The World Customs Organization will be reconsidering some classification decisions at the next Harmonized System Committee meeting in September, according to law firm Sandler Travis. The reconsideration involves classification decisions of "at least two products -- certain vitamins and certain RF generators and RE matching networks -- after reservations were filed by the U.S. and others against the classification decisions," Sandler Travis said in a June 20 email.
Commerce’s Bureau of Industry and Security added five Chinese entities to its Entity List, the latest escalation in the U.S. and China’s ongoing trade war. The move restricts the entities' ability to purchase certain U.S. products and will require licenses for all items subject to the Export Administration Regulations with a review policy of presumption of denial. The entities are: Chengdu Haiguang Integrated Circuit, Chengdu Haiguang Microelectronics Technology, Higon, Sugon and Wuxi Jiangnan Institute of Computing Technology. The Wuxi Jiangnan Institute is owned by owned by the Chinese government, Commerce said.
Export Compliance Daily is providing readers with some of the top stories for June 10-14 in case they were missed.
Broadcom expects its semiconductor business to take a $2 billion revenue hit from the U.S.-China trade war, including the Trump administration's "Huawei export ban,” CEO Hock Tan said on a fiscal Q2 call June 13. The trade frictions are “creating economic and political uncertainty and reducing visibility for our global OEM customers,” he said. “Demand volatility has increased and our customers are actively reducing inventory levels to manage risks.” The $17.5 billion in semiconductor revenue Broadcom now expects in the fiscal year ending in February will translate into a year-over-year decline in the high single-digits, Tan said. Huawei generated about $900 million of revenue for Broadcom last year, but the market softness that prompted the company to shave $2 billion off its semiconductor revenue forecast “obviously extends beyond just one particular customer,” Tan said. “We're talking about uncertainty in our marketplace,” and that’s causing “compression” in the supply chain that’s reducing orders, he said. “It's broad-based.” With the revised forecast, “we tried to capture everything” in the business “environment,” including the impact of the proposed List 4 tariffs on Chinese goods, Tan said. The environment “is very, very nervous, and that's why we see a very, very sharp and rapid contraction of the supply chain and orders out there from our customers,” he said.
Senate Intelligence Committee Vice Chairman Mark Warner, D-Va., and Sen. Marco Rubio, R-Fla., urged President Donald Trump's administration on June 13 not to use U.S. restrictions on Huawei as a “bargaining chip in trade negotiations” with China. The Commerce Department's Bureau of Industry and Security issued a notice adding Huawei and affiliates to a list of entities subject to export administration regulations beginning May 16 (see 1905160072). BIS issued a general license temporarily allowing certain transactions by Huawei and the affected affiliates through Aug. 19. Trump later said sanctions against Huawei could be part of trade negotiations with China.
Export Compliance Daily is providing readers with some of the top stories for June 3-7 in case they were missed.
Panelists warned against increasingly strict export controls and criticized the Trump administration's handling of the Huawei blacklisting during a June 4 Senate Committee on Banking, Housing and Urban Affairs hearing on “Confronting Threats From China: Assessing Controls on Technology and Investment, and Measures to Combat Opioid Trafficking.” The U.S. is drawing dangerously close to shrinking markets for U.S. semiconductor exporters, the panelists said, a move that could prove devastating for the industry. They also suggested the Trump administration’s restrictions on Huawei are too broad and have hurt U.S. exporters as well as damaged trade talks between the two sides.
Export Compliance Daily is providing readers with some of the top stories for May 28-31 in case they were missed.
The temporary general license issued by the U.S. after it added Huawei Technologies to its Entity List has offered “almost no relief” for the U.S. semiconductor industry, which has been hurt severely by the move, said John Neuffer, president and CEO of the Semiconductor Industry Association. Speaking on U.S.-China trade issues at a Washington International Trade Association discussion on May 29, Neuffer underscored the importance of the Chinese market to U.S. semiconductor exporters and called on the Trump administration to more tactfully negotiate with China. “We would like the U.S. government to better balance its national security concerns with its economic security concerns,” Neuffer said.
The Department of Commerce published its spring 2019 regulatory agenda for the Bureau of Industry and Security. The agenda continues to mention an upcoming a long-awaited proposed rulemaking involving parties’ responsibilities under the Export Administration Regulations in a routed export transaction, saying the proposal will be published in May 2019. Sharron Cook, a senior policy export analyst for BIS, said in April the rule change will help solve some of the bigger frustrations with the current regulations faced by export forwarders (see 1904170064). BIS is aiming to issue the proposal in May, it said.