The Senate Crime and Terrorism Subcommittee will hold a hearing on big tech and Beijing at 2:30 p.m. Wednesday in 226 Dirksen.

A Commerce Department agency plans the first meeting of its Emerging Technology Technical Advisory Committee this spring, amid delays issuing prospective members security clearances. A Bureau of Industry and Security spokesperson emailed that the agency remains “on target” to have the meeting before summer. Commerce officials originally scheduled the meeting for December, and then January, delaying it each time. ETTAC applicants are impatient, and trade lawyers have heard little information, they said in interviews last week. Adrienne Braumiller, a trade lawyer with Braumiller Law Group and member of BIS’ Regulations and Procedures TAC, has “no clear understanding” of why the process has taken so long, calling it “rather protracted and lengthy.” Doug Jacobson of Jacobson Burton heard about “numerous delays in the process” but hasn't heard why. ETTAC’s “primary focus” will be to identify emerging technologies with dual-use applications, says its charter. Those efforts will inform Commerce restricting sales of emerging technologies, which faced delays (see 1911070026). Commerce has released two sets of controls on emerging technologies without ETTAC input.

Discussions within the Commerce Department to expand U.S. export control jurisdiction over foreign exports to Huawei would have a chilling effect on the U.S. semiconductor industry, said Semiconductor Industry Association President John Neuffer. Current U.S. export restrictions on Huawei are already hurting the industry’s ability to sell to China, said Neuffer during an Information and Technology Innovation Foundation workshop Tuesday. China is about 35 percent of U.S. semiconductor sales, and more restrictions would further alienate Chinese customers who are weary of being added to Commerce’s Entity List, he said: “Some of them are afraid they’re next.” Neuffer said the semiconductor industry remains uncertain about the U.S. approach toward Huawei and China. He warned the Trump administration against further revisions to the U.S. export control system. “We think that’s not necessary,” Neuffer said, adding the U.S. shouldn’t place controls on nonsensitive products with no national security nexus, such as smartphone chips. “There have been some confused waters for us in terms of understanding exactly what the U.S. government intends on doing with Huawei and the China market generally,” Neuffer said.

The Office of the U.S. Trade Representative formed a “bilateral evaluation and dispute resolution office” that will “monitor” China’s compliance with the phase one trade deal and work with a counterpart office in Beijing to resolve disputes, said the agency Friday. Deputy USTR Jeffrey Gerrish will head the office, it said. The office is part of an elaborate “arrangement” built into phase one to enforce its terms and douse any future fires (see 2001160022). Phase one was signed Jan. 15 and took effect Friday. With it came the 50% rollback to 7.5% in the rate of Section 301 List 4A tariffs on finished TVs from China and other consumer tech goods.

Nvidia expects to take a $100 million revenue hit from the coronavirus in fiscal Q1 ending late April, though it's “still early and the ultimate effect is difficult to estimate,” said Chief Financial Officer Colette Kress on a Q4 call Thursday. This “reflects what may be supply challenges” or a reduction in “overall demand,” she said. Nvidia gets about 30 percent of gaming revenue from China, she said. Q1 gaming revenue likely will decline by "low-double" digits sequentially from Q4, which ended Jan. 26, she said. China also is "a very important market" for Nvidia's data center business, she said. Revenue in that sector "moves from quarter to quarter, just based on the overall end-customer mix as well as the system builders that they may choose," she said. "It's a little harder to determine" the impact of the coronavirus impact in that sector, she said. Q4 sales rose 41 percent from the year-ago quarter to about $3.1 billion. It expects Q1 revenue to be about flat. "Discussions with China’s regulatory agency, the State Administration for Market Regulation," on the takeover of Mellanox "are progressing," and the deal likely will be completed in the early part of this calendar year, Nvidia said. The stock closed 7 percent higher Friday at $289.79.

The Trump administration's "biggest focus" in its trade relations with China is implementing the phase one deal that takes effect Friday, Treasury Secretary Steve Mnuchin told a Senate Finance Committee hearing Wednesday on the administration's proposed fiscal 2021 budget. Implementing phase one has "slowed down" amid the coronavirus epidemic, said Mnuchin, a top negotiator in the phase one talks with China. Implementing phase two could come gradually, he said. President Donald Trump "doesn't want to set arbitrary timelines," he said. That the administration has left "significant tariffs" in place on Chinese imports gives the Chinese incentive to work with the U.S. on phase two, he said. When Sen. Ben Sasse, R-Neb., expressed skepticism that China would follow through on its phase one commitments on forced technology transfer or intellectual property reforms. Mnuchin replied, "The difference here is this agreement has real enforcement."

As Foreign Investment Risk Review Modernization Act rules take effect Thursday, FIRRMA’s definition for critical technologies remains unclear due to a lack of Commerce Department proposed rules on emerging and foundational technologies, trade lawyers said. FIRRMA expands jurisdiction of the Committee on Foreign Investment in the U.S. to review some investments involving critical tech (see 2001150018). Commerce “has really issued just one set of regulations that could possibly cover emerging and foundational technologies,” said Vinson & Elkins' Dave Johnson, referencing an interim final rule to restrict exports of geospatial imagery software released by Commerce in January: “There's a lot of work they have to do in this area.” Johnson, speaking alongside Vinson & Elkins' Damara Chambers at a Tuesday panel hosted by the law firm, said the scope of businesses affected by FIRRMA’s regulations that deal in critical tech could be significant. Voluntary declarations may be very helpful, Chambers said. “For benign transactions that ... aren’t complicated for CFIUS to get their arms around, those should move very quickly under this voluntary filing process,” she said. “I’m very excited about the concept.” The Commerce Department didn't comment Wednesday.

President Donald Trump's recent executive order to strengthen e-commerce enforcement may pose hurdles to trade professionals, experts told us. The EO (see 2001310061) is ambiguous, and how Customs and Border Protection plans to heed the order's call to restrict access to importer of record numbers based on customs and intellectual property rights violations is unclear, said Sandler Travis lawyer Paula Connelly in an interview. The EO says customs brokers and express shippers would be responsible for determining if a foreign importer is trying to get around a past debarment, for instance, by changing the company's name. National Customs Brokers & Forwarders Association of America President Amy Magnus said brokers aren't investigators, but “there’s going to be an expectation that we’re going to be more involved in the vetting and sort of screening of all parties.” The White House didn't comment Tuesday.

February historically is a slow month for imports, but with the coronavirus causing factory shutdowns in China, activity at major U.S. retail container ports this month is expected to stay even quieter than normal, said the National Retail Federation Monday. U.S. retailers were already beginning to shift some sourcing to other countries because of the trade war, “but if shutdowns continue, we could see an impact on supply chains,” said NRF. U.S. ports handled 1.72 million 20-foot-long cargo containers or their equivalents in December, the most recent month for which actual data are available, it said. That was up 1.8 percent from November but down 12.4 percent from December 2018, it said. It’s estimating January’s activity at 1.82 million containers handled, down 3.8 percent from January 2019, it said. It’s forecasting February activity will be down 12.9 percent year-over-year at 1.41 million containers, it said.

The Commerce Department seeks comment by April 6 on information collection for the “Technology Letter of Explanation,” said Thursday's Federal Register. The letter provides a description of the technology proposed for export to allow the Bureau of Industry and Security technical staff to evaluate the impact on the national security and foreign policy of approving a license.