The Commerce Department amended its direct product rule, increasing restrictions on foreign-made chips exported to, and made by, Huawei and its affiliates, the agency said in a May 15 interim final rule. Commerce also said it does not expect to issue another temporary general license extension for the Chinese technology company after its latest 90-day renewal expires Aug. 13.
World Trade Organization members should do more to prevent export restrictions on medical goods and keep medical and food supply chains open, said Zhang Xiangchen, China’s ambassador to the WTO. Zhang also called on more cooperation between WTO members to combat the pandemic, which he said hasn’t materialized and has helped cripple the WTO. “The reason behind the poor performance [of the WTO] is not only due to the nature and the scale of the crisis,” Zhang said during a May 12 webinar hosted by the Asia Society, “but also the lack of leadership and the diminishing trust among members.”
The Treasury Department, the State Department and the Coast Guard issued a May 14 guidance on illegal shipping and sanctions evasion practices by Iran, North Korea and Syria. The guidance aims to help traders in the maritime industry -- including the energy and metal sectors -- avoid doing business with customers trying to avoid U.S. sanctions. The 35-page guidance updates previous shipping advisories, including a guidance on illegal North Korean ship-to-ship transfers (see 1903210052).
China is unlikely to meet its purchase commitments under the phase one deal, due to the COVID-19 pandemic, which could lead to China invoking a force majeure clause and further postponing the prospects of a phase two agreement, China trade experts said. “Given the COVID-19 crisis, the target set in the phase one deal will be very hard to achieve,” Xu Gao, chief economist at Bank of China International, said during a May 13 webinar hosted by the National Committee on U.S.-China Relations.
The Directorate of Defense Trade Controls issued a series of frequently asked questions on May 11 to clarify an International Traffic in Arms Regulations exemption that authorizes exports and other activities made by or for a U.S. government agency.
Amid rising U.S.-China trade tensions, China released a second round of U.S. goods exempt from retaliatory tariffs, according to an unofficial translation of a May 12 Finance Ministry notice. The announcement came one day after a Chinese state news agency said the country is considering invalidating the phase one deal, citing Chinese officials’ frustration with President Donald Trump’s attempt to blame China for the COVID-19 pandemic.
The Commerce and State Department should improve export control guidance for universities, which sometimes struggle to comply with U.S. export regulations because of unclear guidance that is usually tailored toward industry, the Government Accountability Office said May 12. The GAO also said Defense Department officials should better familiarize themselves with export control regulations in order to not hamper university research efforts.
Chinese direct investment in the U.S. last year fell to its lowest levels in a decade and will likely continue to drop this year, according to a May 11 report from the National Committee on U.S.-China Relations and the Rhodium Group. Investment dropped to $5 billion in 2019 from a decade-high of $45 billion in 2016 due to more investment reviews by the U.S., restrictions on outbound investment by Beijing, the COVID-19 pandemic and rising tensions between the two countries, the report said. The decreased investment may be part of a broader trend caused by the pandemic as industry grows concerned about the consequences of over-dependence on foreign supply chains, the report said.
The European Union will launch its new customs pre-arrival security program in March 2021, calling it a “complete overhaul” of its existing customs regime. The program, the Import Control System 2, will collect data on all EU imports before their arrival and will require “Economic Operators” to declare security data through an “Entry Summary Declaration,” according to a May 11 European Commission newsletter. Although the system launches next year, some operators may not have to begin filing those declarations until 2023 or 2024, the newsletter said. The effective date depends “on the type of services they provide in the international movement of goods,” the commission said.
The U.S. needs a clearer strategy for leading 5G and artificial intelligence standards-setting to counter China’s growing tech leadership, technology experts said. The Trump administration should define a strategy and work with allies to set global standards, the experts said, or risk forcing its companies out of global markets because of restrictions placed on China.