CTA fears “unilateral” export controls over emerging technologies “can seriously undercut U.S. technological leadership,” it told the Commerce Department’s Bureau of Industry and Security Thursday in docket BIS-2018-0024. CTA’s comments put it squarely in agreement with other tech groups that told BIS that overly strict export controls on new technology like artificial intelligence could harm tech innovation and bolster bad actors like China (see 1901100032). If the American tech industry is “locked out,” whether by “law or perception,” from pursuing “high growth markets” for “cutting-edge technologies,” U.S. companies “will lose the jobs and research investments that grow from our ability to compete for business in these fields,” said CTA. BIS should stick to the “principles” based in the 2018 Export Control Reform Act “as it considers whether or which technologies to propose for control,” it said. In deciding which emerging technologies should be targeted for controls, identify only those “not now controlled and that are essential to the national security” of the U.S., it said. It said any proposed controls should “be limited to addressing national security concerns, not trade policy issues.” CTA also urged the Trump administration to “give great weight to industry statements regarding how a proposed unilateral control would help or harm their U.S. business.” Don't "propose or impose new emerging technology controls unless it has fully considered the impact such controls would have on the U.S. economy,” CTA urged BIS. The Computer & Communications Industry Association suggested patented and patent-pending technology be excluded from export administration regulations. “A poorly executed export control regime can hinder innovation” and next-generation tech, CCIA said.

Deputy U.S. Trade Representative Jeffrey Gerrish led a delegation that concluded three days of trade talks this week with Chinese officials in Beijing and awaits “guidance on the next steps,” said his office Wednesday. Talks were part of the Dec. 1 agreement between President Donald Trump and President Xi Jinping in Buenos Aires to negotiate for 90 days on a comprehensive trade package that curbs China’s allegedly unfair practices on forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft of trade secrets, said the agency. The Buenos Aires agreement prompted the Trump administration to postpone to March 2 increasing to 25 percent tariffs on $200 billion worth of Chinese imports (see 1812030002). The increase would have taken effect Jan. 1. USTR said the officials discussed the need for any agreement to include “ongoing verification and effective enforcement.” The delegation conveyed to Chinese officials Trump’s “commitment to addressing our persistent trade deficit and to resolving structural issues in order to improve trade between our countries,” it said.

Continued economic "prosperity" is no "foregone conclusion” amid the broadly held concern about the impact to the U.S. economy of the tariffs on Chinese imports on steel and aluminum imports and “corresponding retaliation against U.S. exports," said Americans for Free Trade in a “welcome” letter Wednesday to newly elected and returning members of Congress. “We agree that China must be held to account for its violations of our trade laws and the international trade obligations all nations share,” said the coalition, whose 150 members include CTA, the Information Technology Industry Council and other tech groups. “Imposition of a tariff of up to 25 percent on $250 billion worth of China products -- and the threat to impose a similar duty on $267 billion more of such products -- will not remedy the situation. We continue to see stories on a daily basis about companies, both large and small, who are being harmed.” The coalition urged Congress to “exercise its oversight role on trade policy matters to prevent further harm ... from both the existing and proposed tariffs.”

Rep. Alcee Hastings, D-Fla., plans to ask GAO to study whether President Donald Trump's trade policies, including tariffs on “foundational” telecom equipment like routers and network components, will make it more expensive to deploy 5G technology. “At a critical time in the rollout of 5G infrastructure,” Trump's “trade policies with China threaten to eliminate whatever advantage we have in the race to deploy 5G technology nationwide,” Hastings wrote colleagues, seeking support for his planned request. “His tariffs are raising the cost of the microelectronics that are crucial in the fabrication of 5G infrastructure, raising the costs to consumers as carriers begin to roll out this technology.” A draft request letter to U.S. Comptroller General Gene Dodaro sought information on how the tariffs will increase additional costs for U.S. deployments of 5G infrastructure and how they affect competition among 5G hardware manufacturers. Hastings' draft sought a GAO review of the “national security implications of our entire supply chain of 5G infrastructure being dependent on foreign hardware manufacturers” and the “possible conflicts of interest” between the Trump administration and Chinese telecom equipment maker Huawei. Capitol Hill has continued to push back against Huawei and fellow Chinese firm ZTE since the Commerce Department's settlement that lifted a ban on U.S. companies selling telecom software and equipment to ZTE (see 1901040049). Hastings bemoaned the U.S. "no longer manufacturers [sic] any of the core telecommunications network equipment related to 5G” and said the two Chinese firms shouldn't gain control of U.S. infrastructure.

President Donald Trump celebrated revenue the U.S. is collecting from Trade Act Section 301 tariffs on Chinese goods, noting progress in talks with China to reach a comprehensive trade agreement. "The United States Treasury has taken in MANY billions of dollars from the Tariffs we are charging China and other countries that have not treated us fairly," tweeted Trump Thursday. "In the meantime we are doing well in various Trade Negotiations currently going on. At some point this had to be done!"

Despite partial government shutdown, the Office of the U.S. Trade Representative continues “to conduct all operations,” including trade negotiations and enforcement activities, “using existing funds,” said the agency Friday. USTR Robert Lighthizer is the lead negotiator in talks with China on a comprehensive trade package that forestalled the imposition of 25 percent Trade Act Section 301 tariffs on the third tranche of Chinese imports, at least until March 2 (see 1812140045). “Big progress” is being made in the U.S.-China trade negotiations, tweeted President Donald Trump Saturday. “Just had a long and very good call with President Xi of China,” said Trump. “Deal is moving along very well. If made, it will be very comprehensive, covering all subjects, areas and points of dispute.”

The “procedures” of the federal Foreign Trade Zones board chaired by Commerce and Treasury “generally align” with established rules and regulations for approving or denying applications for storing goods in FTZs but can do a better job of more fully documenting their decisions, a GAO report said. Customs and trade experts have described FTZs as being among several good “deferral mechanisms” for companies seeking to mitigate the higher costs of Trade Act Section 301 tariffs on Chinese imports because companies that store foreign goods in FTZs don't pay duties on them unless the goods are imported or consumed (see 1809240011). The FTZ program "offers a range of benefits" to encourage companies "to maintain and expand their operations" in the U.S., said GAO. As of July, 262 FTZs were approved for operation, it said. GAO audited 59 applications to store goods in FTZs between July 2017 and November 2018, and found 49 were approved, the rest denied “for reasons such as new or complex policy issues that required further review,” it said. Staff evaluating the applications correctly “collected and considered comments” from the public, industry specialists and Customs and Border Protection and made recommendations to the board whether to authorize the requests, said GAO. The rules require consideration of a “number of criteria” for evaluating applications, but staff didn't always “document consideration of all required criteria,” and the procedures “do not require” them to do so, it said. Without such documentation, the board “lacks an institutional record that all required criteria were considered and also lacks assurance that its decisions comply with U.S. trade and tariff law and public policy,” it said. It recommended the board write documentation requirements into its procedures.

China will scale back import tariffs on 706 items Jan. 1, including on raw materials for production, said the Finance Ministry. It's also reducing import tariff rates sharply on many more advanced items, including on cameras, duties on which will fall to 4 percent from 9 percent, it said. It's doing so "to accelerate the economic and trade cooperation between China and relevant countries," it said. On July 1, China no longer intends to increase the provisional tax rate on 14 information technology product categories, and will implement a fourth round of tariff reductions on 298 IT categories, it said.

China won’t “officially comment” on reports that President Donald Trump will sign an executive order in January barring U.S. companies from using Huawei and ZTE telecom equipment on national security grounds because the reports have “not been confirmed,” said a Foreign Ministry spokesperson Thursday. “Despite not having any evidence, certain countries have politicized the normal exchanges and cooperation in science and technology and even obstructed and restricted the normal operations of Chinese businesses on unwarranted charges and under the pretext of national security,” she said. “This actually amounts to shutting their own door to openness, progress and fairness.”

Software-as-a-service provider CalAmp took a $4 million hit to its Q3 revenue from supply shortages in the transfer of production to “various Tier 1 global contract manufacturers with facilities outside of China” as a hedge against tariffs, said CEO Michael Burdiek on a Thursday quarterly call. CalAmp is now “slowing somewhat the pace of our supply chain transitions in order to reduce product delivery risks in our production operations,” he said. Amid the “rush” of companies moving production out of China, “the new supply channels have not necessarily been reestablished or optimized,” he said. That “partly explains why we've had some issues around component supply,” he said. Burdiek doubts CalAmp “lost any business” as a result of the supply shortages, but “obviously, it stresses customer relationships when you're not able to fulfill demand against promised dates.”