The U.S. should introduce support measures for U.S. technology industries that are “too critical to fail,” especially those competing for market share with China, the Information Technology and Innovation Foundation said in an April 13 report. As the Commerce Department seeks to restrict sales of emerging technologies to counter Chinese technology theft (see 2004010007), Congress should task the administration with expanding funding for research in those key fields -- including robotics, artificial intelligence and semiconductors -- and target it to “maximize commercialization” of the technologies in the United States. Congress should also support an “industrial investment bank” to increase advanced production in the U.S. and “encourage” the relocation of critical technology production from China to the U.S., the ITIF said.

Technology and semiconductor trade groups are objecting to increased export restrictions under consideration by the Trump administration, saying the controls could lead to industry uncertainty with significant impacts on semiconductor companies. In an April 6 letter to Commerce Secretary Wilbur Ross, the groups urged the administration to request industry input before finalizing the rule, which reportedly includes three measures to tighten restrictions on China’s ability to obtain advanced U.S. technology (see 2004020012).

Senior Trump administration officials agreed to three measures that will tighten restrictions on China’s ability to obtain advanced U.S. technology, according to an April 1 Reuters report. The measures, agreed to during a March 25 meeting (see 2003260036), will “introduce hurdles” to block Chinese companies from buying U.S. optical materials, radar equipment and semiconductors, the report said. It is unclear if President Donald Trump will sign off on the new rules, Reuters said. It is also unclear how these measures relate to potential changes to the Direct Product Rule and the de minimis rule that administration officials have been considering for months (see 2003050041, 2003130037 and 1912100033).

Senior administration officials agreed to new measures to further restrict foreign exports of chips to Huawei (see 2003050041), according to a March 26 Reuters report. The measures would alter the Foreign Direct Product Rule to restrict foreign sales that contain U.S. chip making equipment, Reuters said, although it remains unclear if President Donald Trump will sign off on the change. Trump has said that he wants to ease restrictions on exports and sell more to China (see 2002180057). The change, which has been discussed within the administration for months (see 1912100033, 1912130052 and 2002050047) has been met with criticism from the semiconductor industry (see 2002180060). The White House and the Commerce Department Bureau of Industry and Security did not comment.

Senate Finance Committee Chairman Sen. Chuck Grassley, R-Iowa, told reporters that the coronavirus outbreak's impact on China's factories has shown policymakers that the U.S. is too dependent on China for imports. “There ought to be more manufacturing in the United States, but that isn't just on pharmaceuticals, but that could be on anything you're having these supply chains are being interfered with,” he said March 11 in his office at the Capitol.

Japan recently removed “seasonal restrictions” on the import window of U.S. chipping potatoes and lifted the two-month maximum storage restriction, according to a U.S. Department of Agriculture Foreign Agricultural Service report released March 6. The changes, which took effect last month, were the result of 15 years of discussions between the USDA and Japan in which the U.S. tried to “demonstrate that the limited trade window was not a phytosanitary-based restriction, but rather a technical barrier to trade.”

Continued U.S. restrictions on exports of technology to Chinese companies could have “profound negative repercussions” for the U.S. semiconductor industry, significantly depleting their global competitive standing, according to a March 9 report from the Boston Consulting Group. If current export control trends continue or escalate, leading to a further decoupling between U.S. and China, U.S. semiconductor companies could lose “8 percentage points of global share and 16% of their revenues,” the report said. And if the U.S. bans semiconductor companies from selling to Chinese customers, U.S. companies would lose nearly 40 percent of their revenues, the report said, leading to “severe” cuts in research and development and losses of thousands of jobs.

Hundreds of vessels dredged sand in North Korea’s Haeju Bay before illegally exporting it to China, according to a March report from C4ADS, a nonprofit data analysis organization. The operation, which took place in May 2019, violated United Nations Security Council resolutions and demonstrates “a level of sophistication unlike other known cases of North Korean sanctions evasion at sea,” the report said, shedding light on North Korea’s ability to “execute complex operations” to export goods. The sand was dredged by a “large fleet” that sailed from Chinese waters to North Korea, spiking traffic in Automatic Identification System traffic in the waters, the report said. The traffic was unusual because vessels rarely transmit their AIS numbers, in order “to avoid scrutiny from sanctions monitors.” The sand can be used to construct concrete, glass and silicon chips used on electronic devices, the report said.

Senate Communications Subcommittee Chairman John Thune, R-S.D., introduced legislation on March 5 meant to make sure “U.S. communications infrastructure security is a clear negotiating objective of our country’s trade policy,” he said in a news release. “This legislation would ensure the security of equipment and technology that create the global communications infrastructure are front and center in our trade negotiations, because you can’t have free trade if the global digital infrastructure is compromised.”

Export Compliance Daily is providing readers with some of the top stories for Feb. 18-21 in case you missed them.