Washington has stepped up to impose new restrictions on US exports of certain items to China in an attempt to stop Beijing from using them for its military purposes. On Monday, April 27, 2020, the US government announced that it would implement some new rules on its exports to China especially semiconductor production equipment and other technology to keep away from Beijing’s military use.
Meanwhile, John Neuffer, president and chief executive of the Semiconductor Industry Association, said the broad rules would “unnecessarily expand export controls for semiconductors and create further uncertainty for our industry during this time of unprecedented global economic turmoil.”
New Restrictions on US Exports to China
The new move of the US would affect the existing trade relationship with China amid the widening impact of the coronavirus outbreak, which shattered the global economy. The new rules, which were posted for public inspection and would be set to publish in the Federal Register on Tuesday, could hurt the semiconductor industry and sales of civil aviation components to China.
Under the new terms, it would be required to get licenses for US companies to sell certain items to companies in China that could be used for military development, even if the products are meant for civilian use. With the present policy, some of these sensitive technologies could be sold by US companies under a civilian exception without a license.
Changes in the US export policy, which sought to expand the universe of items requiring licenses, would also affect Russia and Venezuela, besides China. New rules involving eliminating civilian license exceptions for Chinese importers would apply countries including Ukraine and Russia to sectors such as certain integrated circuits, telecommunications equipment, radar, and high-end computers.
Preventing the Equipment from Military Use
US Commerce Secretary, Wilbur Ross said in a statement, “It is important to consider the ramifications of doing business with countries that have histories of diverting goods purchased from US companies for military applications,” referring to China. Republican Senator, Ben Sasse supported the new rules by saying that Chinese General Secretary, Xi Jinping “has erased any daylight between China’s businesses and the Communist Party’s military.”
On a similar note, Washington trade lawyer Kevin Wolf said the new policy was a response to the Chinese policy of military-civil fusion, which sought military applications for civilian items. Citing that the definitions of military use expanded beyond the scope from the People’s Liberation Army, wolf reflected, “A military end-user is not limited to military organizations,” adding that “A military end-user is also a civilian company whose actions are intended to support the operation of a military item.”
Washington trade lawyer Doug Jacobson responded a question and said, “Obviously this is intended to give the U.S. government more visibility into the types of goods U.S. exporters send to these countries and their customers.”
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