Ministry of Foreign Affairs moved immediately, formally intervening in the proceeding as an “interested party” through the Italian Embassy in Washington. The Foreign Ministry is working in close coordination with the companies concerned and, in concert with the European Commission, to persuade the U.S. Department to revise the provisional duties.

                The two companies involved (La Molisana and Garofalo) can submit documentation to contest the dumping allegations. However, if dumping is confirmed, the Department of Commerce will instruct Customs to apply antidumping duties on goods sold and entered into U.S. commerce.

                The preliminary nature of this determination means there is still room to change the decision before it becomes final.

                Possible effective date

                The new super-duty of 91.74%, which will be added to the existing 15% tariff for a total of 107%, is scheduled to take effect on January 1, 2026. This date therefore represents a crucial deadline for all ongoing diplomatic and legal actions.

                If confirmed, the economic impact would be significant: in 2024, Italian pasta exports to the United States reached a value of €671 million according to Coldiretti, accounting for nearly 17% of the sector’s total exports. A 107% duty would risk seriously undermining competitiveness in one of the most important markets for Italian agri-food products.

                 What to do between now and January 1, 2026?

                At this stage, the entry into force of the new duty depends on the outcome of the ongoing procedure: given what has happened in recent months, and the political use the U.S. administration has made of tariffs—well beyond their technical function—it is reasonable to be pessimistic.

                So, what to do? In recent months we have seen companies react to the uncertainty over the fate of the tariffs in three ways:

                • Some rushed to ship as many products as possible before the potential effective date of the duty;
                • Some granted—upfront—discounts equivalent to the threatened duty, in case it came into force;
                • Some suspended orders, pending definitive news on the impact of the duties.

                These are all  valid options, but other effective tools for managing the uncertainty caused by the flurry of announcements, negotiations, and threats from the U.S. administration should not be forgotten: the risk of new duties being introduced, or existing ones being increased, can be managed in the contract by agreeing with the U.S. importer how any tariff change will affect the product.

                The parties can stipulate, for example, that the increase will be split equally; or that the importer will bear it beyond a certain threshold; or that if the duty exceeds a certain level, the contracts may be terminated. You can find a deeper dive in this article.

                The only certainty is that trade relations with the U.S. will stay unpredictable for a long time, and it’s vital to carefully manage the risk factors involved in selling products there. Right now, the focus is on tariffs and prices, and I encourage you to take this chance to thoroughly review existing agreements and assess whether—and how—other important points are addressed that could entail significant liabilities: we discuss them, very practically, in this book.

                On 29 June 2025, the Vietnamese government introduced Decree No. 163/2025/ND-CP (Decree 163). This decree provides detailed guidance on how the updated Law on Pharmacy will be implemented.

                Like the amended Law on Pharmacy, Decree 163 came into effect on 1 July 2025, replacing the previous Decree No. 54/2017/ND-CP (Decree 54). The new decree sets out comprehensive rules for key aspects of managing pharmaceuticals, including:

                • Pharmacy practice certificates
                • Certificates allowing pharmaceutical businesses to operate
                • Import and export of medicines and drug ingredients
                • Good Manufacturing Practice (GMP) inspections of overseas manufacturers
                • Recalling medicines and drug ingredients
                • Certificates for medicine advertising content
                • Medicine price management

                Key Changes in Decree 163

                Here are some important changes and additions introduced by Decree 163:

                Destroying Specially Controlled Medicines

                You no longer need to get approval from the relevant authority before destroying narcotic, psychotropic, and precursor drugs, or pharmaceutical ingredients that are narcotic or psychotropic substances or precursors used in medicines. Instead, you just need to provide notification at least seven working days in advance. This notification must include the planned destruction date and a detailed list of items to be destroyed.

                E-commerce in Pharmaceutical

                Pharmaceutical businesses that sell products online must openly display the following information to ensure transparency and consumer safety:

                • Their certificate allowing them to operate as a pharmaceutical business.
                • The pharmacy practice certificate of the person responsible for pharmaceutical expertise.
                • Information about the medicines themselves.

                Shelf-Life Rules for Imported Products

                For medicines and ingredients with a total shelf life of nine months or less, at least one-third of their shelf life must remain when they clear customs. Medicines with a shelf life of 30 days or less must still be within their shelf life at the time of customs clearance.

                Controlling Imported Products

                All medicines with marketing authorisation (MA) are subject to import control, except for:

                • Medicines needed for preventing and treating Group A infectious diseases that have been declared epidemics, as per the Law on Prevention and Control of Infectious Diseases.
                • Medicines with a shelf life of less than 30 days.

                Importers must inform the provincial People’s Committee at least five working days before making a customs declaration. The People’s Committee can then issue a written notice of non-compliance to the customs authority within five working days of receiving this notification.

                Medicine Advertising

                Decree 163 adds a process that allows an approved medicine advertising certificate to be adjusted for certain changes (such as a change to the MA holder or manufacturer information). This means you don’t have to go through the entire initial registration process for medicine advertising content again, as was required under the previous rules.

                Medicine Price Management

                Businesses must announce or re-announce wholesale prices, similar to the medicine price declaration process under Decree 54. Some medicines are exempt from this requirement, including those provided free of charge for emergency responses, national health programmes, humanitarian aid, clinical trials, scientific research, or exhibition purposes, and medicines carried as personal luggage.

                The Ministry of Health (MOH) can make recommendations if the announced or re-announced price is significantly higher than similar medicines already on the market. This includes situations where:

                • The announced or re-announced wholesale price of the medicine is higher than the highest price of similar medicines.
                • The price difference is more than 35% (for medicines priced under VND 1 million) or 15% (for medicines priced at VND 1 million and above) compared to winning bid prices in tenders.
                • The announced or re-announced price is higher than prices in the country of origin or other markets (if there’s no similar product in Vietnam).
                • When such differences are found, the MOH issues a formal recommendation to the announcing business and publishes it online for transparency and accountability.

                Further Guidance in New Circular

                On 1 July 2025, the MOH issued Circular No. 31/2025/TT-BYT (Circular 31), which further details how the amended Law on Pharmacy and Decree 163 should be implemented. Circular 31 officially replaces Circular No. 07/2018/TT-BYT and Decree 54 and came into effect immediately.

                Key provisions of Circular 31 include:

                Notification of Practising Pharmacists

                Pharmaceutical businesses that are not part of a pharmacy chain must inform the relevant authority of a list of people currently working at the business who hold pharmacy practice certificates. This notification must be submitted within 15 days of the date the certificate allowing the pharmaceutical business to operate was issued, or when there are any changes to the list. This is a shorter deadline than the previous 30 days under earlier rules.

                Pharmacy chains have similar notification duties and deadlines. Specifically, the chain operator must inform the provincial authority where each pharmacy in the chain is located about the list of practising pharmacists at those sites. Additionally, pharmacy chains must notify the authority if pharmacies are added or removed from the chain, and if there are any rotations of the people responsible for pharmaceutical expertise between pharmacies within the chain.

                Medicine Information Activities

                Under Circular 31, medicine information can still be given to healthcare professionals through information materials, seminars, and medical representatives.

                However, Circular 31 introduces a significant change by removing the need to obtain a certificate for medicine information content before carrying out these activities. Under the new rules, pharmaceutical businesses, representative offices of foreign pharmaceutical companies in Vietnam, and MA holders are now responsible for creating and distributing medicine information materials. These materials must comply with the package inserts for medicines approved by the MOH, the Vietnamese National Drug Formulary, and any related documents and professional instructions issued or recognised by the MOH.

                Donald Trump, never one to shy away from drama or diplomacy-via-caps-lock, has slapped a 50% tariff on all Brazilian exports to the United States. The justification? In his own delicate prose: «The treatment of former President Jair Bolsonaro is a disgrace… A witch hunt that must end IMMEDIATELY!»

                And just in case anyone thought this was about trade imbalances or economic strategy, Trump made things crystal clear: «Due to Brazil’s insidious attacks on free elections…».

                In short, the 50% tariff isn’t about coffee, orange juice, or flip-flops. It’s about a Supreme Court judgment, applying Brazilian law, regarding Brazilian politicians accused of conspiring in a coup d’état. In other words, this is a brazen (and frankly absurd) attempt at judicial intervention via trade war.

                Trump, with his characteristic subtlety, offered a solution: manufacture in the U.S., and he’ll look kindly upon Brazil, like a mafia don offering «protection» after smashing your shop window. But what he meant was: consider Bolsonaro innocent, and we’ll talk.

                The Brazilian market took the bait

                Although the fishy interference in Brazilian affairs was determined from a fish out of the water, the market took the bait: in the first 48 hours after the infamous letter, at least 1500 tons of fish were already held in Brazilian ports, as US buyers suspended their contracts due to uncertainty about the costs upon arrival. The fish market is on alert, as 80% of the exports head to the US, mainly coming from small family-owned industries that distribute the catch from artisanal fishing communities.

                The same effect hit other sectors, from orange, honey, and coffee to aircraft.

                Brazil’s response and sorcery: don’t mess with us (or our weather)

                Naturally, Brazil will not sit quietly sipping caipirinhas while its sovereignty is trampled. Reciprocity is on the table: if Washington raises tariffs, Brasília can do the same. But above all, one thing is sure: Brazil will never tolerate foreign interference in its independent judiciary.

                And then, a curious coincidence: right after Trump’s speech, a tornado accompanied by lightning struck the White House grounds. Pure chance? Maybe. Or could it have been the work of Brazilian indigenous shamans, a particularly well-organized group of umbanda practitioners, or simply the fact that, as every Brazilian child knows, God is Brazilian.

                Trump might want to check the weather forecast next time before penning another angry letter.

                The unpredictable becoming predictable

                Trade wars are rarely tidy affairs, but one thing they consistently deliver is chaos (in legal terms, disruption). And when disruption meets contracts, force majeure disputes often end up in court.

                At first glance, Trump’s decision to impose a 50% tariff overnight might feel like an unpredictable thunderbolt (quite literally, given the weather at the White House). But here’s the catch: by now, unpredictable tariffs are becoming predictable. When a government with a well-documented love for impulsive economic diplomacy imposes politically motivated tariffs, can anyone claim to be surprised?

                In most jurisdictions, force majeure requires that the event be extraordinary, unforeseeable, and beyond the parties’ control. A sudden 50% tariff certainly ticks a few of those boxes, but following a repetition of erratic trade policy, one might argue that businesses should expect what in past times was considered unexpected, especially when dealing with certain jurisdictions or political figures. In other words, Trump’s tariffs might not excuse performance if parties didn’t prepare for exactly this kind of volatility.

                This is where good contract drafting comes into play

                Savvy businesses are learning that their contracts must go beyond a vague boilerplate clause about “acts of government” or “changes in law.” Instead, they should expressly address the risk of sudden tariff changes, including

                • hardship clauses that allow renegotiation when costs become commercially unreasonable;
                • price adjustment mechanisms linked to tariff thresholds;
                • termination rights triggered by specified levels of customs duties;
                • currency fluctuation provisions (because tariffs rarely travel alone, and currency swings often accompany them).

                In short, while no contract can immunize a business from every shock, smart drafting can mean the difference between a commercial headache and a catastrophic breach.

                Therefore, tariffs may no longer be an unpredictable storm; they are part of the new predictable landscape. Given that your contract might wake up tomorrow facing ‘IMMEDIATE’ punitive tariffs in all caps, your contract should be ready today.

                The unwitting cupid: strengthening EU-Brazil relations

                While the tariffs may ruffle trade flows between Brasília and Washington, there’s an unintended silver lining: Trump is proving to be the most efficient matchmaker between Brazil and other markets, such as China and the European Union.

                The EU-Brazil relationship, already a flirtation with promising prospects, with relevant progress in the EU-Mercosur Agreement, now seems destined for deeper romance. If Mr. Trump insists on isolating the US from Brazil, the old continent stands ready, with flowers and wine in hand, to pick up where the US left off. After all, Brazilian fish can pair up nicely with champagne, cava and prosecco.

                So thank you, Mr. Trump. In your quest to bully Brazil into submission, you may have done more to strengthen transatlantic ties than any EU Commissioner ever could. As they say in Brasília these days: Trump is not a trade warrior. He’s a cupid in disguise.

                The recent announcement of a landmark trade agreement framework, following just three months negotiations since President Trump’s tariffs announcement on 2 April 2025, signals a pivotal shift, not merely in bilateral relations, but in the broader architecture of global supply chains.

                As a commercial lawyer with exposure to Vietnam since 2007, I have observed the evolving dynamics between the United States and Vietnam through the years, talking to students, entrepreneurs, veterans, diplomats, humans from all walks all life, from both nations and beyond.

                You may recall that Vietnam, with the notable exclusion of China, was to be the nation that would encounter the most stringent tariffs imposed by the Trump administration, reaching an astonishing 46%.

                The newly forged framework outlines significant reciprocal concessions designed to foster greater trade and investment flows. Granted, pre-April 2 tariffs applied by the USA on Vietnamese goods were lower than what emerges from the framework agreement, but still, it is better than 46%),

                The United States has committed to imposing a 20% tariff on most Vietnamese imports, a notable reduction from the previously mooted 46%. However, a substantial 40% tariff will apply to goods re-exported from third countries, with a particular focus on those originating from China.

                Vietnam has pledged to open its market to a wide array of US products. Crucially, it has also committed to implementing stringent measures aimed at restricting the transshipment of Chinese goods through its territory, a long-standing concern for Washington.

                In a significant win for American exporters, US goods will now enjoy duty-free access to the Vietnamese market, effectively granting “total access”, particularly for large-engine vehicles such as SUVs, as emphatically stated by President Trump (how SUVs are going to circulate in the narrow alleys of Hanoi and Ho Chi Minh City, infested by swarms of mopeds, is a different story).

                This agreement is expected to catalyse growth in several key sectors. Electronics, textiles, furniture, energy (especially Liquefied Natural Gas), and agriculture are poised for expansion. US firms specialising in manufacturing technology, energy solutions, and agricultural products are anticipated to be the primary beneficiaries. Furthermore, beyond immediate trade benefits, the agreement is set to reshape investment strategies, encouraging a greater localisation of supply chains within Vietnam. This strategic realignment is also expected to further solidify the already robust US-Vietnam Comprehensive Strategic Partnership.

                While the potential upsides are considerable, it is imperative for businesses and investors to approach this new landscape with a clear understanding of the accompanying risks. From my vantage point, I identify several significant execution challenges and structural impediments that require close monitoring.

                Enforcement of Transshipment Controls

                The most immediate and perhaps formidable risk lies in the effective enforcement of transshipment controls. Vietnam has historically served as a significant assembly point for Chinese-manufactured components. Ensuring that goods originating from China are not merely re-routed through Vietnam to circumvent US tariffs will require exceptionally close monitoring and robust verification mechanisms. The legal and practical complexities of definitively determining the true country of origin for all goods will undoubtedly pose a persistent challenge. As a European citizen, witnessing how the EU-Vietnam Free Trade Agreement (“EVFTA”), which poses an important stress on certificates of origin, I am particularly aware of this matter.

                While Vietnam has made remarkable strides in its economic development, certain structural issues could hinder its capacity to scale up high-value manufacturing in the short to medium term. These include:

                Legal framework nuances

                Vietnam’s legal framework for foreign investment has seen continuous improvements, but legal and cultural complexities and inconsistencies can and do still arise. Navigating the regulatory landscape, particularly with new rules stemming from this agreement and at a time of deep administrative, governmental, digital and legal reforms in Vietnam, will demand expert legal guidance to ensure compliance and mitigate potential fines and disputes. Issues surrounding so-called sublicences for businesses, intellectual property rights enforcement and contract enforceability, whilst improving, still require careful consideration;

                Education

                The ambition to transform Vietnam into a high-value manufacturing hub necessitates a workforce equipped with advanced skills. While the Vietnamese government prioritises education and workforce development, a significant portion of the current labour force lacks formal training and specialised certifications, let alone a good command of the English language. Bridging this skills gap, particularly in areas like advanced manufacturing, engineering, and digital technologies is a necessity and not just in light of this framework agreement. Companies may need to factor in substantial investment in training and upskilling programmes for their Vietnamese employees.

                Infrastructures

                Despite considerable investment, Vietnam’s infrastructure, particularly in logistics, energy, and transportation, continues to face bottlenecks. And China – the apparent target of Trump’s tariffs – is stepping in with high-speed trains connecting it to the northern Provinces of Vietnam. An increased volume of high-value manufacturing and trade will place further strain on existing infrastructure. Inadequate port capacity, congested roads, and a reliable energy supply (including for EV charging) are critical concerns that could impact efficiency and increase operational costs for businesses.

                Policy divergence

                This framework agreement deepens US-Vietnam trade ties and seems to be paving the way for more US investments in Vietnam, but this second aspect seems to run counter to parallel US policy objectives aimed at reshoring manufacturing back to the United States. This potential divergence in strategic priorities could introduce yet another element of unpredictability in the long term, necessitating a flexible and adaptable investment approach. Future shifts in US policy could impact the durability and full extent of the benefits derived from this agreement.

                This trade agreement, if finalised and implemented, undoubtedly represents a structural shift in global trade dynamics. It strategically positions Vietnam as an increasingly important high-value manufacturing hub and significantly deepens US engagement in Southeast Asia. We will need time, however, to assess the practical impact of the agreement, observing the efficacy of its implementation, and understanding how Vietnam’s inherent strengths and challenges will ultimately shape its role in the reconfigured global supply chain.

                We will also need to see what China, if anything, will do as a countermeasure. In fact, any assessment of Vietnam’s evolving trade landscape would be incomplete without a thorough consideration of China’s influence and strategic posture. President Xi Jinping has consistently championed a vision of a “community of shared future for mankind,” a concept that, while outwardly promoting global cooperation, also subtly underscores a demand for international alignment with Beijing’s interests. In the context of escalating trade tensions, Xi has repeatedly warned that “trade wars have no winners,” advocating for unity against protectionist measures, yet simultaneously implying that nations must ultimately choose sides, either with or against China’s economic and political orbit. Vietnam, despite its historical complexities and occasional maritime disputes with Beijing in the South China Sea (or East Sea, as it is officially called by Hanoi), remains deeply interwoven with China’s economy. China has been Vietnam’s largest trading partner for many years, with significant inflows of Chinese FDI, loans, and project contractors. This economic dependency is particularly evident in various sectors, where Chinese components and materials form a substantial part of Vietnamese manufacturing supply chains. While Vietnam has actively sought to diversify its trade partners and reduce its reliance on China, the sheer scale of the bilateral economic relationship means that disentanglement is a long-term, complex endeavour. Furthermore, China’s influence extends beyond direct trade into crucial regional resources. The Mekong River, a lifeline for millions in Southeast Asia, originates in China, which has constructed numerous upstream dams.

                As Vietnam navigates its enhanced trade relationship with the United States, it must simultaneously contend with the enduring economic gravity and strategic ambitions of its northern giant neighbour. Any perceived move by Vietnam to significantly shift away from China could invite retaliatory measures or heightened pressure from Beijing. Businesses investing in Vietnam must not only grasp the intricacies of the US-Vietnam agreement but also meticulously analyse how these developments will intersect with, and potentially be impacted by, the intricate, often delicate, and sometimes fraught relationship between Hanoi and Beijing. Understanding this geopolitical tightrope will be essential for sustainable success in the Vietnamese market. Prudence, informed legal counsel, and a keen eye on evolving geopolitical and economic realities will be paramount for those seeking to capitalise on this transformative new chapter.

                Takeaways

                • Tariffs:The US-Vietnam framework agreement marks a significant departure from previous trade dynamics, reducing US tariffs on most Vietnamese imports to 20% (from a mooted 46%) while imposing a 40% tariff on transshipped goods, especially from China.
                • Vietnam’s market opening:Vietnam has committed to duty-free access for a broad range of US products and stricter controls on Chinese goods transiting its territory.
                • Growth / manufacturing shift potential:The agreement is expected to fuel expansion in Vietnamese electronics, textiles, furniture, energy (LNG), and agriculture. It also encourages supply chain localisation within Vietnam (normally more of an assembly point for Chinese products).
                • Execution challenges: Effectively preventing the re-routing of Chinese goods through Vietnam to avoid tariffs will be a complex and demanding task; Despite economic progress, Vietnam faces hurdles in scaling high-value manufacturing due to legal framework nuances (e.g., sublicences, IP enforcement), a skills gap in its workforce (lack of formal training, English proficiency) and infrastructure bottlenecks (logistics, energy, transportation).
                • US policy divergence:The agreement’s encouragement of US investment in Vietnam appears to contradict the broader US policy objective of reshoring manufacturing.
                • China:Businesses must consider China’s significant economic sway over Vietnam, including its position as Vietnam’s largest trading partner, its FDI, and its control over shared resources like the Mekong River. Any major shift by Vietnam away from China could lead to retaliatory measures from Beijing.
                • Uncertainty:This is not a final agreement, so the situation might change. Prudence and informed legal counsel are crucial for businesses navigating this evolving landscape.

                Roberto Luzi Crivellini

                Áreas de práctica

                • Arbitraje
                • Contratos de distribución
                • Comercio internacional
                • Derecho Internacional Privado
                • Derecho Inmobiliario
                Contáctanos Roberto

                Contacta con Roberto





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                  Contracts for Wine Distribution in China. 10 takeaways

                  4 de junio de 2025

                  • China
                  • Contratos de distribución

                  Executive Summary

                  The African Continental Free Trade Area (AfCFTA) remains one of the most ambitious integration projects in the world. Yet, several years into its operational phase, it has not (yet) delivered the structural shift many expected. A recent analysis underscores the gap between political momentum and economic reality: implementation remains uneven, the agreement is still used by only a portion of participating states, and non-tariff barriers and infrastructure deficits continue to dominate the cost of doing business across borders.  For Egypt, the opportunity is still real — but it depends less on treaty headlines and more on enabling conditions: trade logistics, customs efficiency, regulatory convergence, and competitive industrial capacity. 

                  Looking Back: The Promise of a Single African Market

                  When the AfCFTA was launched, expectations were understandably high. A continent-wide trade framework was supposed to reduce tariffs, facilitate trade in goods and services, and strengthen regional value chains — with the broader goal of moving African economies up the value ladder.

                  In my 2022 article, I asked whether AfCFTA could become a game changer for Egypt, given Egypt’s industrial base, strategic geography, and the potential to diversify export markets beyond traditional partners. (For background, see the earlier article here”).

                  The Reality Check: Intra-African Trade Remains Structurally Weak

                  Several years later, the interim assessment is sobering. As the Frankfurter Allgemeine Zeitung (FAZ) recently put it, AfCFTA is not a “game changer” yet, and only about half of member states currently meet the practical prerequisites to trade under the agreement.

                  A deeper reason is structural: no other world region trades so little with itself, and while statistics may undercount informal cross-border flows (especially in food), the overall picture remains unchanged.

                  Trade integration cannot deliver transformative outcomes if production, logistics, and institutions do not support scale.

                  Implementation Has Been Slow — and Often Symbolic

                  Operationalisation did not start with full-scale liberalisation. Instead, the AfCFTA began with a pilot approach: the Guided Trade Initiative (GTI) launched in October 2022, initially with eight states, later joined by additional countries, including Nigeria and South Africa by spring 2025.

                  The GTI created valuable learning effects, but it also underlined a key point: early progress was often presented through symbolic deals, while product coverage and volumes remained limited. FAZ highlights that only selected goods could be traded duty-free and that key sectors remained constrained for a long time due to missing or unresolved technical rules.

                  A pilot, however, cannot substitute for full operational certainty — the kind businesses need to restructure supply chains and invest.

                  Tariffs Are Not the Main Barrier — Trade Costs Are

                  AfCFTA is frequently discussed in terms of tariff liberalisation. Yet, evidence suggests that the largest gains do not come from tariffs but from reducing non-tariff barriers and improving trade infrastructure.

                  FAZ points to a central reality: tariffs tend to add around 20–30% to intra-African trade costs, whereas non-tariff costs can be far higher — driven by bureaucracy, lack of harmonised standards, inefficient border processes, and transport barriers.

                  This is the crux: even with reduced tariffs, trade will not expand meaningfully if goods still cannot move cheaply, quickly, and predictably.

                  Integration Complexity and Distributional Politics

                  Africa’s integration landscape is shaped by multiple overlapping regional economic communities and trade regimes. This creates legal and administrative complexity — often described as an integration “spaghetti bowl.” FAZ notes the challenge of coordination and the continued fragmentation of rules.

                  There is also a political economy dimension. Intra-African trade is heavily influenced by a small number of larger economies — and the distribution of benefits matters. FAZ highlights the dominance of major players (notably South Africa) and the concern that tariff liberalisation alone may entrench existing industrial advantages.

                  Where governments expect asymmetric outcomes, resistance often takes the form of delay, narrow implementation, or persistent non-tariff barriers.

                  What This Means for Egypt: The Opportunity Is Real — But Conditional

                  Egypt’s strategic case for AfCFTA participation remains strong: industrial potential, geographic location, and the opportunity to access and shape growing markets. But the experience so far suggests that the treaty text alone does not generate trade flows.

                  For Egypt’s private sector, the decisive factors are practical:

                  • predictable and efficient customs clearance and border procedures,
                  • logistics corridors and port efficiency,
                  • regulatory convergence (standards, certification, compliance),
                  • stable access to trade finance and payments,
                  • competitive energy and production conditions for manufacturing and processing.

                  AfCFTA can support these developments — but it cannot replace them.

                  The “Game Changer” Pathway: What Must Happen Next

                  FAZ concludes that AfCFTA will only become truly impactful if it is paired with the fundamentals: major infrastructure investment, stronger production and processing capacity, and a credible industrial policy.

                  At the same time, Africa faces a classic chicken-and-egg problem: without development there is limited investment appeal; without investment there is limited development.

                  For Egypt and its partners, a pragmatic strategy would be to:

                  1. treat AfCFTA as a platform for real trade-cost reduction, not only tariff debates;
                  2. focus on a limited number of scalable corridors and sectors where regional value chains can realistically grow;
                  3. strengthen implementation capacity so that preferences become usable for firms — especially SMEs;
                  4. enhance legal certainty and dispute resolution reliability for cross-border commerce.

                  Conclusion

                  AfCFTA remains a landmark achievement in terms of political commitment. But as of today, it has not yet been the “game changer” many hoped for.

                  For Egypt, the key question is no longer whether AfCFTA is visionary — it is. The question is whether governments and businesses can translate it into lower real trade costs, higher competitiveness, and bankable cross-border transactions. If those enabling conditions improve, AfCFTA’s promise can still become commercial reality.

                  After “Liberation Day,” many foreign companies offered discounts to American importers to help them offset the tariffs. A few months later, the US Supreme Court declared the «reciprocal» tariffs unlawful, but on the same day, President Trump announced new tariffs. In this article, we provide a practical overview of how to handle various scenarios, shifting from a reactive, unstructured approach to deliberate management of price volatility and trade flows caused by the introduction, adjustment, and removal of tariffs.

                  Tariff Sharing agreements

                  For a long time, the question has been straightforward: who absorbs the extra customs cost? The exporter? The importer? Both? The question remains important, but today it is incomplete.

                  The new scenario, in light of the recent ruling by the US Court of Justice on March 20, 2026, is: what happens if that duty is then canceled and refunded? If the cost was shared between the parties, the benefit of the refund must follow a consistent logic. In the absence of a clear agreement on this point, however, there is a risk of economic misalignment that could compromise the commercial relationship.

                  Let’s imagine an Italian winery that sells its products to a US importer. Following the introduction of reciprocal duties, the parties have decided that the exporter will grant an extraordinary discount of 7.5%, explicitly motivated by the need to share the impact of the duty. The commercial relationship continues, volumes remain stable, and the importer avoids passing on the entire increase to the end customer.

                  As a result of the Supreme Court ruling (or, in the future, another ruling or administrative decision), the importer obtains a refund of the duties paid during that period.

                  If no formal agreements have been made on this point and the documentation refers generically to a «commercial discount» and says nothing about reimbursement, the situation afterward may be difficult to reconstruct and, above all, could lead to commercial tension. As a result, a positive development (the cancellation of the duty and the right to reimbursement) becomes a problematic factor that jeopardizes the relationship.

                  Is the exporter entitled to a refund of the discounts granted to mitigate the duties?

                  In the absence of a different agreement between the parties, the right to reimbursement belongs to the party who paid the duty, i.e., in most cases, the importer. Therefore, there is a risk that the importer will enjoy a double benefit (the discount and the duty refund), while the exporter will get nothing.

                  For this reason, it is essential that the parties do not limit themselves to negotiating prices and discounts, but also establish the consequences of the adoption, modification, or revocation of duties on the contract, including any refunds.

                  To achieve this, the first step is to accurately classify and document the discounts granted. If only a «commercial discount» appears in emails, commercial orders, credit notes, and invoices, it will be harder to later argue that this discount was actually an extraordinary, temporary contribution related to the duty. Conversely, if the documentation and contract specify that it is a tariff sharing or tariff mitigation measure, identifying the amounts to be refunded after the fact becomes much simpler.

                  The goal is to create a clear view of the trend in discounts and payments so that, if needed, financial flows can be adjusted to align with the original terms of the agreement: if the exporter has helped cover a cost that then, in whole or in part, does not end up materializing, they will be eligible for a refund of the contribution paid.

                  The contract will therefore include, in addition to the Tariff Sharing clause, a Tariff Reimbursement Allocation clause, which states that if the importer receives a refund, credit, or any other economic benefit related to the duty for which the exporter has granted a discount, the importer must return the corresponding portion of the benefit to the exporter in full. or proportionally, depending on how the parties intend to distribute risk and incentive.

                  Importer’s responsibility to seek reimbursement

                  It is unclear whether, in the case of US reciprocal duties, importers can simply file an administrative claim to get a refund or if legal action will be required. The latter seems more probable.

                  Generally, obtaining a duty refund involves action, deadlines, documentation, and coordination with brokers and customs consultants. In most cases, the entity controlling the process is the importer (or someone acting on their behalf).

                  This raises a sensitive but very real issue: if the importer knows that they will have to invest time and money to obtain a refund, only to then have to share the benefit with the exporter, their incentive to take action may be reduced. To prevent this inertia  the contract should contain an express obligation to take action, set out as a duty of best efforts or commercially reasonable efforts.

                  For example, the contract should specify that the importer must inquire about the conditions and time limits of the process, keep relevant documentation, regularly inform the exporter about the progress of the initiatives, and not unilaterally waive or reduce the claim if it affects the exporter’s economic rights.

                  Preventive Agreements on Litigation and Cost Allocation

                  When reimbursement involves a lawsuit or structured legal action, the obstacles are organizational and financial: who decides if and when to proceed, who selects the lawyers, who pays the costs upfront, how the net recovery is divided, and who has the final say on a settlement. This generally applies to all contracts, not just this case: dispute resolution methods must be addressed and agreed upon before the problem arises.

                  Otherwise, the dispute resolution process risks becoming a secondary improvised negotiation at the worst time — when the parties are already under pressure from margins, cash flow, and regulatory uncertainty. As a result, it becomes much harder to reach an agreement.

                  How to handle new tariffs and their potential cancellation

                  To safeguard against uncertainty, the agreement should be organized into two stages.

                  • The first stage regulates the immediate impact of the change in scenario, for example, the introduction of a new tariff or its increase (renegotiation, cost sharing, automatic adjustment : I discussed this in this article).
                  • The second stage manages the possible «rollback» (right to reimbursement, process, allocation criteria).

                  This approach has a clear benefit: it does not force the parties to discuss every time the tariff regime changes or a decision to cancel tariffs is made. Instead of reacting to market changes, a tool is adopted to manage potential scenarios, which is much more resilient commercially and easier to oversee, as the rules have already been agreed upon.

                  This allows the impact of duties to be regulated not as an extraordinary variable, to be agreed upon on a one-time basis, but as a structural, adaptable phenomenon that could last a long time.

                  This is why it is crucial to know how to draft contracts that cover both the current situation and potential changes, including any refunds.

                  Conclusion: Three practical steps for companies exporting to the US

                  The first is to agree on the consequences for the contract of the introduction of a new duty, increasing it, or revoking it (renegotiation, cost sharing, automatic price adjustment, right to share the refund).

                  The second is to clearly document any discount granted to offset a duty. If it remains a generic «commercial discount,» the right to a refund if reimbursement occurs will be much harder to enforce.

                  The third step is to determine what happens if the duty is canceled or revoked: the importer’s responsibility to take action to get a refund, manage the administrative process or litigation, how to divide costs, who oversees the activities of consultants and lawyers, and how the recovered funds will be allocated.

                  How do you approach negotiating a trade agreement with China?

                  Based on my experience, let’s examine the issues to be addressed and the main questions to ask, taking the negotiation of a trade distribution agreement as a practical example.

                  Let’s start with the first issue that is important to clarify.

                  Nice Business Card – But Who Is This Guy?

                  Business cards, websites, printed or digital brochures, presentations, and any other materials shared in English have no official value in China.

                  The company name of the counterparty and the first and last names of people representing it or acting on its behalf, written in English, are only fictitious names.

                  To be certain of the company’s data and the identity of the persons, it is necessary to ask for the information in Chinese, with particular reference to the company’s business license (equivalent to the Companies House or Chamber of Commerce’s excerpt), from which the name, corporate purpose, registered and paid-up share capital, and the name of the legal representative can be inferred.

                  The data can then be verified by accessing the portal of the State Administration of Industry and Commerce (SAIC) of the province where the Chinese party is based.

                  This first verification is essential to ensure that you do not waste time or even run into scams (here’s an in-depth article on Legalmondo’s blog).

                  If You Don’t Own Your Trademark, Someone Else Will – and Charge You for It

                  Trademark First, Trade Later. China operates on a first-to-file system for trademarks, which means that the first person or company to register a trademark – not necessarily the original creator or most famous user – gains the legal rights to it. This creates a serious risk: if you haven’t registered your trademark in China, someone else might do it before you, and then either use it freely or demand a hefty ransom to give it back. Even high-profile figures like Elon Musk and Michael Jordan have been entangled in costly and protracted disputes with Chinese trademark squatters. In many cases, getting the mark back is highly complicated, and sometimes legally impossible.

                  To avoid this, register your trademarks early, even before entering the Chinese market. File directly with the China Trademark Office (CTMO) and don’t stop at the English version — consider registering a Chinese character version as well, since that is how your brand will often be known locally.

                  Once that base is covered, clearly state in your contract that your Chinese partner is not allowed to file a registration of any of your trademarks in China, in Latin or Chinese characters, and that he will use trademarks and IP rights in strict conformance to the contract and your instructions.

                  For a deeper dive into how to effectively protect your IP rights in China, check out our detailed article on the Legalmondo blog.

                  Contracts can wait. First, get on the same page

                  When negotiating with a Chinese partner, it’s often a mistake to begin the conversation by exchanging contract drafts. Instead, focus first on the substance — the relationship’s commercial and technical terms. Using a clear checklist of key discussion points (such as products, pricing, delivery terms, technical standards, after-sales support, exclusivity, duration, payment terms, etc.) helps ensure that both sides are aligned on what really matters. Take detailed notes and keep minutes of the discussions, especially where and when consensus is reached, and make sure those minutes are circulated and expressly agreed upon. Once substantial agreement has been achieved on the main terms, this memo can then be handed over to your lawyer, who will translate the business understanding into clear and coherent contractual language. This approach saves tons of time, as it helps avoid unnecessary back-and-forth on legal language before the core deal is in place.

                  Think Your NDA Covers You in China? Think Again

                  Yes, they are—and often underestimated. A well-drafted Non-Disclosure Agreement (NDA) is essential when the parties plan to exchange confidential information, such as technological know-how, commercial strategies, supplier data, or client lists. Especially in the early phases of negotiation or cooperation, before a main contract is signed, an NDA helps protect intellectual and business assets.

                  However, as with all contracts in China, a generic NDA template copied from other jurisdictions will likely be of limited use. To be truly effective, the NDA must be adapted to the specifics of the Chinese legal environment. This includes ensuring that it is enforceable in China: the NDA should include the proper dispute resolution mechanism (see below on why you should consider applying Chinese law and litigating in China), and it must specify clear, valid, and proportionate penalties for breach. In Chinese practice, stating specific contractual penalties (liquidated damages) is often more effective than vague references to compensation, as courts and arbitrators in China tend to enforce these more reliably if they are reasonable.

                  While a good NDA is useful, it often falls short in China’s manufacturing and sourcing landscape. This is where the NNN Agreement – standing for Non-Disclosure, Non-Use, and Non-Circumvention – becomes critical. Unlike standard NDAs that primarily focus on confidentiality, an NNN Agreement is designed to address the unique risks of doing business in China. It prevents the recipient from not only disclosing confidential information but also from using it for their benefit or bypassing the disclosing party to work directly with suppliers, clients, or partners. Which, in China, is a very real risk.

                  This broader scope is vital when dealing with Chinese manufacturers or intermediaries, who may otherwise be tempted to replicate products or contact customers directly or through third parties. As seen with the NDA, also the NNN Agreement must be drafted in Chinese, governed by Chinese law, and enforceable in Chinese courts -otherwise, it may offer little real protection.

                  Joint venture? Easy, Cowboy

                  A joint venture is often the first proposal that comes up when negotiating with a potential Chinese partner. It seems appealing: sharing risks and investments, accessing the local market with an ally, leveraging their knowledge and network of contacts. But the reality is often very different from what it appears to be.

                  A joint venture is a complex, expensive, and rigid corporate structure that requires significant investments of money, time, and human resources, as well as the ability to continuously manage often divergent interests among the partners. The vast majority of Sino-Foreign JVs have gone wrong, or will go wrong. Or very wrong. First and foremost, because the JV is usually managed by the Chinese partner, and exercising effective control over the company’s operations is a very challenging undertaking.

                  Before going down this road, it is essential to ask yourself a few questions: Is the joint venture really indispensable for developing this business in China? (Spoiler: generally, no). Are there less restrictive and risky alternatives, such as a distribution agreement or a licensing agreement? (Yes, almost always). And above all: how well do we really know our potential partner?

                  A joint venture should only be considered if it is strictly necessary for the project’s development, after carefully verifying the commercial viability and the reliability of the Chinese partner, and ensuring the ability to maintain effective control over the JV’s operations.

                  It is better to start with simpler and more flexible forms of collaboration to test the market and the relationship with the other party before committing to such a demanding investment. Otherwise, the mirage of the joint venture risks turning into a nightmare that can be very costly.

                  Memorandum of Understanding: Where Good Intentions Become Bad Contracts

                  A Memorandum of Understanding (MoU) is a helpful tool at the early stage of a commercial relationship. It serves as a roadmap for future negotiations, where the parties outline the main principles and intentions that will guide the drafting of the final agreements. When used correctly, an MoU can significantly facilitate negotiations by ensuring that both sides commit to negotiating the agreement in good faith and share a common understanding of key points such as pricing models, territorial scope, exclusivity, milestones, budget, or performance expectations.

                  However, an MoU must be used for what it is: a preparatory document, not a binding contract. Care must be taken to avoid ambiguity and unintended commitments. The text should clearly specify that the parties remain free to conclude – or not – the final agreements and which clauses are non-binding – such as the commercial framework or indicative timelines – and which provisions are binding, typically confidentiality, exclusivity during the negotiations (if agreed), governing law, and dispute resolution. A poorly drafted MoU, which includes overly precise and complete terms, can be misinterpreted as a final agreement, creating unnecessary legal risk. So yes, MoUs are valuable – but only when used correctly. If you’d like to know more, go deeper by reading this article.

                  Bad Drafts, Big Headaches, Poor results

                  Draft agreements used in China are often copied and pasted from incomplete, superficial, poorly organised templates written in bad English, which often do not match the Chinese version of the contract.

                  Correcting and integrating these drafts is complicated and more time-consuming than starting from a good template, with suboptimal results.

                  It would be better to propose a consistently constructed text and ask the other party to propose any changes and additions to this draft.

                  Your Western Contract Template Won’t Work Here

                  Even if an English-language contract is perfectly valid, there are many reasons why using contract templates built for other countries in the Chinese market is inadvisable.

                  The first is the fact that Anglo-Saxon-based agreements, such as those for the U.S., refer to a common law system (which is based on judicial decisions and case law precedents) that is very different from that of civil law countries (such as China and Italy), which derives from the Roman legal tradition, based on a codified set of written laws.

                  It follows that the layout of an agreement on the Anglo-Saxon model is different, much more detailed, and wordy than that of a typical agreement based on a civil law system. Since contract negotiations in China are generally lengthy and complex, working on redundant and complicated text at the outset does not help.

                  If we stick to the example of a distribution contract, it should be added that it is advisable to apply Chinese law to provide for arbitration based in China (e.g., at CIETAC) or in Hong Kong or Singapore (third countries, where, however, the costs of the procedure increase significantly) as the mode of dispute resolution. So, the contract should be built on a model that conforms to the law that will apply to the relationship.

                  Home Court Advantage Won’t Help You in China. In fact, quite the opposite

                  This is a typical point of disagreement in the negotiation of an international contract: the parties aim to have the law of their own country apply, and to stipulate that any disputes be adjudicated by their domestic courts.

                  In our case, insisting on the application of Italian (or any other foreign) law and state court is not a good idea: it should be considered, in fact, that a distribution agreement is carried out, for the vast majority, in the country where the distributor operates and where the products are sold (in our case, in mainland China).

                  In disputes, the parties’ (particularly the manufacturer’s) interest is to obtain a quick decision by the adjudicating body, especially if situations requiring immediate protection (such as unfair conduct or counterfeiting of trademarks and patents by the distributor) are ongoing.

                  None of this is possible if one goes to an Italian judge (with lengthy litigation time and the need then for a complex and costly process to recognise and enforce the decision in China); on the contrary,  an arbitration in China, applying Chinese law, allows one to reach a decision quickly (on average 6-9 months) and, if necessary, also to obtain urgent measures to stop any unfair conduct.

                  Chinese Law Isn’t a Black Box (If You Know What You’re Doing)

                  The lawyer assisting you should know it.

                  Therefore, it is not a leap in the dark, and one should not fear surprises.

                  In addition, it should be remembered that an agreement is primarily based on the covenants that the parties have written in the contract; therefore, if the contract has been well drafted, the rules to be applied are clear.

                  Finally, if we consider distribution agreements, keep in mind that they are a framework contract, within which a series of separate product sales contracts are concluded. If both countries are contracting parties to the 1980 Vienna Convention on the International Sale of Goods (CISG), then the uniform, clear, and balanced rules of the convention apply automatically, just don’t opt out!

                  One Contract, Two Languages

                  The contract is also valid in English only.  However, it is undoubtedly advisable to draft a Chinese version with facing text.

                  This is for several reasons: first, it prevents the Chinese party from having to arrange for a translation of the text during negotiations for its own internal use (top managers often do not speak English), thus slowing down the various steps of negotiations.

                  Also, to ensure that the Chinese side fully understands the agreement’s content and to avert misunderstandings (real or instrumental) about the interpretation of certain covenants.

                  Finally, it should be borne in mind that if the contract were later to be used before a court or administrative authority in China, the only language admitted would be Chinese; for this reason, it is better to have already a text agreed and signed by the parties in Chinese as well, rather than having to prepare a unilateral translation later.

                  Sign. And chop

                  Does the contract need to bear the company’s official stamp? Yes, and this point is absolutely crucial. In China, a company’s official «chop» (the red-ink stamp) is equivalent to a signature and is conclusive proof that the person signing the contract has the authority to represent the company. A signature alone, even from someone with an important-sounding title, may not be sufficient if it is not accompanied by the official chop. Without it, the contract might later be challenged or even considered void. Before signing, always verify that the stamp used matches the one registered with the company’s business license or official corporate records, and ensure that the stamp is applied on every page or at least on the signature page, in line with local practice.

                  Don’t Let Your Contract Collect Dust

                  Things change fast, especially in China. New products are added, market conditions evolve, people leave the company, new competitors emerge on the horizon, and so on. Companies constantly adapt to the new conditions, and so must the contract.

                  Any change in the relationship should be formalized correctly. To avoid misunderstandings and disputes, it’s advisable to include an integration clause in the contract, specifying that any amendments or additions will only be valid if agreed in writing, signed by the parties’ authorized representatives, and annexed as an addendum to the original agreement.

                  It’s not enough to include this clause – you must follow it consistently. If things change, agreements reached verbally, through Wechat messages, and through email exchanges may make things complicated if they are not formalised adequately according to the procedure set out in the original contract.

                  If you’d like to go deeper, check out this article.

                  Son bastante frecuentes las relaciones comerciales con agentes o distribuidores que duran años y sin ningún documento firmado. Y, cuidado, porque ya sabemos que un contrato puede existir incluso verbalmente.

                  La inexistencia de un contrato escrito va a añadir dificultades en una posible reclamación, por eso, lo que se haga entre la decisión de ponerle fin y el momento de la reclamación es muy importante. Recuerda: “cualquier cosa que escribas será usada en tu contra”.

                  La decisión de terminar una relación comercial es un momento muy delicado al que, no sé por qué, a los abogados no se nos invita. Os doy algunos ejemplos (todos reales) en los que las empresas o algún empleado con la mejor voluntad escribió al agente/distribuidor. Todos fueron luego muy perjudiciales para la empresa:

                   

                  Decir “Ponemos fin a nuestra relación comercial” cuando la estrategia será defender que dicha relación comercial no existe, sino que son contratos independientes y encadenados (por ejemplo, suministro en lugar de contrato continuado de distribución; consecuencias de indemnización muy relevantes).

                  “Usted ya no representa a nuestra sociedad”, lo que puede ser una prueba de que antes sí lo hacía.

                  “A partir del día X usted ya no puede actuar en nombre de nuestra sociedad” que probaría que antes sí podía actuar en su nombre.

                  “Usted no puede asistir a la feria de X en nuestro nombre”. Una forma de confirmar que entre las competencias del agente/distribuidor estaba participar en ferias y probablemente acredita los clientes obtenidos.

                  “Las ventas promovidas por Ud. se han visto reducidas significativamente en el año N”. Cuando no hay contrato escrito ni otra forma de documentarlo, imputar un incumplimiento de una obligación que no está clara, puede ser contraproducente.

                  Decir “No estás llevando a cabo una promoción activa de nuestros productos” para añadir a continuación: “le instamos a que deje de promocionar la venta de nuestros productos”.

                  “Usted deja de ser nuestro representante exclusivo”, lo que prueba un tipo de relación (representación/agente) y un acuerdo tácito o expreso (“exclusividad”)

                  “Hemos designado a otro representante en su zona”, que demuestra que el agente/distribuidor tenía una zona asignada y “representaba”.

                  “A partir de este momento los pedidos serán asumidos por X” que, igualmente confirma un tipo de relación.

                  En resumen: a partir del momento en el que la empresa valora poner fin a una relación comercial, sobre todo cuando no está escrita y antes de enviar cualquier carta, es conveniente pensar bien en la estrategia de cara a una posible reclamación. Es el momento más adecuado para asesorarse y evitar sorpresas. Cualquier comunicación que no esté alineada con esa estrategia diseñada desde el principio solo podrá aportar confusión y problemas.

                  Remember the USA – EU agreement on 15% tariffs? I wrote that with a negotiator like Trump the game is never over (article here) and—after the recent interlude featuring a threat of 100% tariffs on pharmaceuticals—the U.S. government has announced the imposition of an overall 107% duty on Italian pasta, which could take effect on January 1, 2026.

                  Where this new duty comes from

                  The antidumping investigation was launched by the U.S. Department of Commerce at the request of certain competing American companies and is based on a 1996 antidumping order that allows for periodic reviews of imports of Italian pasta. The Department of Commerce conducts these checks annually to assess whether Italian producers are selling pasta at prices lower than the U.S. domestic market, a practice known as “dumping.”

                  Companies involved in the investigation

                  The Department of Commerce selected two sample companies for in-depth analysis, defined as “mandatory respondents”: La Molisana and Pastificio Lucio Garofalo. According to the official document published by the U.S. administration, for the period from July 1, 2023 to June 30, 2024, both companies allegedly sold their products below market prices, resulting in the imposition of a duty of 91.74%.

                  U.S. authorities justified this percentage by claiming the two companies did not provide complete or compliant information as requested by the Department and were therefore insufficiently cooperative during the investigation. What is very important is that, in addition to the two companies directly examined, the additional 91.74% duty is also applied to numerous other Italian producers not individually reviewed. This methodology, while formally permitted under U.S. law as an exception, is being applied without any direct verification of the other companies.

                  Next steps in the procedure

                  Italy’s Ministry of Foreign Affairs moved immediately, formally intervening in the proceeding as an “interested party” through the Italian Embassy in Washington. The Foreign Ministry is working in close coordination with the companies concerned and, in concert with the European Commission, to persuade the U.S. Department to revise the provisional duties.

                  The two companies involved (La Molisana and Garofalo) can submit documentation to contest the dumping allegations. However, if dumping is confirmed, the Department of Commerce will instruct Customs to apply antidumping duties on goods sold and entered into U.S. commerce.

                  The preliminary nature of this determination means there is still room to change the decision before it becomes final.

                  Possible effective date

                  The new super-duty of 91.74%, which will be added to the existing 15% tariff for a total of 107%, is scheduled to take effect on January 1, 2026. This date therefore represents a crucial deadline for all ongoing diplomatic and legal actions.

                  If confirmed, the economic impact would be significant: in 2024, Italian pasta exports to the United States reached a value of €671 million according to Coldiretti, accounting for nearly 17% of the sector’s total exports. A 107% duty would risk seriously undermining competitiveness in one of the most important markets for Italian agri-food products.

                   What to do between now and January 1, 2026?

                  At this stage, the entry into force of the new duty depends on the outcome of the ongoing procedure: given what has happened in recent months, and the political use the U.S. administration has made of tariffs—well beyond their technical function—it is reasonable to be pessimistic.

                  So, what to do? In recent months we have seen companies react to the uncertainty over the fate of the tariffs in three ways:

                  • Some rushed to ship as many products as possible before the potential effective date of the duty;
                  • Some granted—upfront—discounts equivalent to the threatened duty, in case it came into force;
                  • Some suspended orders, pending definitive news on the impact of the duties.

                  These are all  valid options, but other effective tools for managing the uncertainty caused by the flurry of announcements, negotiations, and threats from the U.S. administration should not be forgotten: the risk of new duties being introduced, or existing ones being increased, can be managed in the contract by agreeing with the U.S. importer how any tariff change will affect the product.

                  The parties can stipulate, for example, that the increase will be split equally; or that the importer will bear it beyond a certain threshold; or that if the duty exceeds a certain level, the contracts may be terminated. You can find a deeper dive in this article.

                  The only certainty is that trade relations with the U.S. will stay unpredictable for a long time, and it’s vital to carefully manage the risk factors involved in selling products there. Right now, the focus is on tariffs and prices, and I encourage you to take this chance to thoroughly review existing agreements and assess whether—and how—other important points are addressed that could entail significant liabilities: we discuss them, very practically, in this book.

                  On 29 June 2025, the Vietnamese government introduced Decree No. 163/2025/ND-CP (Decree 163). This decree provides detailed guidance on how the updated Law on Pharmacy will be implemented.

                  Like the amended Law on Pharmacy, Decree 163 came into effect on 1 July 2025, replacing the previous Decree No. 54/2017/ND-CP (Decree 54). The new decree sets out comprehensive rules for key aspects of managing pharmaceuticals, including:

                  • Pharmacy practice certificates
                  • Certificates allowing pharmaceutical businesses to operate
                  • Import and export of medicines and drug ingredients
                  • Good Manufacturing Practice (GMP) inspections of overseas manufacturers
                  • Recalling medicines and drug ingredients
                  • Certificates for medicine advertising content
                  • Medicine price management

                  Key Changes in Decree 163

                  Here are some important changes and additions introduced by Decree 163:

                  Destroying Specially Controlled Medicines

                  You no longer need to get approval from the relevant authority before destroying narcotic, psychotropic, and precursor drugs, or pharmaceutical ingredients that are narcotic or psychotropic substances or precursors used in medicines. Instead, you just need to provide notification at least seven working days in advance. This notification must include the planned destruction date and a detailed list of items to be destroyed.

                  E-commerce in Pharmaceutical

                  Pharmaceutical businesses that sell products online must openly display the following information to ensure transparency and consumer safety:

                  • Their certificate allowing them to operate as a pharmaceutical business.
                  • The pharmacy practice certificate of the person responsible for pharmaceutical expertise.
                  • Information about the medicines themselves.

                  Shelf-Life Rules for Imported Products

                  For medicines and ingredients with a total shelf life of nine months or less, at least one-third of their shelf life must remain when they clear customs. Medicines with a shelf life of 30 days or less must still be within their shelf life at the time of customs clearance.

                  Controlling Imported Products

                  All medicines with marketing authorisation (MA) are subject to import control, except for:

                  • Medicines needed for preventing and treating Group A infectious diseases that have been declared epidemics, as per the Law on Prevention and Control of Infectious Diseases.
                  • Medicines with a shelf life of less than 30 days.

                  Importers must inform the provincial People’s Committee at least five working days before making a customs declaration. The People’s Committee can then issue a written notice of non-compliance to the customs authority within five working days of receiving this notification.

                  Medicine Advertising

                  Decree 163 adds a process that allows an approved medicine advertising certificate to be adjusted for certain changes (such as a change to the MA holder or manufacturer information). This means you don’t have to go through the entire initial registration process for medicine advertising content again, as was required under the previous rules.

                  Medicine Price Management

                  Businesses must announce or re-announce wholesale prices, similar to the medicine price declaration process under Decree 54. Some medicines are exempt from this requirement, including those provided free of charge for emergency responses, national health programmes, humanitarian aid, clinical trials, scientific research, or exhibition purposes, and medicines carried as personal luggage.

                  The Ministry of Health (MOH) can make recommendations if the announced or re-announced price is significantly higher than similar medicines already on the market. This includes situations where:

                  • The announced or re-announced wholesale price of the medicine is higher than the highest price of similar medicines.
                  • The price difference is more than 35% (for medicines priced under VND 1 million) or 15% (for medicines priced at VND 1 million and above) compared to winning bid prices in tenders.
                  • The announced or re-announced price is higher than prices in the country of origin or other markets (if there’s no similar product in Vietnam).
                  • When such differences are found, the MOH issues a formal recommendation to the announcing business and publishes it online for transparency and accountability.

                  Further Guidance in New Circular

                  On 1 July 2025, the MOH issued Circular No. 31/2025/TT-BYT (Circular 31), which further details how the amended Law on Pharmacy and Decree 163 should be implemented. Circular 31 officially replaces Circular No. 07/2018/TT-BYT and Decree 54 and came into effect immediately.

                  Key provisions of Circular 31 include:

                  Notification of Practising Pharmacists

                  Pharmaceutical businesses that are not part of a pharmacy chain must inform the relevant authority of a list of people currently working at the business who hold pharmacy practice certificates. This notification must be submitted within 15 days of the date the certificate allowing the pharmaceutical business to operate was issued, or when there are any changes to the list. This is a shorter deadline than the previous 30 days under earlier rules.

                  Pharmacy chains have similar notification duties and deadlines. Specifically, the chain operator must inform the provincial authority where each pharmacy in the chain is located about the list of practising pharmacists at those sites. Additionally, pharmacy chains must notify the authority if pharmacies are added or removed from the chain, and if there are any rotations of the people responsible for pharmaceutical expertise between pharmacies within the chain.

                  Medicine Information Activities

                  Under Circular 31, medicine information can still be given to healthcare professionals through information materials, seminars, and medical representatives.

                  However, Circular 31 introduces a significant change by removing the need to obtain a certificate for medicine information content before carrying out these activities. Under the new rules, pharmaceutical businesses, representative offices of foreign pharmaceutical companies in Vietnam, and MA holders are now responsible for creating and distributing medicine information materials. These materials must comply with the package inserts for medicines approved by the MOH, the Vietnamese National Drug Formulary, and any related documents and professional instructions issued or recognised by the MOH.

                  Donald Trump, never one to shy away from drama or diplomacy-via-caps-lock, has slapped a 50% tariff on all Brazilian exports to the United States. The justification? In his own delicate prose: «The treatment of former President Jair Bolsonaro is a disgrace… A witch hunt that must end IMMEDIATELY!»

                  And just in case anyone thought this was about trade imbalances or economic strategy, Trump made things crystal clear: «Due to Brazil’s insidious attacks on free elections…».

                  In short, the 50% tariff isn’t about coffee, orange juice, or flip-flops. It’s about a Supreme Court judgment, applying Brazilian law, regarding Brazilian politicians accused of conspiring in a coup d’état. In other words, this is a brazen (and frankly absurd) attempt at judicial intervention via trade war.

                  Trump, with his characteristic subtlety, offered a solution: manufacture in the U.S., and he’ll look kindly upon Brazil, like a mafia don offering «protection» after smashing your shop window. But what he meant was: consider Bolsonaro innocent, and we’ll talk.

                  The Brazilian market took the bait

                  Although the fishy interference in Brazilian affairs was determined from a fish out of the water, the market took the bait: in the first 48 hours after the infamous letter, at least 1500 tons of fish were already held in Brazilian ports, as US buyers suspended their contracts due to uncertainty about the costs upon arrival. The fish market is on alert, as 80% of the exports head to the US, mainly coming from small family-owned industries that distribute the catch from artisanal fishing communities.

                  The same effect hit other sectors, from orange, honey, and coffee to aircraft.

                  Brazil’s response and sorcery: don’t mess with us (or our weather)

                  Naturally, Brazil will not sit quietly sipping caipirinhas while its sovereignty is trampled. Reciprocity is on the table: if Washington raises tariffs, Brasília can do the same. But above all, one thing is sure: Brazil will never tolerate foreign interference in its independent judiciary.

                  And then, a curious coincidence: right after Trump’s speech, a tornado accompanied by lightning struck the White House grounds. Pure chance? Maybe. Or could it have been the work of Brazilian indigenous shamans, a particularly well-organized group of umbanda practitioners, or simply the fact that, as every Brazilian child knows, God is Brazilian.

                  Trump might want to check the weather forecast next time before penning another angry letter.

                  The unpredictable becoming predictable

                  Trade wars are rarely tidy affairs, but one thing they consistently deliver is chaos (in legal terms, disruption). And when disruption meets contracts, force majeure disputes often end up in court.

                  At first glance, Trump’s decision to impose a 50% tariff overnight might feel like an unpredictable thunderbolt (quite literally, given the weather at the White House). But here’s the catch: by now, unpredictable tariffs are becoming predictable. When a government with a well-documented love for impulsive economic diplomacy imposes politically motivated tariffs, can anyone claim to be surprised?

                  In most jurisdictions, force majeure requires that the event be extraordinary, unforeseeable, and beyond the parties’ control. A sudden 50% tariff certainly ticks a few of those boxes, but following a repetition of erratic trade policy, one might argue that businesses should expect what in past times was considered unexpected, especially when dealing with certain jurisdictions or political figures. In other words, Trump’s tariffs might not excuse performance if parties didn’t prepare for exactly this kind of volatility.

                  This is where good contract drafting comes into play

                  Savvy businesses are learning that their contracts must go beyond a vague boilerplate clause about “acts of government” or “changes in law.” Instead, they should expressly address the risk of sudden tariff changes, including

                  • hardship clauses that allow renegotiation when costs become commercially unreasonable;
                  • price adjustment mechanisms linked to tariff thresholds;
                  • termination rights triggered by specified levels of customs duties;
                  • currency fluctuation provisions (because tariffs rarely travel alone, and currency swings often accompany them).

                  In short, while no contract can immunize a business from every shock, smart drafting can mean the difference between a commercial headache and a catastrophic breach.

                  Therefore, tariffs may no longer be an unpredictable storm; they are part of the new predictable landscape. Given that your contract might wake up tomorrow facing ‘IMMEDIATE’ punitive tariffs in all caps, your contract should be ready today.

                  The unwitting cupid: strengthening EU-Brazil relations

                  While the tariffs may ruffle trade flows between Brasília and Washington, there’s an unintended silver lining: Trump is proving to be the most efficient matchmaker between Brazil and other markets, such as China and the European Union.

                  The EU-Brazil relationship, already a flirtation with promising prospects, with relevant progress in the EU-Mercosur Agreement, now seems destined for deeper romance. If Mr. Trump insists on isolating the US from Brazil, the old continent stands ready, with flowers and wine in hand, to pick up where the US left off. After all, Brazilian fish can pair up nicely with champagne, cava and prosecco.

                  So thank you, Mr. Trump. In your quest to bully Brazil into submission, you may have done more to strengthen transatlantic ties than any EU Commissioner ever could. As they say in Brasília these days: Trump is not a trade warrior. He’s a cupid in disguise.

                  The recent announcement of a landmark trade agreement framework, following just three months negotiations since President Trump’s tariffs announcement on 2 April 2025, signals a pivotal shift, not merely in bilateral relations, but in the broader architecture of global supply chains.

                  As a commercial lawyer with exposure to Vietnam since 2007, I have observed the evolving dynamics between the United States and Vietnam through the years, talking to students, entrepreneurs, veterans, diplomats, humans from all walks all life, from both nations and beyond.

                  You may recall that Vietnam, with the notable exclusion of China, was to be the nation that would encounter the most stringent tariffs imposed by the Trump administration, reaching an astonishing 46%.

                  The newly forged framework outlines significant reciprocal concessions designed to foster greater trade and investment flows. Granted, pre-April 2 tariffs applied by the USA on Vietnamese goods were lower than what emerges from the framework agreement, but still, it is better than 46%),

                  The United States has committed to imposing a 20% tariff on most Vietnamese imports, a notable reduction from the previously mooted 46%. However, a substantial 40% tariff will apply to goods re-exported from third countries, with a particular focus on those originating from China.

                  Vietnam has pledged to open its market to a wide array of US products. Crucially, it has also committed to implementing stringent measures aimed at restricting the transshipment of Chinese goods through its territory, a long-standing concern for Washington.

                  In a significant win for American exporters, US goods will now enjoy duty-free access to the Vietnamese market, effectively granting “total access”, particularly for large-engine vehicles such as SUVs, as emphatically stated by President Trump (how SUVs are going to circulate in the narrow alleys of Hanoi and Ho Chi Minh City, infested by swarms of mopeds, is a different story).

                  This agreement is expected to catalyse growth in several key sectors. Electronics, textiles, furniture, energy (especially Liquefied Natural Gas), and agriculture are poised for expansion. US firms specialising in manufacturing technology, energy solutions, and agricultural products are anticipated to be the primary beneficiaries. Furthermore, beyond immediate trade benefits, the agreement is set to reshape investment strategies, encouraging a greater localisation of supply chains within Vietnam. This strategic realignment is also expected to further solidify the already robust US-Vietnam Comprehensive Strategic Partnership.

                  While the potential upsides are considerable, it is imperative for businesses and investors to approach this new landscape with a clear understanding of the accompanying risks. From my vantage point, I identify several significant execution challenges and structural impediments that require close monitoring.

                  Enforcement of Transshipment Controls

                  The most immediate and perhaps formidable risk lies in the effective enforcement of transshipment controls. Vietnam has historically served as a significant assembly point for Chinese-manufactured components. Ensuring that goods originating from China are not merely re-routed through Vietnam to circumvent US tariffs will require exceptionally close monitoring and robust verification mechanisms. The legal and practical complexities of definitively determining the true country of origin for all goods will undoubtedly pose a persistent challenge. As a European citizen, witnessing how the EU-Vietnam Free Trade Agreement (“EVFTA”), which poses an important stress on certificates of origin, I am particularly aware of this matter.

                  While Vietnam has made remarkable strides in its economic development, certain structural issues could hinder its capacity to scale up high-value manufacturing in the short to medium term. These include:

                  Legal framework nuances

                  Vietnam’s legal framework for foreign investment has seen continuous improvements, but legal and cultural complexities and inconsistencies can and do still arise. Navigating the regulatory landscape, particularly with new rules stemming from this agreement and at a time of deep administrative, governmental, digital and legal reforms in Vietnam, will demand expert legal guidance to ensure compliance and mitigate potential fines and disputes. Issues surrounding so-called sublicences for businesses, intellectual property rights enforcement and contract enforceability, whilst improving, still require careful consideration;

                  Education

                  The ambition to transform Vietnam into a high-value manufacturing hub necessitates a workforce equipped with advanced skills. While the Vietnamese government prioritises education and workforce development, a significant portion of the current labour force lacks formal training and specialised certifications, let alone a good command of the English language. Bridging this skills gap, particularly in areas like advanced manufacturing, engineering, and digital technologies is a necessity and not just in light of this framework agreement. Companies may need to factor in substantial investment in training and upskilling programmes for their Vietnamese employees.

                  Infrastructures

                  Despite considerable investment, Vietnam’s infrastructure, particularly in logistics, energy, and transportation, continues to face bottlenecks. And China – the apparent target of Trump’s tariffs – is stepping in with high-speed trains connecting it to the northern Provinces of Vietnam. An increased volume of high-value manufacturing and trade will place further strain on existing infrastructure. Inadequate port capacity, congested roads, and a reliable energy supply (including for EV charging) are critical concerns that could impact efficiency and increase operational costs for businesses.

                  Policy divergence

                  This framework agreement deepens US-Vietnam trade ties and seems to be paving the way for more US investments in Vietnam, but this second aspect seems to run counter to parallel US policy objectives aimed at reshoring manufacturing back to the United States. This potential divergence in strategic priorities could introduce yet another element of unpredictability in the long term, necessitating a flexible and adaptable investment approach. Future shifts in US policy could impact the durability and full extent of the benefits derived from this agreement.

                  This trade agreement, if finalised and implemented, undoubtedly represents a structural shift in global trade dynamics. It strategically positions Vietnam as an increasingly important high-value manufacturing hub and significantly deepens US engagement in Southeast Asia. We will need time, however, to assess the practical impact of the agreement, observing the efficacy of its implementation, and understanding how Vietnam’s inherent strengths and challenges will ultimately shape its role in the reconfigured global supply chain.

                  We will also need to see what China, if anything, will do as a countermeasure. In fact, any assessment of Vietnam’s evolving trade landscape would be incomplete without a thorough consideration of China’s influence and strategic posture. President Xi Jinping has consistently championed a vision of a “community of shared future for mankind,” a concept that, while outwardly promoting global cooperation, also subtly underscores a demand for international alignment with Beijing’s interests. In the context of escalating trade tensions, Xi has repeatedly warned that “trade wars have no winners,” advocating for unity against protectionist measures, yet simultaneously implying that nations must ultimately choose sides, either with or against China’s economic and political orbit. Vietnam, despite its historical complexities and occasional maritime disputes with Beijing in the South China Sea (or East Sea, as it is officially called by Hanoi), remains deeply interwoven with China’s economy. China has been Vietnam’s largest trading partner for many years, with significant inflows of Chinese FDI, loans, and project contractors. This economic dependency is particularly evident in various sectors, where Chinese components and materials form a substantial part of Vietnamese manufacturing supply chains. While Vietnam has actively sought to diversify its trade partners and reduce its reliance on China, the sheer scale of the bilateral economic relationship means that disentanglement is a long-term, complex endeavour. Furthermore, China’s influence extends beyond direct trade into crucial regional resources. The Mekong River, a lifeline for millions in Southeast Asia, originates in China, which has constructed numerous upstream dams.

                  As Vietnam navigates its enhanced trade relationship with the United States, it must simultaneously contend with the enduring economic gravity and strategic ambitions of its northern giant neighbour. Any perceived move by Vietnam to significantly shift away from China could invite retaliatory measures or heightened pressure from Beijing. Businesses investing in Vietnam must not only grasp the intricacies of the US-Vietnam agreement but also meticulously analyse how these developments will intersect with, and potentially be impacted by, the intricate, often delicate, and sometimes fraught relationship between Hanoi and Beijing. Understanding this geopolitical tightrope will be essential for sustainable success in the Vietnamese market. Prudence, informed legal counsel, and a keen eye on evolving geopolitical and economic realities will be paramount for those seeking to capitalise on this transformative new chapter.

                  Takeaways

                  • Tariffs:The US-Vietnam framework agreement marks a significant departure from previous trade dynamics, reducing US tariffs on most Vietnamese imports to 20% (from a mooted 46%) while imposing a 40% tariff on transshipped goods, especially from China.
                  • Vietnam’s market opening:Vietnam has committed to duty-free access for a broad range of US products and stricter controls on Chinese goods transiting its territory.
                  • Growth / manufacturing shift potential:The agreement is expected to fuel expansion in Vietnamese electronics, textiles, furniture, energy (LNG), and agriculture. It also encourages supply chain localisation within Vietnam (normally more of an assembly point for Chinese products).
                  • Execution challenges: Effectively preventing the re-routing of Chinese goods through Vietnam to avoid tariffs will be a complex and demanding task; Despite economic progress, Vietnam faces hurdles in scaling high-value manufacturing due to legal framework nuances (e.g., sublicences, IP enforcement), a skills gap in its workforce (lack of formal training, English proficiency) and infrastructure bottlenecks (logistics, energy, transportation).
                  • US policy divergence:The agreement’s encouragement of US investment in Vietnam appears to contradict the broader US policy objective of reshoring manufacturing.
                  • China:Businesses must consider China’s significant economic sway over Vietnam, including its position as Vietnam’s largest trading partner, its FDI, and its control over shared resources like the Mekong River. Any major shift by Vietnam away from China could lead to retaliatory measures from Beijing.
                  • Uncertainty:This is not a final agreement, so the situation might change. Prudence and informed legal counsel are crucial for businesses navigating this evolving landscape.

                  Roberto Luzi Crivellini

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