As the U.S. increasingly relies on sanctions, export controls and trade restrictions as foreign policy tools, it should expect China to follow its example, former U.S. government officials said. While other countries are beginning to mimic U.S. trade strategies, the policies are most notably taking hold in China, the officials said, which recently rolled out an export control regime (see 2010190033), has increased threats of sanctions for foreign interference in Hong Kong and Taiwan (see 2012100022 and 2010260017) and issued regulations for its unreliable entity list (see 2009210017).
The Bureau of Industry and Security will add China’s Semiconductor Manufacturing International Company and more than 60 companies to the Entity List for actions “deemed contrary” to U.S. national security. BIS said SMIC, China’s top chipmaker, has concerning ties to China’s government and risks transferring imported U.S. technology to the country’s military. Other companies will be added to the Entity List for human rights abuses, for supporting China’s militarization of the South China Sea, for diverting U.S. products to China’s military and for the theft of U.S. trade secrets. BIS did not immediately say when the restrictions will take effect.
The World Customs Organization issued the following releases on commercial trade and related matters:
The government of Canada issued the following trade-related notices as of Dec. 16 (some may also be given separate headlines):
The U.S. and Singapore signed a memorandum of understanding that will extend trade financing and investment support to companies in both countries, the Commerce Department said Dec. 15. The MOU, which was signed by Commerce Secretary Wilbur Ross and Singapore’s Minister for Trade and Industry Chan Chun Sing, will help Singapore importers “finance the purchase” of U.S. exports, Ross said. He said it will also help draw more Singapore investment to the U.S. Commerce said the MOU will be in place for two years and is renewable.
The State Department’s Defense Security Cooperation Agency approved a potential sale to Italy worth about $500 million, the DSCA said Dec. 15. The sale includes Gulfstream G550 Aircraft and “Airborne Intelligence, Surveillance, Reconnaissance, and Electronic Warfare (AISREW) Mission Systems.” The principal contractor will be L3Harris.
The Border Trade Alliance wants the USMCA “technical corrections” fix to leave the treatment of foreign-trade zones out, it said. BTA said it opposes the change “that would prevent goods manufactured within an FTZ from receiving reduced or duty-free treatment” under the agreement that replaced NAFTA and took effect July 1. “USMCA is a trade agreement for the 21st century, but reinstating an old NAFTA-era rule turns back the clock on U.S. manufacturing competitiveness,” BTA Chair Sergio Contreras said. “In keeping with the goal of modernizing U.S. trade policy under USMCA, products produced within FTZs should qualify for duty-free treatment.” The group thanked the six senators who publicly said they oppose the inclusion of FTZ rule of origin changes in a technical fixes bill.
The U.S. and the United Kingdom signed a Customs Mutual Assistance Agreement meant to “further enhance bilateral efforts to secure and facilitate lawful trade,” CBP said in a Dec. 16 news release. “This new agreement will further enhance the U.S.-UK partnership by improving information sharing, strengthening the enforcement of our customs laws, and bolstering supply chain security while facilitating the flow of legitimate trade,” acting CBP Commissioner Mark Morgan said.
Tomas Baert, head of trade and agriculture at the European delegation in Washington, said the European Union is looking for a “strong and united front with the United States” on trade as the region and the world recover from the fallout of the COVID-19 pandemic. Baert, who was speaking on a webinar Dec. 15 hosted by the European American Chamber of Commerce, said that while the Trump era was marked with “turbulence and tension” in trade, Europe feels like it escaped mostly unharmed, since there were not “massive tariffs” imposed on exported cars, trucks and auto parts, as was threatened.
The talks to open up Brazil's market to U.S. ethanol (see 2010200018) have failed, domestic ethanol groups said, calling it “a dramatic turn in our bilateral trade relationship.” The U.S. Grains Council, the Renewable Fuels Association, the National Corn Growers Association and Growth Energy put out a joint statement Dec. 16: “Brazilian ethanol receives unfettered access into the U.S. market, while U.S. producers are denied reciprocal market access due to a restrictive import tariff designed solely to make U.S. product less competitive,” the groups said. “We urge the incoming [Joe] Biden Administration to respond with strength, leveraging various U.S. government tools and authorities to make it clear that protectionist barriers are unacceptable.” They said that Brazil exported about 96 million gallons of ethanol to the U.S. since May, and the U.S. has only exported about 4 million gallons under the previous tariff rate quota regime.