Export Compliance Daily is providing readers with some of the top stories for June 10-14 in case they were missed.
Broadcom expects its semiconductor business to take a $2 billion revenue hit from the U.S.-China trade war, including the Trump administration's "Huawei export ban,” CEO Hock Tan said on a fiscal Q2 call June 13. The trade frictions are “creating economic and political uncertainty and reducing visibility for our global OEM customers,” he said. “Demand volatility has increased and our customers are actively reducing inventory levels to manage risks.” The $17.5 billion in semiconductor revenue Broadcom now expects in the fiscal year ending in February will translate into a year-over-year decline in the high single-digits, Tan said. Huawei generated about $900 million of revenue for Broadcom last year, but the market softness that prompted the company to shave $2 billion off its semiconductor revenue forecast “obviously extends beyond just one particular customer,” Tan said. “We're talking about uncertainty in our marketplace,” and that’s causing “compression” in the supply chain that’s reducing orders, he said. “It's broad-based.” With the revised forecast, “we tried to capture everything” in the business “environment,” including the impact of the proposed List 4 tariffs on Chinese goods, Tan said. The environment “is very, very nervous, and that's why we see a very, very sharp and rapid contraction of the supply chain and orders out there from our customers,” he said.
Senate Intelligence Committee Vice Chairman Mark Warner, D-Va., and Sen. Marco Rubio, R-Fla., urged President Donald Trump's administration on June 13 not to use U.S. restrictions on Huawei as a “bargaining chip in trade negotiations” with China. The Commerce Department's Bureau of Industry and Security issued a notice adding Huawei and affiliates to a list of entities subject to export administration regulations beginning May 16 (see 1905160072). BIS issued a general license temporarily allowing certain transactions by Huawei and the affected affiliates through Aug. 19. Trump later said sanctions against Huawei could be part of trade negotiations with China.
Export Compliance Daily is providing readers with some of the top stories for June 3-7 in case they were missed.
Panelists warned against increasingly strict export controls and criticized the Trump administration's handling of the Huawei blacklisting during a June 4 Senate Committee on Banking, Housing and Urban Affairs hearing on “Confronting Threats From China: Assessing Controls on Technology and Investment, and Measures to Combat Opioid Trafficking.” The U.S. is drawing dangerously close to shrinking markets for U.S. semiconductor exporters, the panelists said, a move that could prove devastating for the industry. They also suggested the Trump administration’s restrictions on Huawei are too broad and have hurt U.S. exporters as well as damaged trade talks between the two sides.
Export Compliance Daily is providing readers with some of the top stories for May 28-31 in case they were missed.
The temporary general license issued by the U.S. after it added Huawei Technologies to its Entity List has offered “almost no relief” for the U.S. semiconductor industry, which has been hurt severely by the move, said John Neuffer, president and CEO of the Semiconductor Industry Association. Speaking on U.S.-China trade issues at a Washington International Trade Association discussion on May 29, Neuffer underscored the importance of the Chinese market to U.S. semiconductor exporters and called on the Trump administration to more tactfully negotiate with China. “We would like the U.S. government to better balance its national security concerns with its economic security concerns,” Neuffer said.
The Department of Commerce published its spring 2019 regulatory agenda for the Bureau of Industry and Security. The agenda continues to mention an upcoming a long-awaited proposed rulemaking involving parties’ responsibilities under the Export Administration Regulations in a routed export transaction, saying the proposal will be published in May 2019. Sharron Cook, a senior policy export analyst for BIS, said in April the rule change will help solve some of the bigger frustrations with the current regulations faced by export forwarders (see 1904170064). BIS is aiming to issue the proposal in May, it said.
The Commerce Department’s Bureau of Industry and Security is adding five new national security-related technologies to the Export Administration Regulations’ Commerce Control List, according to a notice in the Federal Register. The additions stem from changes made to the Wassenaar Arrangement’s List of Dual-Use Goods and Technologies agreed to during the 2018 Plenary meeting, the notice said. The changes add “recently developed or developing technologies” that are “essential” to U.S. national security: “discrete microwave transistors,” “continuity of operation software,” “post-quantum cryptography,” “underwater transducers designed to operate as hydrophones” and “air-launch platforms.” The notice is scheduled for publication and the changes take effect on May 23.
Sen. Josh Hawley, R-Mo., introduced a bill, the China Technology Transfer Control Act of 2019, on May 14 that would increase controls on “national interest technology” exports to China and allow the U.S. to sanction people or entities that violate the controls. In a press release, Hawley’s office said the bill “places all ‘core technologies’ from China’s ‘Made in China 2025’ strategy on the Department of Commerce’s Export Control List.” The core technologies include 15 products, the release said, such as “artificial intelligence, robotics, semiconductors, advanced construction equipment and lithium battery manufacturing.” “For too long, China has exploited American innovation to undermine our values and threaten our security,” Hawley said in a statement. “This legislation is an important step toward keeping American technology out of the hands of the Chinese government and its military.”