The Commerce Department Bureau of Industry and Security finalized some interagency reviews of Huawei license applications and will begin issuing approvals and denials on a “rolling basis,” said Matt Borman, Commerce deputy assistant secretary-export administration. Secretary Wilbur Ross said the department will "send out the 20-day intent-to-deny letters and some approvals” for U.S. companies to export some things to the Chinese telecom gearmaker. Ross said Commerce got about 290 “requests for specific licenses.” BIS plans to approve at least “several” licenses while denying others, a Commerce spokesperson told us after Borman spoke at the agency's Materials and Equipment Technical Advisory Committee meeting Wednesday. The Semiconductor Industry Association welcomes approvals for licenses that aren't national security threats. “Sales of these non-sensitive commercial products help ensure the competitiveness of the U.S. semiconductor industry, which is essential to national security,” said SIA President John Neuffer.
Ian Cohen
Ian Cohen, Deputy Managing Editor, is a reporter with Export Compliance Daily and its sister publications International Trade Today and Trade Law Daily, where he covers export controls, sanctions and international trade issues. He previously worked as a local government reporter in South Florida. Ian graduated with a journalism degree from the University of Florida in 2017 and lives in Washington, D.C. He joined the staff of Warren Communications News in 2019.
The U.S. should study China’s efforts to dominate emerging technology sectors, said the U.S.-China Economic and Security Review Commission. The congressionally created commission's annual report said China's outpacing the U.S. in artificial intelligence. Though it recommended Congress consider increased export controls, it said curbs on smart chips may “only accelerate China’s efforts to produce sophisticated chips domestically.” China faces “nearly insurmountable” hurdles in its effort to develop comparable technology to that of the U.S., as China’s semiconductor industry “is still heavily reliant on foundational technology dominated by U.S. firms,” the panel said Thursday. China's taking a “commanding position” in commercial satellite sectors, the commission found: That lets the country undercut some U.S. and other countries’ launch and satellite providers. The commission urged Congress to direct the National Science Foundation and the Trump administration to study China’s influence in international bodies charged with developing standards for emerging technologies. The China Embassy didn't comment.
As the State Department plans guidance for exports of surveillance technology, companies and associations are concerned about consequences of separate Commerce Department efforts to restrict sales of emerging technologies. The stakeholders said in interviews in recent weeks they're growing impatient with a Commerce delay of several months. State will publish its surveillance export guidelines by early January and will make changes based on industry comments, an Information Systems Technical Advisory Committee meeting was told Wednesday.
The Commerce Department may propose export controls on emerging technologies within weeks and an advance NPRM on foundational technologies before year's end, after delays (see 1909040029). That could help ease concerns from industry that warns against overly broad, unilateral controls, Matthew Borman, deputy assistant secretary-export administration, told a Sensors and Instrumentation Technical Advisory Committee meeting Tuesday. "Some companies are starting to think about moving R&D offshore because they don't know what's going to come out,” said Borman. “These will be very specific. They will not be general categories.” There will be a 60-day comment period for both, twice that as proposed originally for the ANPRM, the official said.
The Commerce Department got 200-plus Huawei-related license requests since the Chinese company was added to the agency’s entity list, according to a Commerce spokesperson. “Given the complexity of the matter, the interagency process is ongoing to ensure we correctly identified which licenses were safe to approve.” Companies haven't received approvals or denials, said trade lawyers with clients that submitted license applications. Huawei didn't comment Wednesday.
The U.S. government lacks technical knowledge and a single, leading voice in its approach to technology competition with China, the Brookings Institution was told. U.S. industries are concerned technology policies, such as export controls, are being made without full understanding of impact, said Adam Segal, Council on Foreign Relations emerging technologies chair. “We have to have a much better sense of the technologies involved and how they're actually deployed across a range of sectors," he told a Friday panel. Artificial intelligence isn't "going to look the same as quantum, which is not going to look the same as semiconductors, even though we’re all clumping them together as emerging technologies,” he added. The Commerce Department is working on tech export control regulations (see 1907110044). U.S. industries say there doesn’t seem to be a single voice for the U.S. on technology involving China, Segal said. “There are many voices, often competing, and not explicitly being driven from executive [branch] agencies." Abraham Newman, director of Georgetown University's Mortara Center for International Studies, doesn't believe the U.S. “has a clear strategy of what it’s pursuing vis-a-vis China in the technology sphere.” He wants the U.S. approach coordinated with trading partners: “I don’t have the sense that the current government is pursuing that.” The White House Office of Science and Technology Policy didn't comment.
A Bureau of Industry and Security official acknowledged delay in BIS' proposed rulemaking for foundational technologies, saying she and other top Commerce Department officials expected the notice to have been published by now. “I personally thought foundational would be out faster than it is. It was not just higher-level people,” said Hillary Hess, BIS regulatory policy division director, at a Tuesday panel hosted by the American Bar Association. Hess and another official said in June the notice would be released soon (see 1907110044). Hess declined to give an updated timetable now. She briefly said of the proposal for emerging technologies that Commerce has been meeting with “a number of companies” to understand what emerging technologies are most important for U.S. industry and which technologies they’re interested in pursuing. Hess said Commerce created “technical teams” of engineers to tackle emerging tech categories. “They’re basically doing evaluations to look at what should be proposed for control and … what shouldn’t be,” Hess said. It’s possible the teams won’t see a need for new controls, she said. If Commerce issues controls on emerging technologies, Hess suggested the agency wants to do it soon: “We would like to get some stuff out the door.”
China will impose tariffs on about $75 billion worth of U.S. goods in retaliation for the coming 10 percent U.S. duties on $300 billion in Chinese goods, said China’s State Council Friday. China said it will impose either 10 percent or 5 percent tariffs on more than 5,000 U.S. products. The tariffs will be imposed in two separate batches on Sept. 1 and Dec. 15, China said. Thursday, China’s Ministry of Commerce criticized the U.S. decision to add 46 new Huawei affiliates to the Commerce Department’s entity list, Gao Feng told a news conference. China “resolutely opposes the U.S. side’s practice of using state power to suppress Chinese enterprises for no reason.” The spokesperson said the U.S. move will hurt global supply chains and the country would retaliate with “countermeasures” if President Donald Trump follows through on his 10 percent tariff threat scheduled for December (see 1908150013). “Nobody wins a trade war,” said Myron Brilliant, U.S. Chamber of Commerce head-international affairs, in a statement. It’s time for an agreement on “the thorny issues” of technologies transfer, intellectual property enforcement, market access and “the damaging global impact of subsidies,” he said.
A China-U.S. trade deal would lead to lifting the ban on Huawei, speakers agreed during a Brookings Institution panel. All suggested a U.S.-China deal will eventually get done. The Commerce Department added Huawei to the Bureau of Industry and Security’s entity list in May, and recently showed willingness to loosen restrictions to mitigate impacts on U.S. exporters (see 1907100013). Blacklisting was more political than practical, said Information Technology and Innovation Foundation President Robert Atkinson and American Enterprise Institute Resident Scholar Derek Scissors. The Trump administration and Congress cited fears Huawei products can be used as state-monitored surveillance equipment. That was addressed with import restrictions, Atkinson said Thursday. “The Huawei ban had nothing to do -- nor should it have anything to do -- with national security,” he said. “Could we damage Huawei -- their national champion -- as leverage in a trade war? That's what that was about.” Atkinson said U.S. export controls against Huawei are “a total trade tactic” and China is never “going to accept a deal if the Huawei ban is still on.” Adding the company to the entity list was a trade tactic that will be easily undone, said Scissors. “We are much less linked to Huawei than some of the Europeans are and some of our other allies are,” he said. “The president will just say it doesn't matter to us.”
After many associations urged the Commerce Department to grant more time for comments on its next advance NPRM for foundational technologies, officials said it will consider the request but suggested industry has ample time. “There’s no surprise that it’s coming,” said Rich Ashooh, assistant secretary-export administration, at the Bureau of Industry and Security’s annual export controls conference this week. Nazak Nikakhtar, undersecretary-industry and security, said companies should have given “quite a bit of thought” to foundational technologies already. “That it’s been out there for a while, and everybody knows the foundational technology piece is coming, hopefully businesses have given thoughts to their comments.” Nikakhtar said BIS plans the notice “very, very soon.” BIS plans its first proposed set of rules for export controls on emerging technologies in “weeks, but not months,” Ashooh said. But Nikakhtar said Commerce is moving slowly to make sure it's fully “understanding the technologies, understanding the applications” and “going about this in the right way.” Ashooh said the upcoming controls won’t be a “categorical rule” on broad groups of technologies but instead will be applied slowly to individual components. He said BIS is working on controls on one “basket” of technologies and will continue to issue more controls as they're created. “This process will have no end,” he said. “It will continue as technologies continue.”