It was a Republican President who inaugurated America’s openness to China 50 years ago, but it is Republicans in Congress who seem poised to begin closing the door. With the likelihood of a Republican takeover of the House and possibly the Senate in November, American businesses should prepare for a raft of anti-China measures that are likely to pass the House in the new Congress.

House Republican Leadership intends to include China decoupling legislation among its top 10 priorities in 2023. Unlike many foreign policy issues on which voters express little interest, this new decoupling fervor is being driven by Republicans’ most enthusiastic voters.

In one recent unpublished poll, almost half of Republican voters agreed that the U.S. government should prohibit American companies from doing business in China, and fewer than one-third disagreed. Three times as many Republican voters strongly agreed with this view than strongly disagreed, demonstrating that voter intensity for decoupling is high.

In a time of heightened partisanship leading into another divisive election, 26 Republican Senators sent a letter supporting Speaker Nancy Pelosi’s trip to Taiwan – despite the fact that Pelosi is anathema to Republican voters. The subtext to the letter was that Republicans’ eagerness for a muscular confrontation with China trumps even election-year partisanship in some circumstances.

Continue Reading Republicans Likely to Push for Decoupling from China

In addition to the two developments we reported on in our last blog post, on July 7, 2022, the long-waited, final version of the Measures for Security Assessment of Cross-border Data Transfer (《数据出境安全评估办法》, “Measures”) were released by the Cyberspace Administration of China (“CAC”).  With a very tight implementation schedule, the

After more than seven months since China’s Personal Information Protection Law (《个人信息保护法》, “PIPL”) went into effect, Chinese regulators have issued several new (draft) rules over the past few days to implement the cross-border data transfer requirements of the PIPL.  In particular, Article 38 of the PIPL sets out three legal mechanisms for lawful transfers of personal information outside of China, namely: (i) successful completion of a government-led security assessment, (ii) obtaining certification under a government-authorized certification scheme, or (iii) implementing a standard contract with the party(-ies) outside of China receiving the data.  The most recent developments in relation to these mechanisms concern the standard contract and certification.

Chinese Government Issues Draft SCCs

On June 30, 2022, the Cyberspace Administration of China (“CAC”) released draft Provisions on the Standard Contract for the Cross-border Transfers of Personal Information (《个人信息出境标准合同规定(征求意见稿)》, “Draft Provisions”) for public consultation.  The full text of the Draft Provisions can be found here (currently available only in Mandarin Chinese).  The public consultation will end on July 29, 2022.

Continue Reading Cross-border Data Transfer Developments in China

Presidential Action Triggered by Crisis in the U.S. Solar Industry

In recent months, the U.S. solar industry has been in the midst of an existential crisis, triggered by the threatened imposition of retroactive and future tariffs on a significant portion of U.S. imports. That crisis began on April 1, 2022, when the Department of Commerce (“Commerce”) initiated an inquiry to determine whether solar cells and modules from Cambodia, Malaysia, Thailand, and Vietnam are circumventing antidumping (“AD”) and countervailing duty (“CVD”) orders on solar cells from China. Solar cells from these countries generally accounted for approximately 80% of U.S. solar module imports in 2020.[1] If Commerce finds circumvention, solar cells and modules from the four target countries could not only be subject to combined AD/CVD tariffs approaching 250%, but Commerce’s regulations also allow for the agency to apply these tariffs retroactively to merchandise entering on or after April 1, 2022 (and potentially as far back as November 4, 2021). This threat of AD/CVD tariffs triggered a steep decrease in imports of solar cells and modules from Southeast Asia, and caused parts of the U.S. solar industry to come to a stand-still, furthering domestic reliance on coal.[2] Given this paralysis in the solar industry, lawmakers and others urged the President to provide relief from potential AD/CVD tariffs.[3]

The President’s Response

On June 6, 2022, President Biden issued a declaration of emergency (the “Declaration”)[4] pursuant to section 318(a) of the Tariff Act of 1930, as amended (19 U.S.C. § 1318), and issued a determination pursuant to section 303 of the Defense Production Act of 1950, as amended (50 U.S.C. § 4533) (“the DPA Determination”)[5]. The Declaration finds that an emergency exists “with respect to the threats to the availability of sufficient electricity generation capacity” and authorizes Commerce to issue a moratorium on tariffs on solar cells and modules from Cambodia, Malaysia, Thailand, and Vietnam for up to a 24-month period, while the DPA Determination aims to “expand the domestic production capability” for solar cells during this 24-month period. The Declaration itself does not prevent the imposition of tariffs on imported solar cells and modules from the Southeast Asian countries, rather it authorizes the Secretary of Commerce to “take appropriate action” to permit the duty-free importation of solar cells and modules for 24 months after the Declaration’s issue date.[6]

Continue Reading President Acts to Prevent Import Tariffs on Solar Cells and Modules from Southeast Asia

On May 3, 2022, the Office of the U.S. Trade Representative (“USTR”) announced that it is initiating a statutory four-year review of necessity for the tariffs imposed on Chinese imports under Section 301 of the Trade Act of 1974 (“Section 301 Tariffs”). USTR’s review will examine whether to extend the tariffs currently in place on over $360 billion in Chinese imports.

Background

The Section 301 Tariffs were imposed based on the U.S. Administration’s determination in March 2018 that China’s technology transfer and intellectual property policies are harming U.S. companies. Between July 2018 and September 2019, the United States imposed four tranches of escalating tariffs on imports from China.

  • USTR imposed additional tariffs of 25 percent ad valorem on $34 billion of Chinese imports, effective July 6, 2018 (“List 1”).
  • USTR imposed duties of 25 percent ad valorem on an additional $16 billion of Chinese imports, effective August 23, 2018 (“List 2”).
  • USTR subsequently “modified” these tariff actions by imposing additional duties on supplemental lists of products in September 2018 (“List 3”) and September 2019 (“List 4A”).

By statute, the Section 301 Tariffs are set to expire four years after the tariffs were imposed, absent a written request for continuation submitted during the final sixty days of the four-year period by a representative of the domestic industry that has benefited from the tariffs.[1] The List 1 tariffs are set to expire July 6, 2022, and the List 2 tariffs are set to expire August 23, 2022. If a request is filed, the statute directs USTR to conduct a “review of necessity” regarding any extension of the tariffs.

First Phase of the Four-Year Review

USTR’s four-year review will proceed in two phases. In this first phase of the review process, USTR is notifying representatives of domestic industries that have benefited from the Section 301 Tariffs of the possible termination of the tariffs and of the opportunity to request a continuation of the tariffs.

Continue Reading USTR Initiates Four-Year Review of Necessity for Section 301 Tariffs on Chinese Imports

On October 4, 2021, U.S. Trade Representative Katherine Tai announced during a speech at the Center for Strategic and International Studies in Washington, D.C., that the United States would be launching a new trade strategy toward China.  Tai’s announcement comes on the heels of a months-long, comprehensive review of the U.S. trade policy toward China,

Five years ago today, Xiyue Wang was unjustly detained in Iran while conducting research there for his Ph.D. dissertation. We and others at Covington were honored to participate in the global advocacy campaign that culminated in Mr. Wang’s release in December 2019. Here, for the first time publicly, we discuss our work on his case.

As discussed in our previous article on the topic, China’s new 14th Five-Year Plan is a vast document that outlines the country’s ambitious plans for the 2021-2025 period. Technology and the environment are two main themes of the plan, with several chapters dedicated to describing how China’s leaders hope to steer the country into an

As discussed in our previous article on the topic, China’s 14th Five-Year Plan (“FYP”) is a vast document that outlines the country’s ambitious plans for the 2021-2025 period. Technology is a core focus of the plan, with several chapters dedicated to describing how China’s leaders hope to transform the country into an innovation powerhouse. The

In coordinated action on 22 March 2021, the EU, US, Canada and the UK imposed sanctions on four Chinese officials accused of complicity in human rights violations in Xinjiang. The Chinese responded by imposing sanctions on a group of MEPs, European academics and think-tanks on 23 March and followed these announcements by imposing retaliatory sanctions