The year 2024 has been transformative for global trade, marked by shifting alliances, tightening regulations, and escalating geopolitical tensions. From the ongoing fallout of Russia’s invasion of Ukraine to the intensifying U.S.-China trade conflict and pivotal developments in the Middle East, governments worldwide have introduced sweeping sanctions, export controls, and trade measures with far-reaching implications. As businesses and policymakers grapple with the complexities of these changes, the stage is set for further turbulence in 2025. This article explores the key developments of 2024, their impacts on global trade, and what we can expect in the year ahead, offering insights into sanctions enforcement, the semiconductor trade war, and emerging trends in international trade policy.

This article is written by Sefa Geçikli ([email protected]), Kristi Rutgers ([email protected]) and Marius Ungureanu ([email protected]). They are part of RSM Netherlands International Consulting Services with a specific focus on International Trade and Strategy.

The ongoing implications of Russia’s invasion in Ukraine 

EU Developments 

While EU was tightening the sanctions against Russia all over 2024, 14th package of sanctions against Russia on 24th June 2024 was a landmark point, strengthening enforcement and anti-circumvention measures. To further limit Russia's ability to access restricted goods and technology, this package contains several measures meant to boost private sector compliance, support enforcement by national competent authorities, and hamper sanctions circumvention, including by keeping in check the foreign subsidiaries of EU operators. The goal is to prevent any loopholes or indirect methods that could be used to sidestep the sanctions.  

Under the new Article 8a of Regulation (EU) 833/2014, EU companies are required to undertake their "best efforts" to ensure that their non-EU subsidiaries do not participate in activities that undermine EU sectoral sanctions against Russia. Recitals 27-30 to Amending Regulation (EU) 2024/1745 clarify the definition of: “Best efforts” comprising all actions suitable and necessary to achieve the result of preventing the undermining of EU sanctions under Reg 833/2014. Best efforts should be understood as comprising only actions that are feasible for the EU company in view of its nature, its size, and the relevant factual circumstances, particularly the degree of effective control over the non-EU company.  In this context, the situation where the EU company is not able to exercise control over a non-EU company due to the legislation of a third country should be considered

Article 8a marks a significant shift in the treatment of non-EU subsidiaries under EU sanctions:

Expanded Responsibility: Previously, non-EU subsidiaries were only bound by EU sanctions if they conducted business within the EU. Now, EU parent companies must actively work to ensure compliance by their non-EU subsidiaries, regardless of where they operate 

  • Risk Assessment: EU operators must be aware of their non-EU subsidiaries' activities and understand which activities might risk undermining EU sanctions 
  • Compliance Measures: Expected measures include implementing internal compliance programs, sharing corporate compliance standards, conducting mandatory sanctions training, and establishing procedures to react to sanctions violations 
  • Case-by-Case Assessment: The European Commission emphasizes that the feasibility of compliance measures should be assessed based on the nature, size, and relevant factual circumstances of each EU operator 

Moreover, this package included provisions regarding “No Russia” and “No Belarus” clauses in contracts. Article 12g of the EU Council Regulation (No) 833/2014 expands and clarifies the requirements for  "No Russia" and "No Belarus" clauses in contracts. EU exporters are legally required to include a "no re-export to Russia" clause in contracts for the export, sale, supply, or transfer of certain sensitive goods. These goods include items related to aviation, jet fuel, firearms, and other high-priority items listed in Annex XL of the Regulation. This obligation applies to contracts signed after December 19, 2023. For contracts signed before this date, the clause must be added by January 1, 2025, for any future execution.

Additionally, at the end of 2024, the EU Council adopted a 15th package of restrictive measures on Russia. To address sanctions evasion via maritime transport, 52 non-EU vessels identified as part of the "shadow fleet" have been added to the sanctions list. To protect European companies, the EU has banned the recognition of Russian court rulings within its jurisdiction, shielding businesses from unfair penalties. Additionally, derogations for central securities depositories (CSDs) allow limited unfreezing of cash balances to meet legal obligations. Lastly, the Council has urged EU operators to fully wind down their business operations in Russia. Extended deadlines for divestment have been granted on a case-by-case basis to enable an orderly exit process, discouraging new investments while allowing existing businesses to disengage responsibly.

Considering Trump’s victory, the EU is being compelled to reassess its approach to strategic autonomy through a more pragmatic geopolitical lens. This shift, though expected, has influenced the appointment of Commissioners, with a clear focus on bolstering European defense and strengthening its defense industry. European rearmament will likely drive significant technological advances, and the urgency for Europe to safeguard its own technologies is set to grow, affecting both military and dual-use export controls. We can anticipate the EU aligning its trade policy to support defense industry objectives, likely expanding trade-restrictive measures in the process.

US Developments 

U.S. approach to Russian sanctions enforcement entails two categories of international sanctions, known as “primary” and “secondary” sanctions.  

Primary sanctions are economic restrictions that require compliance from persons within the issuing country (the U.S. In this case) Therefore, U.S. primary sanctions generally apply to any transactions that have an U.S. nexus to the United States’ jurisdiction, this includes:​  

  • U.S. citizens and permanent residents (located anywhere in the world)​  
    • Persons of any nationality that are physically located in the U.S. ​  
    • Entities that are organized in the U.S.​  
    • Entities incorporated in the U.S. (along with any foreign branches)​  
    • Transactions that are processed via the financial system of the United States and any transactions in U.S. dollars. ​  
  • Secondary sanctions are economic sanctions issued against foreign companies or individuals that are trading with countries subjected to primary sanctions (Russia). Essentially, this means that third parties that are not based in or citizens of an issuing country (the U.S.) face penalties for doing business with the targets of the issuing country’s sanctions regime. ​  

In 2024, the United States significantly escalated its sanctions against Russia, also focusing on secondary sanctions and tightening restrictions on financial institutions. These measures, part of a broader strategy to isolate Russia’s economic and military infrastructure, have marked a new phase in the geopolitical confrontation stemming from Russia’s ongoing actions in Ukraine. The year has seen an unprecedented level of international coordination, targeting both direct and indirect enablers of Russian economic and military capacities.

Executive Order 14114 of December 22, 2023 “Taking Additional Steps With Respect to the Russian Federation’s Harmful Activities” adds additional measures.  The Executive Order empowers the Secretary of the Treasury (in consultation with other departments such as State and Commerce) to impose specific sanctions on foreign financial institutions facilitating or conducting significant transactions for designated individuals or entities. This also includes activities such as the sale, supply, or transfer of specific items to Russia, either directly or indirectly.

These measures effectively barred these institutions from the global dollar system, forcing the Moscow Exchange to halt trading in U.S. dollars, euros, and even the Hong Kong dollar. The ripple effects have been significant, further fragmenting Russia’s currency markets and leaving the Chinese yuan as one of the few viable trading options. However, even yuan transactions face potential disruption as Chinese banks risk secondary sanctions if they continue dealings with sanctioned Russian entities. This isolation has necessitated a bifurcation of Russia’s currency market into sanctioned and non-sanctioned segments, creating parallel exchange rates and complicating international trade.  

Another defining feature of U.S. sanctions in 2024 has been the aggressive application of sanctions against non-U.S. entities facilitating Russia’s evasion tactics. Notably, Washington sanctioned over 400 entities and individuals for their roles in supporting Russia’s military capabilities. These sanctions have extended beyond Russian borders, focusing on entities in third-party nations, such as China and India, that supply critical technology and materials to Russia.

The events of 2024 illustrate the evolving nature of U.S. sanctions policy and its growing emphasis on extraterritorial enforcement. By targeting both direct participants and enabling networks, the U.S. has demonstrated its resolve to disrupt Russia’s economic and military capabilities. However, these measures also underscore the complexities of a globalized economy, where indirect links and transshipment points create loopholes that require constant vigilance.

Trade war on semiconductors and chips 

After decades of being treated as another commodity, semiconductors have moved to the forefront of the supply chain discussions in the past decade. An increasing reliance on chip technology in different sectors has led to a growing trade war between the US and China, with repercussions on other jurisdictions. During 2024, the UK, France, Spain, the Netherlands and Japan have imposed autonomous (unilateral) export controls on specific advanced technologies and materials, extending beyond the EU Dual-Use Regulation and international regime-based controls.  

Unilateral export control on relevant items from EU member states 

The Netherlands has recently introduced unilateral export controls on advanced technologies, joining other EU member states in a growing trend of national-level restrictions. On October 18, 2024, the Dutch government announced new controls for exports of certain emerging technology items, set to take effect on December 1, 2024. These measures, implemented through the Dutch Regulations Supplemental Controls to the Dual-Use Regulation, focus on sensitive technologies in the semiconductor, quantum, and additive manufacturing sectors.  

The Dutch export control measures include a licensing requirement for exporting "Unilaterally Controlled Items" to destinations outside the EU. These measures follow a country-neutral approach, meaning they apply to all non-EU destinations. Additionally, the introduction of the National General Export Authorization NL900 aims to alleviate some of the burdens on exporters. The rationale behind these controls is to prevent Dutch goods from being used for undesirable purposes, avoid creating long-term strategic dependencies, and maintain Dutch technological leadership.

The proliferation of unilateral controls creates a complex "patchwork" of regulations for exporters to navigate. This situation underscores the need for improved EU coordination on export controls, as highlighted in the European Economic Security Strategy of June 2023.  

US foreign direct product rules on the relevant items 

The Foreign Direct Product (FDP) rule has long been a cornerstone of U.S. export controls, ensuring that American-origin technology and intellectual property are safeguarded from adversarial use. In 2024, the Biden administration continued to expand the rule's scope, targeting advanced semiconductor manufacturing and high-performance computing to limit technological advancements in China.  

The FDP rule gives the U.S. government the authority to restrict foreign-made products that incorporate American technology or software. Initially applied to entities like Huawei, the rule has been extended to broader categories of semiconductor and supercomputing technologies. It operates under the Export Administration Regulations (EAR), targeting products made using U.S.-originated intellectual property.

Since 2022, the rule’s application was refined through additional classifications and stricter parameters. Two notable sub-rules have emerged: the Advanced Computing FDP Rule and the Supercomputer FDP Rule, each addressing specific technological domains.

The Biden administration’s recent amendments to the FDP rule introduced additional restrictions on semiconductor manufacturing tools and related technologies. Key elements include:

  • Expanded Product Classifications: Equipment and software embedding U.S. technology are now more broadly categorized, effectively closing loopholes. 
  • Lower Thresholds for U.S. Content: Foreign-produced goods incorporating minimal U.S. technology now fall under stricter export controls. 
  • Additional Chinese Entities Added to Restricted Lists: Over 120 companies, including fabs, toolmakers, and providers of electronic design automation (EDA) software, are set to face licensing requirements, likely to be denied. 

The Advanced Computing FDP Rule, under EAR 734.9(h), governs the export of electronics, computing, and telecommunications products with a focus on semiconductor manufacturing tools from firms like ASML and Tokyo Electron. It applies to items derived from U.S.-origin technology, those meeting specific performance parameters under ECCNs 3A090 or 4A090, and goods produced in foreign facilities relying on U.S. technology. The rule is triggered if the items are known to be destined for China (PRC) or Macau, will be incorporated into non-EAR99 components for these regions, or used in the production of advanced integrated circuits for entities headquartered there. Similarly, the Supercomputer FDP Rule, under EAR 734.9(i), targets foreign-made items integral to China’s supercomputing capabilities, which are vital for fields like artificial intelligence and military advancements. The rule applies to products that are outputs of U.S. technology or made in facilities using such technology, with known end uses in the design, production, or operation of supercomputers in China or Macau, or for incorporation into parts destined for these supercomputers.

All of these rules aim to limit China's access to advanced computing and supercomputing technologies by regulating the global supply chain of critical components and leveraging U.S. technological influence.

China’s measures on raw materials often used in semiconductors and chips 

China is the biggest global source of gallium and germanium, which are produced in small amounts but are needed to make computer chips for mobile phones, cars and other products, as well as solar panels and military technology.

During 2024, China has enacted bans on exporting key materials like gallium, germanium, and antimony, crucial for semiconductor manufacturing and military applications. These measures exacerbate supply chain vulnerabilities and hinder technological advancements outside China. With graphite as a primary material for EV batteries, stricter export controls on this resource could significantly impact EV production globally.

US-China trade war  

Trade war between US and China goes beyond the one on semi-conductors. The year 2024 marked a significant escalation in the United States' economic measures against China, as tariffs, sanctions, and export controls evolved to address pressing concerns over forced labor, national security, and China's growing technological ambitions. These tools highlight a broader strategy to curtail China's economic and technological rise while reinforcing U.S. policy objectives globally. Meanwhile, China replied with a new export control regulation and specific measures against the U.S.

US tariffs, sanctions and export control rules targeting China 

In 2024, the Biden administration, build upon Trump’s administration policy towards China, and reinforced its commitment to tariffs as a key tool in countering what it labeled as unfair Chinese trade practices. The year commenced with President Joe Biden announcing new tariffs under Section 301 of the Trade Act of 1974, targeting Chinese imports in sectors such as semiconductors, solar cells, electric vehicle (EV) batteries, and EVs, for example, EV tariffs increased from 25% to 100%. While the additional tariffs affect a modest $18 billion worth of imports due to pre-existing high duties and the U.S.' minimal reliance on Chinese EVs, the move aligns with broader concerns about Chinese subsidies.

Notably, new tariffs are still being introduced, with the latest round set to into effect on January 1st, 2025. These tariffs Chinese solar wafers and polysilicon, with rates increasing from 25% to 50%, and a 25% duty was levied on tungsten products. These measures are seeking to bolster the competitiveness of U.S. clean energy industries against Chinese counterparts.

The Biden administration maintained Trump-era tariffs covering approximately $370 billion worth of Chinese goods, including electronics and machinery. Despite ongoing debates among U.S. businesses and policymakers about the economic costs, these tariffs remained central to U.S. trade policy, reinforcing a broader strategy of economic decoupling and confrontation.  

In 2024, the United States significantly intensified its efforts to combat forced labor linked to China's Xinjiang Uyghur Autonomous Region (XUAR). These developments marked a pivotal year in the enforcement of the Uyghur Forced Labor Prevention Act (UFLPA) and reflected the U.S. government's commitment to ensuring ethical supply chains. A key milestone occurred in November 2024 when the Department of Homeland Security (DHS) expanded the UFLPA Entity List by adding 29 new entities. This brought the total number of companies and organizations subject to import restrictions to 107.

In July 2024, the Forced Labor Enforcement Task Force (FLETF) released an updated strategy for implementing the UFLPA. The revised strategy broadened the scope of enforcement by identifying additional high-risk sectors, including polyvinyl chloride (PVC), aluminium, and seafood originating from the XUAR. This update was designed to enhance oversight and ensure that a wider range of products linked to forced labor practices could be scrutinized and detained at U.S. ports.

As 2024 ended, the U.S. government’s actions sent a strong message to the global community: ethical supply chains are not optional. The intensified measures under the UFLPA signal a continued resolve to address human rights abuses and ensure that American consumers are not complicit in forced labor practices through the goods they purchase.

Trump’s strict position against China suggests a tightening of these measures In comparison, EU controls remain limited, primarily covering general dual-use and military items, along with a smaller set of member state-specific sanctions. However, the indirect impact of U.S. extraterritorial sanctions on businesses operating in both the EU and China cannot be overlooked, with far-reaching implications for trade and compliance.

China’s new export control regulations and strict measures introduced against the U.S. 

The global trade landscape is also shifting once again with the introduction of China's new export control regulations, which already took effect since December 1, 2024. Announced as Order No. 792, these rules signify Beijing’s commitment to safeguarding national security and interest in an ever more complex geopolitical context. The far-reaching implications extend beyond China’s borders, creating a ripple effect across industries reliant on Chinese-origin goods and technologies. At its core, the regulation redefines how China controls the export of dual-use items—goods and technologies with both civilian and military applications. Until now, China utilized a simpler HS Code-based system for control. However, with the recent changes, China is transitioning to an approach more similar to the EU and US models. Perhaps the most striking feature is its extraterritorial application. Foreign companies handling Chinese-origin dual-use items could be compelled to align with these rules, even when operating outside China's borders. This adds a layer of complexity for global businesses involved in supply chains that incorporate Chinese technologies. Unlike the U.S. Export Administration Regulations (EAR), which apply the "de minimis" rule generally to all foreign products, Article 49 explicitly references only "dual-use items" produced abroad. However, it remains unclear whether the term "dual-use items" is limited to those defined under China’s control lists or if it might extend to items categorized as "dual-use" under the laws of the manufacturing country. The prevailing interpretation suggests that the scope of "dual-use items" in Article 49 likely aligns with China’s control lists. The extraterritorial provisions in Article 49 are broadly worded and lack specificity regarding application scenarios or thresholds for controlled content within a final "dual-use item." For instance, if a high-volume consumer product such as an electric vehicle or a laptop includes Chinese-controlled rare earth elements in its motor or Chinese-controlled materials in its display components, it remains uncertain whether the motor, display, or the entire product would necessitate an export license from the Chinese government. Moreover, the conditional language of Article 49, stating that China "may" require compliance with its regulations rather than mandating it unequivocally, introduces further ambiguity.

Moreover, on December 3rd, The Ministry of Commerce of China (MOFCOM) that official published an Announcement on Strengthening Export Control of related dual-use items to the United States, which effective as of the date of publication.​

The main clauses in the measures:​

  • Prohibits the export of certain dual-use items to U.S. military users or for military use.​ 
  • in principle, the export of dual-use items related to gallium, germanium, antimony, and superhard materials to the US will not be permitted. (Policy of denial)​ 
  • for the export of dual-use items of graphite to the US, a stricter end-user and end-use review will be implemented.​ 

Besides, China will take enforcement actions on diversion. Any party who transfers the above items originated from China to the US would be penalized.​

Middle East developments  

The year 2024 proved to be pivotal for the Middle East, marked by significant conflict, humanitarian challenges, and major geopolitical developments. Key events included the ongoing conflict in Gaza, Tehran’s missile strikes on Israel, and the fall of the Assad regime in Syria. These developments have collectively influenced the region's sanctions framework.

The situation in Israel 

Following the attack by Hamas in Israel on October 7, 2023, the humanitarian situation in the Gaza Strip has worsened due to the ongoing conflict and Israeli military operations. This situation also showed its impact on export control restrictions during 2024.

On February 12, 2024, the Court of Appeal in The Hague rendered a decision in a preliminary injunction by Oxfam Novib et al. against the State regarding the transit and export of F-35 parts from the Netherlands to Israel. The Court of Appeal has ruled that no later than seven days after the service of the judgment, any (actual) export and transit of F-35 parts destined for Israel must be ceased. Given the judgment of the Court of Appeal, it is no longer permitted from February 20, 2024, to transit or export F-35 parts from the Netherlands to Israel. In this regard, the Regulation amending the General Regulations transit permit NL007 and the General Permit NL009 Regulations for the restriction of the scope of these authorisations was published in the State Gazette No. 5435. on February 19, 2024. In the amendments:

  • Article I states that “Transit consignment of military goods is not permitted if it is established that it is final destination Israel, in so far as those goods fall within the framework of the F-35 Lightning II program.” 
  • Article II states that “Transit and export of goods within the framework of the F-35 Lightning II program is not permitted if it is established that this final destination is Israel.” 
  • Article III states that these regulations have become effective as of 20 February 2024.  

New situation in Syria 

In 2024 there was also an important development regarding the situation in Syria. Syria's political landscape has undergone a shift with the fall of President Bashar al-Assad's regime on December 8, 2024, following a swift offensive by opposition forces. The collapse of the Assad government has prompted a reassessment of sanctions imposed on Syria, with international actors weighing their potential recalibration.

The European Union has outlined conditions for lifting its sanctions, requiring guarantees from Syria’s interim government for an inclusive political future that ensures the participation of all minority groups. EU nations are also seeking assurances that extremist factions and former allies such as Russia and Iran will play no role in shaping Syria’s future. Additionally, the EU is exploring a phased approach to easing sanctions, potentially offering targeted relief aimed at fostering economic recovery and improving civilian well-being. A UN envoy has called for a swift end to Western sanctions, highlighting the importance of assisting the country's new leadership and fostering rebuilding efforts. These sanctions have had a profound effect on humanitarian operations, complicating access to essential goods and hindering financial transactions, which has exacerbated civilian suffering. The dire economic conditions in Syria, including food shortages and rising prices, have intensified calls to ease sanctions as a means of promoting economic recovery and stability.

In the United States, the Caesar Syria Civilian Protection Act of 2019 is set for extension. However, the U.S. president holds the authority to waive many of these sanctions, provided that certain conditions—triggered by Assad’s fall—are met. Especially considering, two U.S. lawmakers have called for the suspension of some sanctions to alleviate the strain on Syria’s devastated economy. Reflecting potential policy shifts, the U.S. has dispatched a diplomatic delegation to Syria, engaging in discussions with groups in Syria regarding governance structures.

Expectations for Syria in 2025 remain uncertain as the country works toward recovery and stabilization. Key factors include efforts to build an inclusive government, address economic and humanitarian challenges, and potential changes to international sanctions.

Looking Forward

The year 2024 was marked by significant activity in global trade regulations, including export controls, sanctions, tariffs, and related requirements. Looking ahead to 2025, a second Trump administration might revise U.S. support for Ukraine; however, the U.S., U.K., and EU are likely to continue using sanctions as a primary tool to pressure Russia. These measures aim to restrict Russian revenue, decrease allies' dependence on Russian resources, and address sanctions evasion while maintaining global market stability. Coordination on enforcement actions, targeting, licensing decisions, and intelligence sharing is also expected to remain strong. Sanctions enforcement is likely to remain a key focus for a Trump administration, with similar priorities in the EU and U.K., supported by recent legal reforms to enhance enforcement capabilities.

Regarding China, a second Trump term would likely bring economic actions such as tariffs, stricter export controls, and targeted sanctions to manage U.S.-China relations. However, the extent of U.S. alignment with EU, U.K., or other allied policies remains uncertain. In response, China, as a growing leader in manufacturing advanced technologies and a key exporter of raw materials, has increasingly countered U.S. measures with its own assertive actions.

The U.S. has long extended sanctions to activities outside its borders when they involve the U.S. financial system or lead to violations by U.S. persons. Secondary sanctions, which target non-U.S. entities with no direct U.S. connections, remain a significant element of sanctions programs against Russia and Iran. Similarly, the U.K. and EU are broadening their sanctions frameworks and exploring extraterritorial measures, signaling a continued trend toward expanding the scope of sanctions jurisdiction.

In a broader context, the second Trump administration would continue its aggressive stance on reshaping global trade, leveraging tariffs and economic pressure to secure more favorable terms for the United States. One of the most notable approaches would be the expansion of punitive tariffs, as exemplified by the President's demand that the European Union purchase more U.S. oil and gas or face tariffs. This approach of using tariffs as leverage to influence trade balances could extend beyond the energy sector, impacting industries ranging from automobiles to agriculture. In addition, Trump’s efforts to gain more control over strategic resources were evident during his administration’s attempt to obtain greater influence over Greenland, signaling his broader interest in strengthening U.S. economic influence in key geopolitical areas.

While traditional allies such as Canada and Mexico would have expected stability under free trade agreements like United States–Mexico–Canada Agreement (USMCA), a second term under Trump could see continued friction. The first Trump administration's imposition of tariffs on these countries, despite existing trade deals, demonstrated Trump's willingness to challenge established agreements if he perceived them as unfavorable to American interests. As a result, global trade could face increased unpredictability and tensions, with the U.S. focusing on exerting pressure on partners and allies to meet its terms. The future of global trade under a second Trump presidency remains uncertain, but one thing is clear: the U.S. will likely take a more assertive, transactional approach in negotiations, prioritizing its economic interests above traditional alliances.

As trade regulations become more complex, businesses face rising compliance costs and operational burdens. Regulatory and enforcement bodies worldwide increasingly rely on the private sector as the first line of defense in implementing these measures. To meet these growing challenges, organizations must proactively assess risks and enhance their compliance strategies to adapt to the evolving regulatory environment.

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