Amid rising U.S.-China technology competition, Congress will continue to push for increased restrictions on inbound Chinese investment, said Rep. Darin LaHood, R-Ill. LaHood also said the Trump administration -- which has experienced success using tariffs and export controls to gain ground in trade negotiations -- will likely continue to leverage those measures, particularly against China.
The Commerce Department will officially amend the Export Administration Regulations June 18 to allow U.S. companies to more easily participate in standards setting bodies in which Huawei is a member, the agency said in a notice. Commerce, which previously announced details of the measure (see 2006150062), is seeking comments on the revision, which will allow the release of certain technology to Huawei and its affiliates on the Entity List if that release is in the context of a standards-setting body and not for commercial purposes. Comments are due Aug. 17.
The Commerce Department's Bureau of Industry and Security announced a new set of export controls on certain cultivation chambers and chemicals (see 2005150048). The controls, agreed to by the Australia Group during a February meeting, restrict the sales of certain “rigid-walled, single-use” cultivation chambers and precursor chemicals, along with the “Middle East respiratory syndrome-related coronavirus,” or MERS. The final rule, which takes effect June 17, falls under BIS's effort to restrict sales of emerging technologies (see 2005190052), as mandated by the 2018 Export Control Reform Act, the agency said.
The Directorate of Defense Trade Controls expects to increase its end-user checks on sensitive defense exports after the transfer of gun export controls from the State Department to the Commerce Department was finalized earlier this year, the agency said. The transfer -- which placed Commerce in charge of export controls for firearms, ammunition and other defense items -- will free up DDTC to conduct more thorough post-shipment checks as part of its Blue Lantern process, the agency’s end-use monitoring program.
The Commerce Department’s increased restrictions on shipments to military end-users is causing widespread confusion and could cripple exporters struggling to survive during the global COVID-19 pandemic (see 2005010037), industry groups said. The Bureau of Industry and Security's April 28 final rule (see 2004270027), set to take effect June 29, is too complex and was released with “poor” timing and without industry input, the National Customs Brokers & Forwarders Association of America said.
Companies operating in Hong Kong and mainland China should be reviewing their portfolios in preparation for increased U.S. export controls, which could impact a wide range of global firms, a Mayer Brown trade lawyer said. Aside from sanctions against Chinese officials for interference in Hong Kong’s autonomy, the U.S. is likely to align export control policies for Hong Kong with its policies toward mainland China, creating a significantly more restrictive trade environment, the lawyer said.
President Donald Trump issued an executive order authorizing sanctions and visa restrictions against the International Criminal Court for “harassment” and “abuse” of officials of the U.S. government and its partner governments. The order, issued June 11, authorizes the State Department and the Treasury Department to sanction any person who works with the ICC to investigate, detain, arrest or prosecute any U.S. or partner government’s “personnel” without consent from that person’s national government. The order also authorizes sanctions against people who provide the ICC support, including the provision of goods and services. An ICC spokesperson said the court is aware of the sanctions and is still reviewing the order.
Lawmakers introduced legislation this week to incentivize U.S. semiconductor manufacturing and provide more federal support for research and development. The bill includes refundable investment tax credits, a $10 billion federal match system to match state and local incentives, and the establishment of a new semiconductor program within the Commerce Department.
U.S.-China technology competition and the Trump administration’s restrictions on Huawei have likely dashed the prospects of a phase two trade deal, China experts said. The experts also agreed that the phase one purchase agreements are unlikely to be met, even as the U.S. trade representative continues to tout progress on Chinese purchase commitments (see 2005210036).
The State Department may introduce more measures to help industry mitigate the impacts of the COVID-19 pandemic, including more license extensions or fee reductions, an agency official said. The agency is considering more measures after lowering certain fees and extending licensing deadlines in April (see 2004240017), which was received positively by companies, said Mike Miller, the State Department’s deputy assistant secretary for defense trade.