U.S. restrictions on exports of personal protective equipment are not expected to have a significant impact on U.S. industry, particularly because most U.S. companies produce those goods overseas, trade observers said. Companies have been more heavily impacted by recently announced Chinese restrictions on medical exports, which have caused customs delays and a backlog of shipments, the U.S.-China Business Council said.
Exports to China
The U.S. should introduce support measures for U.S. technology industries that are “too critical to fail,” especially those competing for market share with China, the Information Technology and Innovation Foundation said in an April 13 report. As the Commerce Department seeks to restrict sales of emerging technologies to counter Chinese technology theft (see 2004010007), Congress should task the administration with expanding funding for research in those key fields -- including robotics, artificial intelligence and semiconductors -- and target it to “maximize commercialization” of the technologies in the United States. Congress should also support an “industrial investment bank” to increase advanced production in the U.S. and “encourage” the relocation of critical technology production from China to the U.S., the ITIF said.
Export controls on masks used by medical workers -- an idea that had been floated (see 2004030063) -- have been averted, 3M announced the evening of April 6. The multinational company is producing 35 million masks a month in the U.S., and the president had said none of that production should be exported to Canada and Latin America, major recipients of that output. But now, the administration will address U.S. regulatory restrictions that prevented some Chinese masks from being used for medical workers, and 3M will import 166.5 million N95 masks, mostly from its China plant, over the next three months, the company said. “The plan will also enable 3M to continue sending U.S. produced respirators to Canada and Latin America, where 3M is the primary source of supply,” the press release noted.
Technology and semiconductor trade groups are objecting to increased export restrictions under consideration by the Trump administration, saying the controls could lead to industry uncertainty with significant impacts on semiconductor companies. In an April 6 letter to Commerce Secretary Wilbur Ross, the groups urged the administration to request industry input before finalizing the rule, which reportedly includes three measures to tighten restrictions on China’s ability to obtain advanced U.S. technology (see 2004020012).
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The Trump administration should be doing more to restrict sales of emerging technologies to China, lawmakers said in interviews earlier this month. Senators commended the administration for increasing foreign direct investment restrictions (see 2002260042) and going further than previous administrations in confronting China’s unfair trade practices, but said they will continue pushing for tighter restrictions.
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European governments are skeptical about the use of U.S. export controls to restrict transfers of sensitive technologies even as the U.S. ramps up attempts to convince them to adopt similar measures, according to a March 18 report from the Mercator Institute for China Studies. As the U.S. has taken an increasingly aggressive approach to restricting emerging technology sales to China, Europe increasingly sees export controls as a “blunt instrument” for tackling technology risks, the report said, viewing them instead as a U.S.-driven effort to contain China's rise.
Agricultural exporters and shippers are losing “hundreds of millions of dollars” due to shipping uncertainty and cargo detention penalties caused by the response to the coronavirus pandemic, said Peter Friedmann, executive director of the Agriculture Transportation Coalition. Friedmann was critical of the Federal Maritime Commission, which has yet to finalize a proposed rule issued last year that would provide guidance about how the FMC assesses the fairness of demurrage and detention practices. The rule’s public comment period ended in October.
Senate Finance Committee Chairman Chuck Grassley, R-Iowa, said the export restrictions on masks, respirators, medicines and other goods needed for responding to the COVID-19 pandemic is “a bad cycle,” and he urged the president and world leaders “to work together on a coordinated response on the epidemic.” Grassley, who was speaking with reporters on a conference call March 16, said restrictions reduce global supply and lead to higher prices. “I was encouraged to see the G7 leaders' statement today,” he said, which mentioned support for global trade.