Commercial Awareness Digest - 31st October 2025

A development in US-China relations

By Esme Glover

The recent summit in South Korea has marked a significant development in the ever-evolving relationship between the United States and China. Most notably, the two leaders reached a one-year trade and tariff agreement, signalling a temporary easing of tensions that had escalated earlier this year. President Xi Jinping emphasised the need for both nations to “take a long-term view…” in shaping their economic and diplomatic strategies.

One of the most critical issues addressed at the summit concerned rare earth elements. Earlier this month, China had tightened their export controls on rare earths where they dominate the market, processing around 90% of the world’s supply. This was used predominantly as a bargaining chip in maintaining China’s power in the struggle against Donald Trump’s tariffs which had significant implications for China. At the summit, China agreed to suspend their previous export controls in return for reduced export controls on the US side. This is positive news for international businesses that are reliant on critical minerals, particularly in the technology and renewable energy sectors. One of the legal impacts is that lawyers may face increased advisory work in these sectors as businesses navigate these new geopolitical

developments.

Another area of negotiation focused on the fentanyl crisis in the United States. The precursor chemicals used to produce fentanyl have been traced back to manufacturers in China. The two leaders agreed to cooperate on this matter, as Trump agreed to lower the fentanyl tariff, previously at 20% to 10%, in return for Xi’s efforts to strengthen regulatory measures to restrict the exports of precursors. This may mark an increase in required due diligence and supply chain monitoring for life sciences companies, in response to stricter regulatory regimes.

Restructuring and Insolvency: The Pizza Hut Example

By Zuha Malik

When companies face serious financial trouble, two legal processes often come into play: insolvency and restructuring. Insolvency occurs when a business can no longer pay its debts or its liabilities exceed its assets - essentially, it runs out of liquidity or value. Restructuring, on the other hand, focuses on avoiding that outcome; it involves renegotiating debt, selling assets or even changing how a company is financed so that it can keep operating instead of collapsing.

These areas matter because corporate distress doesn’t just only affect shareholders but has this ripple effect through to employees, creditors, suppliers and entire local economies. Directors must balance their duties to creditors with attempts to rescue the business and lenders often prefer a managed recovery to a messy collapse. Lawyers are central to managing that tension, advising on everything from refinancing negotiations to formal insolvency procedures.

In 2025, that expertise is in renewed demand! This is due to persistent inflation and higher borrowing costs which have driven UK company failures to their highest levels since 2009, according to the Insolvency Service. Law firms are seeing a surge in work as clients seek ways to restructure their finances or, if rescue is impossible, enter insolvency while preserving value.

A recent example is Pizza Hut UK, whose operator, DC London PIE, entered administration earlier this month. The company appointed FTI Consulting as administrators, advised by Shoosmiths, while Linklaters represented Yum! Europe, which acquired the remaining viable outlets in a pre-pack administration - a process where a sale is arranged before formal insolvency proceedings begin. The deal saved hundreds of jobs and allowed the Pizza Hut brand to continue trading, showing how lawyers coordinate multiple stakeholders under intense time pressure.

In a pre-pack, administrators gain control of the company and a statutory moratorium halts creditor action. Lawyers for buyers, sellers as well as lenders negotiate complex documentation to ensure continuity and manage employee transfers, including allocating risk. The Pizza Hut transaction captures why restructuring and insolvency work is so commercially significant: blending areas like finance and crisis management to turn potential collapses around.

Edited by Artyom Timofeev