The Commerce Department’s recent restrictions against Huawei could “create substantial uncertainty and disruption” for the semiconductor supply chain, leading to lost sales and an eroding customer base for U.S.-origin goods, a semiconductor manufacturing industry group said Aug. 24. Semi asked Commerce to extend the deadline for the savings clause in its Aug. 17 rule and review licenses for non-5G items with “significant flexibility.”
The Office of Foreign Assets Control on Aug. 25 sanctioned a Chinese national and his company for shipping fentanyl to the U.S., and removed sanctions from a Honduran money laundering ring. The Chinese sanctions target Taotao Zhang and his company, Hong Kong-based Allyrise Technology Group Co., Limited, for shipping fentanyl to the U.S. through freight forwarding services and other means to disguise their origin. OFAC also removed sanctions from Jaime Rolando Rosenthal Oliva, who is now deceased, and five associated companies and other entities involved in Rosenthal's money laundering scheme, which have been seized by Honduran authorities.
After the first high-level review of the phase one trade deal, the principals talked about progress and ensuring the success of the U.S.-China trade agreement, but some believe the happy talk can't obscure that China and the U.S. are disentangling their mutual dependency in tech goods and services. “There is a re-alignment that is happening in real time,” Rideau Potomac Strategy Group President Eric Miller said in an Aug. 25 phone interview, the day after the call. U.S. and Chinese trade officials reemphasized their commitment to the phase one agreement during the Aug. 24 call, the Office of the U.S. Trade Representative said.
The European Union will modernize trade agreements in the Pan-European-Mediterranean region to make rules of origin more flexible and “business friendly,” the European Commission said Aug. 24. The origin rules for certain products will be “easier to meet,” the EU said in a guidance, adding that the deal will now include higher thresholds for the use of non-originating goods and will lift prohibitions on duty-drawbacks. The changes will also ease logistics and customs procedures by allowing for electronic versions of “origin proofs.” The new measures will apply to trade deals with Iceland, Liechtenstein, Norway, Switzerland, Faroe Islands, Turkey, Egypt, Israel, Jordan, Lebanon, Palestinian territories, Georgia, the Republic of Moldova, Ukraine, Albania, Bosnia and Herzegovina, North Macedonia, Montenegro, Serbia and Kosovo.
China will launch a pilot “preferential” certificate of origin system for trade with certain least developed countries, an Aug. 18 notice said, according to an unofficial translation. The system, to launch Sept. 10, will issue online certificates of origin for trade with Bangladesh, Niger, Ethiopia, Mozambique and East Timor, China’s General Administration of Customs said. The system will “further promote the implementation of special preferential tariff treatment measures” for certain least developed countries “that have established diplomatic relations with China, the notice said. It will also help improve customs clearances for qualified goods.
The Bureau of Industry and Security issued an order temporarily denying export privileges for three Indonesian companies and three people for illegally exporting U.S. aircraft parts to Iran’s Mahan Air. In an Aug. 20 press release, BIS said the companies operate an “international procurement scheme” for the sanctioned Iranian airline and will be barred from exporting or receiving U.S.-origin goods for 180 days. The suspension may be renewed.
The semiconductor industry was surprised by the U.S.’s increased restrictions on Huawei (see 2008170029) and expects significant short-term supply chain disruptions, industry officials and experts said in interviews. Officials also thought the initial version of the rule, issued in May (see 2005150058), was sufficient, and were frustrated that the Bureau of Industry and Security did not ask for feedback on the new requirements.
China again criticized U.S. restrictions on Huawei, TikTok and WeChat but said the measures will not affect an expected call between officials from the two countries to discuss the phase one trade deal. The call, originally scheduled for Aug. 15 (see 2008170022), will be held “in the near future,” a Chinese Ministry of Commerce spokesperson said Aug. 20, according to an unofficial translation. The call is expected to serve as a six-month compliance check on both countries’ commitment to the phase one agreement. The Office of the U.S. Trade Representative did not comment.
South Korea eliminated antidumping duties on imports of Japanese pneumatic transmission valves, Japan’s Ministry of Economy, Trade and Industry said Aug. 19. Japan had raised a dispute with the World Trade Organization, arguing that South Korea imposed the duties past their scheduled five-year expiration date. “It was unfortunate that [South Korea] continued imposing the duties beyond May 30, 2020, the original deadline,” Japan said. “[South Korea] cannot be recognized as having performed its duties sincerely.” Japan said the duties were eliminated Aug. 19 and it will “refrain from taking further legal procedures … such as retaliatory measures.” The WTO Appellate Body had ruled on Sept. 10, 2019, that South Korea was not adhering to WTO tariff implementation agreements and recommended it bring its measures into conformity, which South Korea agreed to do by May 30.
The Treasury's Office of Foreign Assets Control sanctioned two United Arab Emirates-based companies and a business owner for supporting sanctioned Iranian airline Mahan Air, an Aug. 19 news release said. The designations target Parthia Cargo, Delta Parts Supply FZC and Iranian national Amin Mahdavi, who owns Parthia Cargo. OFAC said the companies provided “key parts and logistics services” that help Mahan Air sustain its fleet of “western manufactured aircraft.” The parts and services also help the airline transport terrorists, “lethal cargo” and technical equipment to Syria and Venezuela.