The U.S. government decision to increase license requirements for certain foreign exports to Huawei may damage U.S. companies more than Huawei and China, experts said. The same may be true for sanctions being prepared against China for interference with Hong Kong’s autonomy (see 2005220011), the experts said, which may present a large challenge for U.S. businesses. “If the administration follows through on the kinds of threats that they’re talking about … it will have a hugely negative impact on U.S. companies operating there, it will have a hugely negative impact on the people of Hong Kong, and it will have a minuscule effect on China,” said Nicholas Lardy, a Chinese economy expert at the Peterson Institute for International Economics.
Exports to China
Secretary of State Mike Pompeo said, “No reasonable person can assert today that Hong Kong maintains a high degree of autonomy from China, given facts on the ground,” in a statement May 27 to Congress that Hong Kong no longer warrants the same treatment under U.S. laws as it did before the handover to China in 1997.
7The government of Canada issued the following trade-related notices as of May 20 (note that some may also be given separate headlines):
The U.S. is considering a variety of sanctions, asset freezes and controls on transactions for China’s planned crackdown on Hong Kong’s autonomy, according to a May 26 report from Bloomberg. The Treasury Department could target Chinese officials and companies, the report said.
Two senators plan to introduce a bill they say will expand U.S. sanctions against Chinese efforts to meddle in Hong Kong’s autonomy. The bill would impose sanctions on Chinese policymakers and entities and would introduce secondary sanctions against certain banks, said Sens. Pat Toomey, R-Pa., and Chris Van Hollen, D-Md.
Export Compliance Daily is providing readers with some of the top stories for May 18-22 in case you missed them.
China will allow imports of Indonesian dragon fruit, the country’s General Administration of Customs said in a May 23 notice. The notice includes quarantine and phytosanitary requirements for imports.
China criticized the U.S.’s decision to add more Chinese companies to its Entity List (see 2005220058), adding that it will take measures to “protect the legitimate rights and interests of the Chinese enterprises.” A Chinese Foreign Ministry spokesperson said the U.S. has “overstretched the concept of national security” and abused its export controls. “We urge the U.S. to correct its mistake, rescind the relevant decision, and stop interfering in China's internal affairs,” the spokesperson said during a May 25 press conference.
Japan’s Ministry of Economy, Trade and Industry released its annual “unfair trade report,” which details foreign countries’ trade policies that are inconsistent with World Trade Organization rules, according to an unofficial translation of a May 25 notice. The report includes unfair trade policies conducted by a range of Asian countries -- including China, Vietnam, Indonesia and India -- as well as the European Union.
A new law being considered by China’s National People's Congress could trigger U.S. export controls and cause the U.S. to revoke Hong Kong’s special customs status, said Jude Blanchette, a China expert at the Center for Strategic and International Studies. The new national security law, which is expected to be proposed during China’s current NPC session, would criminalize “treason, sedition and secession,” Blanchette said, and will likely cause the U.S. to enact measures under the Hong Kong Human Rights and Democracy Act, which passed in November 2019 (see 1911290012).