Chinese officials recently have slowed merger reviews of a “number” of proposed acquisitions by U.S. companies, asking the firms to first make available in China products that may be subject to U.S. export controls, The Wall Street Journal reported. China has so far slow-walked merger reviews of Intel’s $5.2 billion purchase of Israel-based Tower Semiconductor and chipmaker MaxLinear’s $3.8 billion purchase of Taiwan-based Silicon Motion Technology, the report said.
Exports to China
The Office of the U.S. Trade Representative released its 2023 National Trade Estimate Report on Foreign Trade Barriers, highlighting the most significant foreign market issues U.S. exporters are facing. The report focuses on foreign import policies, technical barriers to trade, intellectual property protection, competition, and more.
China has asked the World Trade Organization to review semiconductor export controls recently announced by Japan, saying the “harmful” measures violate WTO rules. Beijing also lodged a broader complaint against the reported chip control deal agreed to by the U.S., the Netherlands and Japan, saying it should be made public and scrutinized by WTO members.
Japan last week said it plans to impose new export controls on certain semiconductor manufacturing equipment, a move that could align its restrictions with some of the sweeping China controls released by the U.S. in October. The Japanese restrictions will apply to 23 types of chip items and covering six categories of equipment used in chip manufacturing, including cleaning, deposition, lithography and etching, Reuters reported March 31.
The European Commission will present ideas this year on a potential outbound investment screening regime, which could look to prevent European investments in sensitive Chinese technology sectors, Commission President Ursula von der Leyen said last week. She also said the EU will consider new trade restrictions on dual-use goods, including those that may be used for human rights abuses.
The U.S. and more than 20 of its allies this week released an export controls code of conduct, establishing a new forum for “subscribing states” to share information and stop technologies from being used for human rights violations. The Bureau of Industry and Security also issued new guidance describing how it factors human rights issues into its export application decisions and outlining the due diligence responsibilities of exporters.
Reps. John Garamendi, D-Calif., and Dusty Johnson, R-S.D., unveiled new legislation this week that they said will build on last year’s Ocean Shipping Reform Act (see 2303240068) by further expanding the Federal Maritime Commission's authority and “crack down” on China’s “attempts to influence America’s supply chain.” The Ocean Shipping Reform Implementation Act, introduced March 29, would block U.S. ports from using Chinese state-sponsored logistics software, allow the FMC to investigate foreign shipping exchanges to “preempt improper business practices," authorize the commission to “streamline data standards” to aid maritime freight logistics and more.
The head of TikTok said the U.S. shouldn't have concerns about its parent company, ByteDance, even as lawmakers said they believe the Chinese government can use the company to access sensitive data collected by the app. TikTok CEO Shou Chew said the app is not controlled by China and said it has built a firewall to prevent U.S. personal data from “unauthorized foreign access.”
The Bureau of Industry and Security this week added 32 parties to its Unverified List after it was unable to verify their “legitimacy and reliability” for receiving export-controlled items. The additions include 14 entries in China, five in the United Arab Emirates, four in Turkey, two in Germany and one each in Bulgaria, Canada, Indonesia, Israel, Malaysia, Saudi Arabia and Singapore.
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