Japan's September exports plunged due to supply chain pressures, with the growth of overseas shipments dropping 3.9% from August, the Ministry of Finance said. Japan saw its starkest drop in auto exports, essentially wiping out the gains seen from shipments of steel and chip components. Exports rose 13% from September 2020, the report said.

Tariffs imposed on goods from China during the previous administration likely contributed to the ongoing chip shortage, though an increasing demand and port congestion are bigger factors, Commerce Secretary Gina Raimondo and Sen. Todd Young, R-Ind., said. Speaking during an Oct. 20 event hosted by The Washington Post, both underscored the severity of the supply chain crisis and said lawmakers should move faster to pass legislation that would provide more funding to the semiconductor industry.

A multinational semiconductor company may have violated U.S. export controls when it transacted with two Chinese technology companies on the Entity List, according to its October Securities and Exchange Commission filing. Arteris, which is headquartered in California, said it maintained a business “relationship” with HiSilicon Technologies Co. and Chongxin Bada Technology Development Co., Ltd., which may have resulted in “inadvertent” violations of the Export Administration Regulations. The Bureau of Industry and Security added HiSilicon to the Entity List in 2019 as an affiliate of Huawei (see 1905160072) and added Bada in 2020 (see 2008260038).

U.S. intervention in the transaction between South Korea’s Magnachip Semiconductor Corp. and Beijing’s Wise Road Capital could set a new precedent for investment reviews and lead to more extraterritorial screening by U.S. trading partners in Europe and elsewhere, lawyers said.

Export Compliance Daily is providing readers with the top stories for Oct. 4-8 in case you missed them. You can find any article by searching the title or by clicking on the hyperlinked reference number.

Intel is optimistic about the results of last week’s inaugural meeting in Pittsburgh of the EU-U.S. Trade and Technology Council (see 2110010036) because it has “significant operations on both sides of the Atlantic, including semiconductor plants and R&D centers,” blogged Chief Trade Officer Jeff Rittener Oct. 5. “The conversations that took place take us one step closer to alignment on regulatory policies to help reduce trade barriers.” The TTC established a multilateral approach to export controls as a top priority for “supporting a global level-playing field,” he said. “A harmonized export control regime among like-minded transatlantic partners would ensure products are available in an increasingly digital world.” The regime has “significant potential for increased cooperation and harmonization between the U.S. and the EU, especially as narratives such as technological sovereignty and open strategic autonomy shape dialogues,” Rittener said. “[B]oth entities should make sure that any new controls are smart controls that meet the national security objectives of the EU and U.S.”

Two Chinese scholars specializing in international trade said they found U.S. Trade Representative Katherine Tai's Oct. 4 speech (see 2110040008) encouraging, even though she criticized Chinese adherence to market principles and the effect that has on companies around the world.

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The Commerce Department this week announced the official launch of its early alert system to better manage semiconductor supply chain disruptions (see 2109240029). The Microelectronics Early Alert System, which will be administered by the International Trade Administration, will pull from information voluntarily submitted by companies about ongoing supply chain issues, including COVID-19-related plant closures, which will help the government coordinate resources to address those problems. This may include “engagement” with foreign governments or other activities to “safely reopen these critical microelectronics and semiconductor facilities,” Commerce said. The agency hopes the alert system can help it better address real-time supply chain issues, especially those related to the global chip shortage.

While too early to declare a success, the U.S.-European Union Trade and Technology Council has set both sides on a path toward tangible progress on more export controls and investment screening collaboration, experts said. During the inaugural TTC meeting last week, the U.S. and EU agreed to develop “convergent” export controls and share more information to catch malign foreign investments (see 2109290083), which could result in meaningful changes within the next year, the experts said.