Japan is expected to pass a bill to remove South Korea from its so-called "whitelist" of trusted trading partners as the two countries grow more entrenched in their ongoing trade dispute, according to a July 30 report from The Korea Herald.
Japan’s Ministry of Economy, Trade and Industry released a July 24 statement about Japan’s ongoing dispute with South Korea, saying South Korea’s position on “catch-all controls” are “unclear” and criticizing South Korea for continuously postponing “policy dialogue” talks.
An American Enterprise Institute trade scholar says "Japan has chosen a dangerous and destructive mode of retaliation, one that is likely to greatly disrupt global electronic supply chains and bolster China’s push for dominance of 5G wireless," and it's not justified, even if South Korea has been provoking its former occupier.
Treasury Secretary Steven Mnuchin and Larry Kudlow, the president's chief economic adviser, were set to meet July 22 with executives from Intel, Qualcomm, Broadcom, Micron, Google and other tech firms, Reuters reported. The news agency said the meeting was to discuss the restrictions on exports to Huawei, which have hurt many chip makers, and have led Google to tell Huawei its phones cannot use Android operating software. A White House spokesman told Reuters that while the Huawei ban will likely come up, that's not the purpose of the meeting.
Commerce plans to eliminate license exceptions for civil end-users from the Export Administration Regulations, according to an alert from Akin Gump. Commerce did not say when the changes would take effect, the alert said, but U.S. companies should “prepare for the possibility that currently exempted activities may soon require specific licenses” from the Bureau of Industry and Security. The Office of Information and Regulatory Affairs recently completed a review of the changes, according to a notice on the OIRA website.
After more than 25 industry associations urged the Commerce Department to grant more time for comments on its next advance notice of proposed rulemaking for foundational technologies, top Commerce officials said it will consider the request but suggested that U.S. industries have had ample time to prepare comments.
Huawei will remain on the Commerce Department Bureau of Industry and Security's Entity List but "we've opened the door, relaxed a bit the licensing requirements from the Commerce Department where there are not national security influences or consequences," White House Chief Economic Adviser Larry Kudlow said at a CNBC Capital Exchange event July 9. For example, "some of the chip companies would be permitted to sell on a limited basis to Huawei," he said. Those may be parts for "general merchandise" that ends up in countries "where we don't hold any great cachet," such as South Korea or Vietnam, he said. "That's the sort of thing that will be opened up that was closed." Kudlow also noted that China and the U.S. aren't far apart in their trade talks, but said that sometimes the last pieces can be the most difficult to resolve. China has resisted U.S. requests for change in Chinese laws and for enforcement provisions, he said.
Export Compliance Daily is providing readers with some of the top stories for July 1-5 in case they were missed.
Brazil is considering lowering import duties on information technology goods, from 16 percent to 4 percent, the Hong Kong Trade Development Council said in a July 2 report. The move would cover items such as cell phones and computers. The announcement came after Brazilian government officials suggested lowering tariffs would boost the competitiveness of Brazilian companies in the IT sector. Brazilian industry associations have had mixed responses to the potential change, the report said. The Brazilian Electrical and Electronic Industry Association said the move would hurt Brazilian businesses and lead to job losses, while the Association of Brazilian Information Technology Companies reportedly said the move would “boost overall competitiveness despite some adverse effects to certain sectors.” The Brazilian Semiconductor Industry Association said the move would force foreign companies out of the country, shrink the Brazilian industrial sector and lead to an increase in imports, which would hurt domestic semiconductor manufacturing, the report said.
South Korea criticized Japan’s recent decision to increase restrictions on certain technology exports to South Korea, calling the move “a form of political retaliation” and threatening retaliatory action, according to a July 5 report from The Korea Herald posted on the Asia News Network website. Japan’s Ministry of Economy, Trade and Industry announced plans to increase export restrictions on high-tech items used for smartphones and chips, effective July 4. The move will impact large South Korean technology companies such as Samsung and LG Display (see 1907010020). South Korea’s National Security Council called the move a violation of international law and “vowed active diplomatic countermeasures” against Japan, the news report said. South Korea’s Deputy Prime Minister and Finance Minister Hong Nam-ki also said the country plans to take “corresponding measures,” including filing a complaint with the World Trade Organization, according to the report.