The Office of the U.S. Trade Representative seeks comment by Aug. 14 in a docket whether it should extend recently granted and forthcoming List 4A tariff exclusions on Chinese imports for up to a year beyond Sept. 1, said a notice. Its evaluation will focus on whether a product remains available only from China, despite imposition of the List 4A tariffs in September, it said: Importers should describe any changes in the global supply chain since List 4A took effect and what they did to source the product from the U.S. or a third country.

The Treasury Department Office of Foreign Assets Control fined Amazon more than $130,000 for allegedly violating U.S. sanctions. The company processed online orders sent to a range of sanctioned countries in the Middle East and Asia, and didn't follow reporting requirements for more than 300 transactions done under a Crimea general license, OFAC said Wednesday. The company also processed orders for people “located in or employed by the foreign missions” of Cuba, Iran, North Korea, Sudan and Syria. Amazon’s sanctions screening program “failed to fully analyze all transaction and customer data,” which led to gaps in compliance, the U.S. said. The maximum penalty was more than $1 billion, but OFAC said Amazon self-disclosed the violations. Additional mitigating factors included that Amazon hadn't committed a violation in the previous five years, cooperated with the investigation and conducted an internal probe. The company didn't comment Thursday.

The U.S. and China should “redouble” efforts to “implement all aspects” of their phase one trade agreement (see 2001160022), especially “where implementation appears to be lagging,” 41 trade and business associations wrote Treasury Secretary Steve Mnuchin, U.S. Trade Representative Robert Lighthizer and Chinese Vice Premier Liu He. “Significantly increased” Chinese purchases of U.S. goods in “the coming weeks and months would be mutually beneficial," said CTA, the Information Technology Industry Council, National Retail Federation, Telecommunications Industry Association and others. “We strongly support and encourage” increased Trump administration efforts “to work with the US business community and stakeholders in China to increase export promotion efforts at this critical time” of COVID-19, they said Monday. They hope successful implementation of phase one “will create the necessary conditions” for the start of phase two negotiations “as soon as possible,” they said. Phase two is needed to “address important outstanding issues,” including cybersecurity, digital trade and standards setting, they said. USTR, Treasury and the Chinese Foreign Affairs Ministry didn't comment Wednesday.

The U.S. government has been slow to incentivize R&D in the semiconductor industry, ceding ground to foreign governments that have been heavily investing in advanced technologies for “decades,” said Semiconductor Industry Association CEO John Neuffer. He praised a recent push by Congress and the administration to provide more such federal funding and said much more is needed. “These would be very, very important first steps,” Neuffer said in an American Enterprise Institute interview Monday. “But when you compare to some other governments, it’s insufficient.” The Trump administration has taken what it says are significant measures to attract semiconductor manufacturing and counter rising competition from China, including convincing Taiwan Semiconductor Manufacturing Co. to build a factory in Arizona (see 2006240045) and increasing license restrictions for foreign exports of semiconductors to Huawei. Instead of more restrictions on China, Neuffer said he wants more domestic spending to aid U.S. companies. He said other governments “identified semiconductors as strategic industries long ago” and “they’ve been plowing substantial amounts into attracting semiconductor manufacturing.” Neuffer said the administration “has been working behind the scenes” on incentives for the semiconductor industry, and encouraged it and Congress to move faster and raise funding levels. The White House didn't comment Tuesday.

U.S. trading partners “must abide by global trade rules so that American businesses can compete on a level playing field,” Americans for Free Trade, a coalition of 160 trade associations, wrote Senate Finance and House Ways and Means committee leaders Wednesday. “We disagree with the continued and indiscriminate use of tariffs to achieve those goals.” Four rounds of Trade Act Section 301 tariffs on Chinese imports are causing “unnecessary harm" while "creating little leverage to achieve further concessions,” it said. The Trump administration vows to keep the tariffs until a phase 2 trade agreement with China, but that “seems less likely with each passing day,” said the coalition. The tariffs “have sown uncertainty in the world’s economy and mistrust with trading partners and have hindered, not helped, the U.S. response to the COVID-19 outbreak,” it said. Congress should also “demand” that the Office of the U.S. Trade Representative “improve” the tariff exclusions process and raise the portion of exemptions “so that it provides meaningful relief.” Of nearly 53,000 exclusion requests U.S. importers filed for relief from the tariffs, 75.4% were denied (see 2006220047). USTR didn’t comment Thursday.

The Interagency Labor Committee under the U.S.-Mexico-Canada Agreement on free trade seeks comments by Aug. 15 on the procedures it should use to review complaints about alleged violations of the treaty’s labor provisions, said Tuesday’s Federal Register. USMCA takes effect Wednesday and gives organized labor in the U.S. a process for filing grievances with the Trump administration alleging breaches of Mexico’s new labor laws revamp (see 2006240043). The revisions give Mexican workers collective bargaining rights for the first time and protect them against retaliation for joining unions or refusing to join. The interagency committee, co-chaired by U.S. Trade Representative Robert Lighthizer and Labor Secretary Eugene Scalia, will have 30 days to review a complaint and has the authority to rescind a product's duty-free status or bar its importation if it finds serious violations. The committee will accept comments at Regulations.gov in docket USTR-2020-0028.

Section 301 tariff costs motivated a third of global supply chain “leaders” to move sourcing out of China or make plans to do so in the next three years, reported Gartner Wednesday. It canvassed 260 fulfillment companies and contract manufacturers in February and March and found COVID-19 was “only one of several disruptions that have put global supply chains under pressure,” it said. The U.S.-China trade war “made supply chain leaders aware of the weaknesses of their globalized supply chains and question the logic of heavily outsourced, concentrated and interdependent networks,” said Gartner. China for decades was the “go-to destination for high-quality, low-cost manufacturing,” but the tariffs abruptly changed that profile, it said. The Section 301 duties raised supply chain costs by up to 10% for more than 40% of respondents, it said. For more than a quarter of them, “the impact has been even higher,” it said. Vietnam, India and Mexico are top alternative countries of origin. The desire to make supply networks more “resilient” is the second main motivator behind tariffs chasing companies out of China, it said.

The Office of the U.S. Trade Representative seeks comment on whether all exclusions granted to Chinese imports on Section 301 List 4 that are to expire Sept. 1 should be extended for up to another year, says Friday's Federal Register. USTR will accept comments July 1-30. Each exclusion will be evaluated independently, based on whether a product remains available only from China, it said: Companies are required to post a rationale publicly for extending the exclusions for another year.

The U.S. shouldn't address U.S. and Chinese trade tensions through decoupling, experts told the U.S.-China Economic and Security Review Commission. Instead, they recommended investing more heavily in technology research while pursuing more involvement at international standards bodies. “We need to accept that this is going to go on for the long term,” said David Finkelstein, director of the China and Indo-Pacific security affairs division at CNA, a nonprofit research group. “It's just not enough to [only] confront. We have to be positioned to compete.” The panel is preparing a report on U.S.-China competition to present to Congress in November. Kristine Lee, U.S.-China relations expert at the Center for a New American Security, said “there are a number of important elections coming up” for international bodies. The Commerce Department recently issued a rule to allow U.S. companies to more easily participate in standards setting bodies in which Huawei is a member (see 2006170031). Others advocated Wednesday for more technology investment, especially as China continues to pursue advancements in 5G and artificial intelligence. “Let's put some money into experimental, high-quality AI network-driven infrastructure,” said Barry Naughton, chair of Chinese international affairs at the University of California-San Diego. The White House didn't comment Thursday,

The Committee on Foreign Investment in the U.S. is focused on sectors including semiconductors, monitoring Chinese firms that could try to evade recent stricter U.S. license restrictions on sales of chips and other technology to China and Huawei, trade lawyers said on a Crowell & Moring panel. Another expert called for a balanced U.S. approach to China, speaking on a podcast also released Tuesday. Adelicia Cliffe of Crowell & Moring said CFIUS is increasing scrutiny in an attempt to catch Chinese investors that “may take advantage of vulnerable companies that have been affected by the pandemic.” Cliffe expects “a lot of scrutiny, particularly in the technology sector, for smaller emerging companies that may be desperate for capital during this time.” CFIUS also is taking a closer look at transactions involving personal information and customer data sets, said Caroline Brown, also of the law firm. “But semiconductors, as we know, are front and center,” she said. “It'd be surprising if any deal involving a semiconductor target would not receive scrutiny on the basis of its critical technology.” Increasingly stringent CFIUS reviews and tight export controls against China are expected to continue regardless of the outcome of the upcoming presidential election, said Maria Alejandra del-Cerro, also of Crowell & Moring. “We've seen bipartisan support for export controls on new commercial technology to China. We've seen Democratic leaders just as active and questioning the Commerce Department's decision to issue certain export licenses … for Huawei,” she said. “That pressure on China would continue.” CFIUS didn't comment Wednesday. In Samm Sacks' work on Chinese issues, she keeps in mind that there's a paradox, she told the newly released Technology Policy Institute podcast. "How do we maintain the openness of the U.S. system" while "knowing that that openness has been exploited," asked New America Cybersecurity Policy and China Digital Economy Fellow Sacks. "Are we putting those guardrails in the right places? And I would argue that we probably aren’t right now, but we need them." She mentioned U.S. actions involving Huawei, chips and CFIUS investigating TikTok. TPI President Scott Wallsten called the latter company "a particularly fascinating case." The Chinese platform, which didn't comment now, "falls into all of these debates," noted Wallsten, the podcast's co-emcee. "On the other hand, it is providing direct competition to Facebook and Instagram and all of these companies that so many of the same people who are critical of China, those same people also worry about competition among big tech companies."