House and Senate Democratic leaders subpoenaed four State Department officials and released parts of an interview with a former official that the lawmakers say raise questions about the administration’s controversial military sales to Gulf states last year (see 1907150033 and 1907300027). The interview -- a July 24 testimony by former State Department official Charles Faulkner -- points to a “small group” of agency officials who were “determined to ignore legitimate humanitarian concerns ... to ram through more than $8 billion in arms sales,” according to an Aug. 3 joint press release from House Oversight and Reform Committee Chairwoman Carolyn Maloney, D-N.Y., House Foreign Affairs Committee Chairman Eliot Engel, D-N.Y., and Senate Foreign Relations Committee ranking member Bob Menendez, D.-N.J.
A House oversight subcommittee is investigating the Trump administration's July decision to loosen export restrictions on gun silencers (see 2007130014), saying it is “deeply concerned” about a potential conflict of interest behind the decision. In a July 28 letter to the director of the Office of Management and Budget, Rep. Stephen Lynch, D-Mass., chairman of the House Oversight’ Committee Subcommittee on National Security, cited a July 13 report in The New York Times that the decision was made at the “urging” of White House lawyer Michael Williams, who previously served as general counsel to a gun advocacy group.
The U.S. on July 31 sanctioned a Chinese state-controlled organization and two Chinese officials for human rights violations in Xinjiang. The sanctions target the Xinjiang Production and Construction Corps, former XPCC Party Secretary Sun Jinlong and XPCC Deputy Party Secretary Peng Jiarui.
The Treasury Department finalized the fee structure for filing certain transactions with the Committee on Foreign Investment in the U.S. and made a “clarifying revision” to the definition of “principal place of business,” according to a final rule released July 28. The fee structure was first outlined in March and April (see 2004280027), and the original definition for principal place of business was outlined in a January rule. The rule takes effect Aug. 27.
The U.S. is working on more measures to dissuade companies from doing business in China, administration officials said, including through financial incentives and more industry outreach about enforcement risks. Commerce Department official Nazak Nikakhtar and State Department official Keith Krach also said the administration is working to collaborate more with trading partners against China.
The U.S. said that it has received no details on changes to subsidized loans for Airbus from France and Spain, so “no one can take seriously” that the changes addressed the entirety of the World Trade Organization decision that the subsidies distorted the market. The U.S. made the comments at a Dispute Settlement Committee in Geneva July 29, a Geneva trade official said. The U.S. representative also said the European Union didn't address the other six measures the WTO identified as distorting. The EU had said last week that the changes resolved the case, so the 15% tariffs on Airbus planes and 25% tariffs on other EU exports should be removed immediately (see 2007240057).
Experts disagreed on the utility of the Trump administration approach to World Trade Organization reform, during a Senate Finance Committee hearing on the topic, and senators on the left and right suggested that the negotiated trade rules disadvantage Americans.
The U.S. should impose stricter export controls on advanced semiconductor manufacturing equipment to prevent China from indigenizing semiconductor technologies, technology policy experts said. If the U.S. and allies successfully block China from importing and developing specialized software and advanced chips, they should then impose end-use and end-user controls to allow shipments only for civilian uses in China, the experts said.
The aerospace industry applauded the U.S. decision to loosen export restrictions on unmanned aircrafts, saying the change may allow U.S. companies to better innovate and compete in emerging markets for new aircraft technologies. The decision, announced by the State Department July 24, will no longer subject exports of certain unmanned aerial systems to a “strong presumption of denial,” but will instead impose a case-by-case review policy on a “subset” of unmanned aircrafts that fly at speeds below 800 kph.
It's not enough to just restrict sales of chips to Huawei, and convince allies not to use the Chinese company in their 5G networks, experts said at a Senate Banking Committee Economic Policy Subcommittee hearing on July 22. Rather, they testified, both 5G and export controls should be looked at more broadly. Martijn Rasser, senior fellow in the Center for a New American Security's Technology and National Security Program, said that 5G networks will be essential to all that the U.S. does in technology, so getting 5G right is urgent.