The BR International Trade Report: April 2024

The BR International Trade Newsletter

Welcome to this month's issue 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

U.S. Department of Commerce (“Commerce”) amends semiconductor export controls.
Commerce's Bureau of Industry and Security ("BIS") issued a rule that clarifies various aspects of the sweeping export controls over advanced computing items and semiconductor manufacturing equipment that BIS promulgated in two rounds of rulemaking in October 2022 and October 2023.

United States and allies work to slow exports from China.
There is growing concern, and government action, over a surge of Chinese exports. Chinese subsidies in the steel, aluminum, clean-tech, and other sectors have resulted in significant overcapacity that is being exported to global markets for such products. While the United States and European Union have long expressed such concerns, they are now being joined by countries such as Argentina, Brazil, India, Indonesia, Mexico, and the United Kingdom in investigating allegedly dumped Chinese products. China has responded to the growing scrutiny by decrying the forces of protectionism, and most recently launching a case at the World Trade Organization against U.S. subsidies for electric vehicles. Companies with products that include Chinese inputs in their supply chains should pay close attention to developments that may affect their global operations.

Commerce updates freight forwarder guidance and best practices.
BIS published updated guidance to help freight forwarders comply with export controls. The new guidance comes as the United States attempts to further ensure “exporters prevent sensitive items from going to the wrong place, including in the hands of terrorists and other malign actors.”

U.S. Department of Homeland Security announces strategy to combat illicit textile trade.
The U.S. Department of Homeland Security has announced new measures targeting imports of textiles that may violate U.S. trade laws such as the use of forced labor. The agency will focus additional screening and targeting resources on the import of illicit goods under the so-called “de minimis” exception, conducting special operations to ensure cargo compliance, and expanding customs audits and foreign verifications.

House passes data privacy bill.
The U.S. House of Representatives approved the Protecting Americans’ Data from Foreign Adversaries Act, which would prevent data brokers from selling the personally identifiable sensitive data of American individuals to China, Russia, or other foreign adversaries or entities controlled by a foreign adversary. The Federal Trade Commission would have enforcement authority if the bill becomes law, and violations would be treated as a violation of Section 18(a)(1)(B) of the Federal Trade Commission Act.

Biden-Kishida summit works towards enhanced U.S.-Japan security collaboration.
Following a summit at the White House between President Biden and Japanese Prime Minister Fumio Kishida, a joint statement unveiled a range of initiatives under the auspices of a security partnership, including co-development of missiles, moon landings, fighter pilot training, establishment of a forum on defense industrial cooperation, and possible collaboration between the AUKUS security partnership and Japan. The statement also criticized China’s “escalatory behavior.”

Commerce seeks to strengthen antiboycott compliance.
BIS, in furtherance of its July 2023 amendment to the Boycott Reporting Form requiring companies to identify parties making a boycott-related request, published a non-exhaustive “public list of entities who have been identified as having made a boycott-related request in reports received by BIS.” BIS will update the list quarterly.

U.S. International Trade Commission publishes proposed amendment to its Rules of Practice and Procedure.
The U.S. International Commission released proposed rules updating its procedures for investigating imports that may be unfairly traded. While the proposals are generally procedural, companies involved in or considering such proceedings may wish to consult with their counsel to determine what impact these updates might have on their cases.  

United States and European Union focus on “legacy chips” from China.
The U.S.-EU Trade and Technology Council released a joint statement following its sixth ministerial meeting. Notably, the United States and the European Union agreed to extend two administrative arrangements, which focus on “identifying (potential) supply chain disruptors,” for a period of three years. The two sides emphasized “concerns about non-market economic policies and practices that may lead to distortionary effects or excessive dependencies for mature node (‘legacy’) semiconductors.” To facilitate efforts, the United States and the European Union will share market intelligence about “non-market” policies and practices.

Commerce suspends funding plans for semiconductor research and development facilities.
Commerce, in response to “overwhelming demand” for funding under the CHIPS and Science Act, has “suspended plans to issue a funding opportunity for the construction, modernization, or expansion of semiconductor R&D facilities.”

Chinese President Xi Jinping says that “external interference” cannot stop the “family reunion” between China and Taiwan.
President Xi made the remarks in a meeting in China with former Taiwan president Ma Ying-jeou, also stating that there were no issues between China and Taiwan that could not be discussed, and “no force that can separate us.”

In Case You Missed It...

Breaking down the Latest National Security Tech Regulations
The Biden administration has significantly intensified national security-related technology regulation recently, focusing in particular on China-related vectors of risk. Read More

Export Controls Are a New National Security Focus — What That Means for Banks
For years, U.S. authorities have focused on sanctions and anti-money laundering requirements as the main regulatory tools by which to disrupt adversarial countries, terrorist organizations, and other malign actors presenting national security risk, but 2024 will see the ascendancy of export controls, a different tool focused on flow of sensitive goods. Read More

Proposed Rules May Lead to Increased Compliance Requirements Ahead
Blank Rome partner, Anthony Rapa, co-chair of the firm’s International Trade practice, authored an article titled “Proposed Rules May Lead to Increased Compliance Requirements Ahead,” published in Security Magazine on March 19, 2024. Read More

Upcoming Events

April 17, 2024: Blank Rome partner Matthew J. Thomas will serve as a panelist at TradeWinds’ Shipowners Forum USA 2024, being held Wednesday, April 17, 2024, at the New York Yacht Club in New York, New York. Read More >>

April 29, 2024: Blank Rome partner Anthony Rapa will serve as a panelist at the American Conference Institute’s Economic Sanctions Enforcement and Compliance event, being held from Tuesday, April 29 through Wednesday, April 30 at the National Press Club in Washington, D.C. Read More >>

May 7, 2024: Blank Rome attorneys will be attending the American Bar Association’s 2024 ILS Annual Conference, being held May 7 through May 10 at the Grand Hyatt in Washington, D.C. Read More >>

To learn more about other recent developments or upcoming events, click here. To read about Blank Rome's International Trade practice, please visit our website.

© 2024 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reprint. Notice: The purpose of this update is to identify select developments that may be of interest to readers. The information contained herein is abridged and summarized from various sources, the accuracy and completeness of which cannot be assured. This update should not be construed as legal advice or opinion, and is not a substitute for the advice of counsel.