On July 7, London-based Special Counsel Professor Maxi Scherer spoke at the International Chamber of Commerce’s (ICC) virtual European Conference on International Arbitration, which covered the most pertinent questions relating to arbitration in Europe. It was a must-attend event for arbitration professionals seeking to keep pace with the latest arbitral institutional developments and the evolution of arbitration across the continent.
Ms. Scherer spoke on the very topical panel “Tariff Wars and Supply Chains: Disputes in the making?” She joined James Mendenhall of Sidley, law professor Helene Ruiz Fabri, and Emmanuel Jacomy of Shearman & Sterling in discussing how the Trump Administration has made waves by announcing or threatening new tariffs with the United States’ trading partners.
The panelists discussed how in December 2019 alone, the Trump Administration announced or threatened new tariffs in response to three disputes: steel and aluminum tariffs on Brazil and Argentina to counter the alleged manipulation of their currencies; punitive duties of up to 100% on $2.4 billion in French agricultural and consumer products; and increased tariffs on consumer goods from China if a trade deal with Beijing is not reached.
The speakers reported that the first phase of a US-China trade agreement was finally inked in January 2020, cooling tensions in an election year. They agreed that with the globalization of supply chains, diversified manufacturing and international customer bases, it is the rule—not the exception—that companies find themselves in the middle of Trump’s trade disputes. And they warned that strategies companies would usually take to mitigate the impact of increased tariffs on their business—such as moving manufacturing abroad to avoid country of origin rules or importing into free trade zones and bonded facilities—may disrupt contractual relationships at all levels of the supply chain.
The panel aimed to identify the types of disputes that could arise in this context, and how they may play out with European parties.
“The ICC conference could not have been more timely and topical, and I was delighted to participate in this event, which had over 1,450 participants registered,” said Ms. Scherer.