Although the Bureau of Industry and Security last month said it doesn’t have a draft rule in place to increase export licensing requirements for Huawei, exporters would be wise to still expect a tightening of restrictions against the Chinese telecommunications company, industry officials said this week. They also didn’t rule out BIS soon increasing export controls against China in other ways, including by potentially adding more items to the scope of its military end-use and end-user (MEU) rule requirements.
Exports to China
The World Trade Organization is steadily headed towards irrelevancy to global trade and is facing a "long, slow sunset," said Peter Harrell, former senior director for international economics and competitiveness at the White House, during remarks at the Georgetown International Trade Update on June 13.
China “firmly” opposed the U.S. additions of Chinese entities to its Entity List this week, a Foreign Ministry spokesperson said, calling on the Biden administration to “immediately stop using military and human rights-related issues as pretexts to politicize, instrumentalize and weaponize trade and tech issues.” The U.S. should “stop abusing export control tools such as entity lists to keep Chinese companies down,” the spokesperson said during a regular press conference June 13. The export controls targeted companies in China and elsewhere for supporting China’s military or the government’s human rights abuses in Xinjiang (see 2306120030).
The Treasury Department should sanction Russian state-owned nuclear company Rosatom, a “major source of funds” for Moscow and “one of the only largely unsanctioned Russian energy companies,” said Gregory Meeks, the House Foreign Affairs Committee’s top Democrat. Meeks, speaking during a June 13 House Financial Services Committee hearing, pointed to his bill introduced last month that would require the administration to designate Rosatom (see 2305120015).
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The Bureau of Industry and Security added 43 entities to the Entity List this week, including companies conducting various activities that either support China’s military or allow the government to “carry out human rights abuses.” Other entities were added for supporting Pakistan’s ballistic missile program or other weapons capabilities.
The European Union needs to better coordinate with its member states on potential export controls against China’s chip industry, said Noah Barkin, a Europe-China relations expert with the Rhodium Group. Barkin, speaking during a Senate Foreign Relations subcommittee hearing this week, said the EU is still grappling with how to best impose dual-use export controls and isn’t yet at a place where it can match U.S. restrictions.
The U.S. should push the World Trade Organization to end trade-related intellectual property waiver conditions, experts told a House subcommittee this week, saying the waiver may help China acquire sensitive U.S. technologies and leapfrog American innovation in biopharma. Several experts during the hearing suggested the waivers could act as a loophole to U.S. export controls and allow Chinese companies to better compete with the U.S. in the biotechnology industry.
The U.S. and its allies should tighten export restrictions on artificial intelligence technologies destined to China, said Rep. Michael Waltz, R-Fla.. Waltz, speaking during a June 5 event hosted by the Atlantic Council, said America and its close trading partners need to “collaborate and innovate within a bubble that can be protected,” adding that cutting off technology trade with China will be inevitable. “I just don't see a way forward without decoupling,” he said.
The Bureau of Industry and Security again renewed the temporary denial order (TDO) for three U.S. companies for their involvement in illegally exported technical drawings and blueprints to China (see 2206080068) after continuing to find evidence of additional potential export violations. The order, originally issued June 8, 2022, before being renewed in December (see 2212080007), was renewed for another 180 days on June 1, BIS said.