Global trade tensions, especially those tied to U.S. tariff policy, continue to create uncertainty for employers. While the United States has scaled back some of the higher tariff rates it previously implemented on Chinese goods, many duties still remain. Although China has felt an impact from the tariffs, and responded with reciprocal measures, the Chinese government has not introduced new employee protections in response to the tariff dispute. On 4 November 2025, the United States announced an extension on the pause of higher reciprocal tariffs for imports from China, which is set to expire on 10 November 2026. This signals ongoing unpredictability surrounding trade relations between the two countries.

Mexico, which sends around 80 percent of its exports to the United States, has also experienced fallout from the tariffs. On 4 March 2025, a 25 percent ad valorem tariff on Mexican goods went into effect on products that do not qualify under the United States-Mexico-Canada Agreement (USMCA). Tariffs on specific sectors like steel, aluminium, and energy products also apply. In July, the U.S. administration announced it would raise the ad valorem tariff to 30 percent, effective 1 August, as a means to compel Mexico to bolster its efforts to stop the flow of fentanyl into the United States. That tariff was paused for 90 days, and suspended again in late October for an additional “few weeks.”

This instability has affected Mexico’s exports, particularly the automotive sector. Some investors have pulled back or delayed expansion plans, leading to business closures and layoffs in some regions. Despite this, the country remains in a period of relative stability following several years of significant labor reforms, and the government has not yet implemented new employment law changes in response to the tariffs or trade tensions.

Some countries are responding to economic uncertainty by focusing on recovery efforts or introducing measures that protect employees in the workplace. In Italy, notice and consultation requirements for large-scale dismissals in business or workforce closure situations have continued to contribute to reduced redundancies, supported by a relatively resilient economy. In addition, an October 2025 law grants new authority to the government to reform pay and collective bargaining frameworks, signaling further potential changes for employers.

As well as legislative developments, some changes are being driven by the courts. In July 2025, the Italian Constitutional Court ruled that the previous cap on compensation for unlawful dismissal in small companies (those with fewer than 15 employees) was unconstitutional. The decision will be reflected in legislation, but in the meantime it allows judges to award higher compensation, above the previous three- to six-month limit, making dismissals potentially more costly for affected companies. Until there is further case law, it is unclear what approach the courts will take.

Vietnam’s Employment Law 2025, which took effect 1 January 2026, emphasizes retraining and reskilling as alternatives to terminations, making it more difficult for employers to dismiss workers. Employers are now encouraged, and sometimes required, to offer training and development programs for employees – especially those at risk of redundancy due to technological or market shifts. In practice, many employers will enter mutual termination agreements with employees as an alternative to dismissal, as it will be difficult to comply with the new requirements.

In the Netherlands, recent proposals focus on reducing red tape for employers, such as simplifying CO₂ emissions reporting requirements. The government is also considering relaxing the current prohibition on dismissing employees during their first two years of sickness absence for small- and medium-sized employers, to limit the financial burden and give employers more flexibility as they navigate ongoing economic uncertainty.

Meanwhile, the Indonesian government remains focused on post-pandemic economic recovery and is reluctant to impose additional employment restrictions. There have been no major labor law developments since the current government took office in late 2024, other than in relation to preventing sexual violence in the workplace and safeguarding the rights of victims. However, reforms could emerge in the coming months and years as the administration settles in and sets its policy priorities.

While the United States has not enacted major new employment protections in response to economic uncertainty, employers should remain alert to evolving state and federal requirements, particularly in areas such as mass layoffs (WARN Act compliance), severance, and workforce restructuring.

Some governments are implementing measures to protect their labor markets amid ongoing economic uncertainty and voter concerns about high levels of immigration. The United States has made it more difficult for foreign nationals to be granted skilled worker (H-1B) visas, tightening eligibility criteria in January 2025. As of September 2025, sponsoring employers must submit a US$100,000 supplemental payment with new petitions – a significant increase from previous fees.

The United Kingdom has also tightened its visa rules in an effort to prioritize domestic workers. In July 2025, the government raised the salary threshold for the Skilled Worker visa to £41,700 (US$54,500) per year – a jump from the previous threshold of £38,700 (US$50,600). Employers also face higher sponsorship costs. That same month, the government increased the skill level required for qualifying roles, reducing the number of jobs that are eligible for sponsorship, and imposed more onerous English language requirements for foreign nationals applying for Skilled Worker visas.

Hungary is another country taking a more protectionist approach. In May 2025, the government tightened rules for hiring third-country nationals, defined as those who are not part of European Union (EU) or European Economic Area (EEA) countries. Stricter quotas and additional approval requirements were implemented, making it more difficult for foreign workers to be granted work visas. Applicants must also provide a valid Hungarian residential address at the time of application, a significant hurdle in many cases.