The U.S. will grant new Section 232 exclusions for steel and aluminum imports from the EU as part of a deal that will also extend the tariff rate quotas on EU steel and aluminum and avoid EU retaliatory tariffs on U.S. exports.
The Bureau of Industry and Security this week added 13 Chinese companies to its Unverified List after it was unable to verify the “legitimacy and reliability” of the entities through end-use checks, including their ability to responsibly receive controlled U.S. exports. If BIS is unable to complete an end-use check on those companies within 60 days, it can move them to the more restrictive Entity List.
The U.K. announced plans this week to put in place a carbon border adjustment mechanism, which could lead to new import taxes and due diligence requirements on aluminum, cement, ceramics, fertilizer, glass, hydrogen, iron, steel and other industrial sectors associated with high carbon emissions. The mechanism, which is expected to be implemented in 2027, came after a 12-week public comment period in which over 100 representatives from industry, non-governmental organizations, think tanks and academia gave input about the types of products that should be covered, how import taxes should be calculated, a timeline for implementation and more.
The EU this week announced a new wide-ranging package of Russia sanctions, including designations of more than 140 people and companies as well as new import restrictions on Russian raw materials used to produce certain metals and new export controls on dual-use technology and industrial goods. The package also includes new restrictions on exports of industrial-related services, a broader ban on Russian energy products, a “tighter obligation” for member states to trace assets of sanctioned parties, new anti-sanctions circumvention measures and more.
The Bureau of Industry and Security last week removed four Chinese companies from the Unverified List after it was able to successfully complete end-use checks.
If U.S. policymakers become tempted to use sanctions to prevent a potential conflict with China, they should expect to face a wide range of challenges in wielding such economic tools, speakers said at a Dec. 15 event hosted by the Center for a New American Security.
A trade group is urging the Bureau of Industry and Security to revise its export controls surrounding encryption and mass-market goods, saying some of those less-sensitive items should no longer be subject to strict license requirements. The group also asked BIS to eliminate some encryption-related reporting requirements that burden compliance professionals and said the agency should devote more resources to its licensing division, which will help speed up decisions on applications and classification requests.
Although scholars from the U.S., Japan and South Korea said the three countries largely agree on China-related semiconductor export controls, they said those conversations could grow more difficult as the U.S. continues to restrict a broader set of advanced chips and chipmaking equipment.
The semiconductor industry is pushing the Biden administration for more transparency surrounding its future plans for export controls on chips and chip tools, saying the uncertainty is causing more foreign customers to avoid using advanced U.S.-origin technology. The industry also warned that China has seen a sharp uptick in domestic orders for chips and chipmaking equipment following the most recent U.S. controls, potentially jeopardizing sales to the American semiconductor industry’s largest market.
The Bureau of Industry and Security is working more closely with the Office of Foreign Assets Control on enforcement issues, which could allow the two agencies to better align the BIS Entity List and OFAC’s Specially Designated Nationals List, a BIS official said this week.