Trump Calls for Study of Export Control Loopholes, Orders Regulatory Freeze
President Donald Trump took several steps during his first day in office to reverse, delay or scrutinize trade- and sanctions-related actions introduced by the Biden administration, ordering agencies to study existing export controls for possible loopholes, consider changes to outbound investment restrictions, or possibly postpone some of Biden’s recently issued rulemakings. Trump also revoked a sanctions authority that had targeted Israeli settlers in the West Bank and previewed plans to step up sanctions against drug cartels.
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One memorandum on trade policy calls on the Commerce and State departments, along with other agencies that oversee export controls, to review the existing U.S. export control system and “advise on modifications in light of developments involving strategic adversaries or geopolitical rivals as well as all other relevant national security and global considerations.”
It specifically asks Secretary of State Marco Rubio, who was sworn in Jan. 21 (see 2501210003) and the incoming commerce secretary -- expected to be nominee Howard Lutnick -- to make recommendations to Trump about how to bolster America’s “technological edge.” It also said both should pinpoint and eliminate “loopholes in existing export controls -– especially those that enable the transfer of strategic goods, software, services, and technology to countries to strategic rivals and their proxies,” and recommend changes to export control enforcement policies and practices.
The memo said that could include improvements to “enforcement mechanisms to incentivize compliance by foreign countries, including appropriate trade and national security measures.”
Another section of the memo orders the Treasury secretary, expected to be nominee Scott Bessent, to work with other agencies to review the Biden administration’s regulations that either prohibit or require notifications for certain outbound investments in China. Trump said those agencies should look into whether Biden’s 2023 executive order on outbound investment (see 2308090066) “should be modified or rescinded and replaced,” and whether Treasury’s outbound investment final rule (see 2410280043) “includes sufficient controls to address national security threats.”
The Treasury secretary will “make recommendations based upon the findings of this review, including potential modifications to the Outbound Investment Security Program,” the memo said.
Reports on recommendations involving U.S. export controls and outbound investment restrictions are due to Trump by April 1.
Researchers have said Trump is likely to build on the outbound investment restrictions, including by capturing additional Chinese technology sectors beyond the country’s semiconductor, artificial intelligence and quantum sectors (see 2411150037).
Another order calls on federal agencies to withdraw any Biden rulemaking that hasn’t yet been officially published in the Federal Register while also placing a “regulatory freeze” on certain rules that have been published but haven’t yet taken effect. All rules that haven’t yet taken effect could face a two-month delay, or longer, as the new administration studies whether they should be revised.
During that initial 60-day delay, Trump said federal agencies should “consider opening a comment period to allow interested parties to provide comments about issues of fact, law, and policy raised by the rules postponed under this memorandum, and consider reevaluating pending petitions involving such rules.” Agencies also can “consider further delaying” certain proposed rules “rules beyond the 60-day period.”
It’s unclear how the order will impact the series of export control rules issued last week by the Bureau of Industry and Security. One of those rules placed new, worldwide export controls on advanced computing chips and certain closed artificial intelligence model weights (see 2501130026), while another imposed a broader license requirement for chip foundries and packaging companies exporting certain advanced chips (see 2501150040). The rules took effect Jan. 13 and Jan. 16, respectively, although they said exporters and other companies didn’t have to begin complying with certain restrictions until later this month and others until May or next year.
Spokespeople for the White House and BIS didn’t comment.
Another measure revokes Biden’s executive order last year that authorized sanctions against "foreign persons," including Israelis, responsible for an increase in violence against Palestinians in the West Bank (see 2402010053). Biden had used the order to levy several rounds of sanctions against Israeli citizens and organizations for harming or displacing Palestinians living in the region (see 2411180010, 2407110018 and 2408280023) following the October 2023 terrorist attack in Israel by Hamas.
Trump also issued an executive order that calls on the State Department to work with other agencies to recommend that certain drug cartels be labeled as Foreign Terrorist Organizations and/or Specially Designated Global Terrorists, which would subject them to certain trade restrictions and sanctions.
The order said cartels in Mexico are a threat to American safety, and “their activities, proximity to, and incursions into the physical territory of the United States pose an unacceptable national security risk to the United States.” It also specifically calls out Venezuela-based Tren de Aragua (see 2407110013) and the international criminal gang MS-13, which already are subject to certain U.S. sanctions.
Recommendations on those designations are due within 14 days of Jan. 20.