The BR International Trade Report: February 2024
Welcome to the first edition of The BR International Trade Report, Blank Rome’s monthly digital newsletter highlighting international trade, cross-border investment, and geopolitical risk issues, trends, and laws impacting businesses domestically and abroad. We invite you to share this resource with your colleagues and visit Blank Rome’s International Trade webpage for more information about our team.
Recent Developments
IaaS / cloud computing proposed rule. The U.S. Department of Commerce (“Commerce”) issued a proposed rule aimed at preventing foreign actors from utilizing U.S. Infrastructure as a Service (“IaaS”) products (i.e., certain cloud services) to engage in malicious cyber-enabled activity, specifically by imposing certain due diligence and reporting requirements on U.S. IaaS providers and their foreign resellers. See our alert summarizing the proposed rule.
U.S.-China trade decline. Based on a recent Commerce report, U.S.-China trade sharply declined in 2023, with the trade deficit plunging to its lowest level since 2010 (subscription required). Imports from China fell by 20 percent, as compared with a five percent decline for imports generally, amidst reports regarding U.S. efforts to “de-risk” and diversify supply chains. Notably, the United States imported more from Mexico than from China (subscription required) for the first time since 2004.
U.S. and China officials plan working group meeting. Reports indicate that U.S. and Chinese officials are planning to hold the first meeting of the “Commercial Issues Working Group” in the coming months. The working group is intended to address issues of concern for the respective countries’ business communities.
William Lai (DPP) wins Taiwan presidential election. William Lai, the Democratic Progressive Party (“DPP”) candidate opposed by China, won the presidency in Taiwan’s general elections, although the DPP lost its majority in the legislature. The election figures to have significant implications for cross-strait relations, as well as Taiwan’s relationship with the United States and broader geopolitical posture.
DoD issues list of Chinese military companies. The U.S. Department of Defense (“DoD”) designated a number of companies as “Chinese Military Companies Operating in the United States.” DoD, effective June 30, 2026, will be prohibited from entering into contracts with such companies, and effective June 30, 2027, will be prohibited from purchasing goods or services (directly or indirectly) sourced from such entities, in each case pursuant to Section 805 of the National Defense Authorization Act for Fiscal Year 2024.
DoD issues industrial strategy. DoD issued its first-ever National Defense Industrial Strategy, aiming to set the U.S. defense supply chain on course for a years-long paradigm shift in meeting critical needs in an era of great power competition. The strategy rests on the four pillars of resilient supply chains, workforce readiness, flexible acquisition, and economic deterrence. Partner Anthony Rapa talks about this more in depth in Defense One.
New Russia/Belarus sanctions and export controls. The U.S. Department of the Treasury imposed sanctions restricting imports of certain Russian diamonds, including diamonds processed in third countries, while Commerce issued new export controls targeted at Russia and Belarus. The Commerce action targets 94 types of items (including industrial equipment and certain aircraft items), imposes new restrictions targeting Iran’s supply of drones to Russia, and provides guidance to industry on the “order of review” for Russia/Belarus export controls.
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Dealmakers have a full plate these days with high interest rates, persistent inflation, the nascent artificial intelligence (“AI”) revolution, and the shifting sands of international relations and politics complicating projections and decision making. Tracking, reviewing, and synthesizing information across a range of disciplines is more challenging than ever with significant business implications for the profit-driven enterprise. Read More >>>
Upcoming Speaking Engagements
- The Present and Future of U.S. Export Control Enforcement: On February 28, 2024, Blank Rome partner Anthony Rapa will serve as a session moderator at American Conference Institute’s Advanced Forum on Global Export Controls, being held in Washington, D.C. Read More >>
- The Impact of Sanctions and Security Concerns in Maritime Industry: On March 14, 2024, Blank Rome Maritime partner Matthew J. Thomas will serve as a panelist at CMA Shipping 2024, Connecticut Maritime Association’s (“CMA”) 39th Annual Expo & Conference, which will be held March 12 through 14, 2024, in Stamford, Connecticut. Read More >>