Huawei doesn’t expect to make rapid progress with President Joe Biden's administration on U.S. sanctions, Rotating Chairman Eric Xu told analysts April 12 in a streamed presentation. Huawei faces challenges due to the COVID-19 pandemic, geopolitics and U.S. sanctions, Xu said. Meanwhile, Biden hosted executives from AT&T, Google, Intel, automakers and other tech companies for a virtual discussion of supply chain issues. Xu said the U.S. is responsible for supply disruptions.
The U.S. and China saw an uptick in trade restrictions during the first few months of 2021, and companies should expect more compliance challenges as they continue to contend with a variety of export controls and sanctions issues from both countries, law firms said.
President Joe Biden has yet to choose a leader for the Bureau of Industry and Security, leaving the agency without a clear direction as it considers competing visions for the direction of American technology policy. The rival factions seeking to influence Biden’s choice underscore how much of an outsized role the once relatively unknown agency will play in implementing the Commerce Department’s efforts to outpace China in emerging technologies and control what lawmakers say is an overdue set of critical technologies.
The Senate Foreign Relations Committee released bipartisan legislation that it said will better position the U.S. to compete with China and penalize Chinese human rights abuses. The more than 200-page Strategic Competition Act of 2021, released April 8, would authorize a host of U.S. measures to tackle trade and technology competition issues with China, including sanctions, export controls and increased cooperation with allies on investment screenings. The bill focuses on countering China’s “predatory international economic behavior” and represents an “unprecedented” bipartisan effort, committee Chairman Bob Menendez, D-N.J., said. Menendez said the bill has the support to be “overwhelmingly approved” by the committee next week and the full Senate “shortly thereafter.”
The Bureau of Industry and Security added Myanmar to its list of countries subject to military intelligence end-use and end-user (MIEU) controls, the agency said in a notice. It also made several technical corrections to the original MIEU rule, which was issued in January and took effect March 16 (see 2101140035). The interim final rule takes effect April 9.
The Bureau of Industry and Security added seven Chinese entities to the Entity List for procuring U.S.-origin items in a way that harms U.S. national security, BIS said in an April 8 final rule. The seven “supercomputing entities” also support China’s military and help it develop modern weapons, the Commerce Department said.
Commerce Secretary Gina Raimondo suggested her agency has no plans to remove Huawei from the Entity List and said she will aggressively use trade tools to compete with China. But she also said she will prioritize efforts to invest in U.S. technology industries over imposing more export restrictions. “My broad view is what we do on offense is more important than what we do on defense,” Raimondo told reporters April 7. “To compete in the long run with China, we need to rebuild America in all of the ways we're talking about.”
Following the Chinese government's decision to place retaliatory sanctions on Canadian and British officials and entities for their criticism of the alleged human rights abuses in the country's Xinjiang region, lawyers in both countries are expressing concern over the rising tensions between the two sides and noticing greater business concern over maintaining Chinese market access. Neil Williams and Thomas Cattee, white collar crime lawyers at Gherson Solicitors in the United Kingdom, said the Chinese sanctions are merely symbolic without any real underlying economic effect but that sanctioned individuals in the U.K. have deferred to Chinese demands.
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The Commerce Department should be careful not to place unilateral export restrictions on semiconductors and should invest heavily in domestic chip innovation, technology companies told the agency in comments due this week. But at least one think tank urged Commerce to pursue more strict controls and argued that decoupling from China along the semiconductor supply chain is inevitable.