The U.S. will probably increase its use of sanctions and export controls no matter who wins the upcoming presidential election, although a Donald Trump-led administration would be more likely to pursue drastic measures that could accelerate U.S.-China decoupling, said Martin Chorzempa, a senior fellow with the Peterson Institute for International Economics. Those measures include expanding the use of the Bureau of Industry and Security’s foreign direct product rule or placing blocking sanctions on major Chinese companies such as Huawei.
Exports to China
Beijing held a national conference on export controls last week, where government officials summarized Chinese export control actions over the past year and “studied and arranged the next key tasks,” according to an unofficial translation of a notice from China’s commerce ministry. Officials called for an “improvement of the modern national export control system” and added that export controls play “an increasingly important role in safeguarding national sovereignty, security, and development interests and promoting high-quality development of trade,” the ministry said.
U.S. semiconductor export controls on China lack a clear “endgame,” said Michael Mazarr, a senior political scientist with the RAND think tank. He said the controls are a “perfect example” of a U.S. policy approach that embraces “competition for its own sake and rushing down blind alleys without a clear sense of where policy will lead.”
Former Mexican Ambassador to the U.S. Martha Bárcena said that she has been told that the U.S. will not comply with the panel ruling that said that rollup was understood to be part of the automotive rule of origin (see 2403070067), and she said that is undermining USMCA. She said that's because both the Republicans and the Democrats are fighting for the political support of the United Autoworkers and Teamsters. (The autoworkers' union characterizes rollup as watering down the requirement for North American content in vehicles).
Chinese Commerce Minister Wang Wentao urged U.S. Commerce Secretary Gina Raimondo this week to lift U.S. semiconductor export restrictions against China (see 2211010042 and 2302020034) and reverse its proposed import restrictions on Chinese connected vehicles (see 2409220001), saying the two countries need to reach a clearer understanding around their national security-related trade policies.
The Office of Foreign Assets Control this week sanctioned several China-based companies, a person in Iran and others for helping to move weapons, dual-use items or commercial goods in support of the Houthis, the Yemen-based group that the U.S. designated as a terrorist organization in January (see 2401170025).
The Nov. 5 presidential election could have a significant impact on how the U.S. works with the EU to develop export controls for China, according to a new report released last week by the Washington, D.C.-based American-German Institute.
Members of the European Parliament approved a resolution last week calling on the EU to expand sanctions against Russia, Belarus, and non-EU countries and entities providing Russia with military and dual-use technologies.
The top lawmaker on the House Select Committee on China called on the U.S. to continue imposing strict export controls and investment restrictions against China, adding that those tools must be coupled with bolder investments in innovative American companies if the U.S. wants to “win” its technology competition with China.
Deputy Secretary of State Kurt Campbell told a congressional panel Sept. 18 that he will look into the possibility of expanding the export control exemptions that the State Department intends to grant to Australia and the U.K. under the AUKUS security partnership.