Trump Rule on China Tech Transactions to Remain in Place
WASHINGTON — A Trump-era regulation allowing the Department of Commerce to block technology-related business transactions determined to be national security threats will remain in place, against the wishes of some of the country’s business stakeholders.
The rule, scheduled to take effect this month, derives from a 2019 executive order from former-President Donald Trump. The department will hear public comments on the issue through March 22, at which point the rule becomes effective.
“Trustworthy information and communications technology and services are essential to our national and economic security and remain a top priority for the Biden-Harris administration,” a Commerce Department representative said in a written statement.
The rule was designed to secure domestic supply chains from foreign threats, specifically from China. Previously, the Commerce Department under the Trump administration issued rules prohibiting foreign companies from selling American-made computer chips to the Chinese technology company Huawei without federal approval.
Business Roundtable, a stakeholder group consisting of CEOs from major U.S. companies, said the rule as it was written was overly broad and would lead to adverse economic consequences without improving supply chain security. The association warned against expanding the Commerce Department’s authority to review and block transactions without a benchmark or notice of what types of transactions fall under the rule.
“If implemented in its current form, the Proposed Rule will create uncertainty and confusion that could undermine both U.S. competitiveness and national security objectives,” BRT said in a written statement. “Foreign partners will do less business with U.S. companies given the open-ended risk that a wide range of completed transactions could fall within the Proposed Rule regime and be disrupted without notice. Such an approach could weaken U.S. economic leadership and competitiveness in the (information and communications technology and services) sector and undermine the national security benefits of this leadership.”
BRT, in its comments, suggested the department propose a new rule that would specify the types of transactions that would be covered and excluded, adjust the criteria designating foreign adversaries, and contain an optional safe harbor process to preserve business’s transactional confidence.
Further, the association said the rule should include measures that avoid redundancies with existing national security statutory and regulatory entities and designate which technologies are of concern.
“IBM strongly urges the incoming Biden administration to suspend immediately the Commerce Department interim rule on IT supply chain security that was issued in the midnight hour of the outgoing administration,” the company said in a written statement. “The Commerce Department ignored volumes of input from the business community.
“The interim rule would subject hundreds of billions of dollars of legitimate U.S. commerce to vague and arbitrary government regulation without enhancing national security in a meaningful and targeted way. It will damage the U.S. economy, boost foreign competitors and violate due process protections.”
In January, the U.S. Chamber of Commerce submitted a letter to Commerce Secretary Wilbur Ross with similar objections to the rule. In the letter, the chamber contends the rule grants the Commerce Department “nearly unlimited authority” to interfere with commercial transactions and that it lacks substantive measures aimed at transparency and accountability.
In addition to these objections, the chamber stated the proposed rule does not account for existing national security programs designed to minimize economic harm. The chamber suggested the rule be amended to narrow its scope, ensure accountability, protect confidentiality in the review process and outline more procedures for waivers, appeals, and mitigation.
“The chamber and our members agree with the department that the ICTS supply chain ‘is an attractive target for espionage, sabotage, and foreign interference activity,’” the text of the letter read. “However, securing the ICTS supply chain cannot be done without the U.S. business community’s involvement, and this proposal leaves U.S. businesses with little in terms of how to plan around potential threats or evaluate their own efforts (which are often done in coordination with other federal efforts) to secure the ICTS supply chain.”
In The News
NEW YORK (AP) — President Joe Biden said Thursday that the risk of nuclear "Armageddon" is at the highest level... Read More
NEW YORK (AP) — President Joe Biden said Thursday that the risk of nuclear "Armageddon" is at the highest level since the 1962 Cuban Missile Crisis, as Russian officials speak of the possibility of using tactical nuclear weapons after suffering massive setbacks in the eight-month invasion... Read More
Elon Musk has gotten into a Twitter tussle with Ukrainian President Volodymyr Zelenskyy after the tech billionaire floated a divisive... Read More
Elon Musk has gotten into a Twitter tussle with Ukrainian President Volodymyr Zelenskyy after the tech billionaire floated a divisive proposal to end Russia’s invasion. The Tesla CEO, soon facing a court fight over his attempt to abandon a $44 billion offer to buy Twitter, argued in a... Read More
UNITED NATIONS (AP) — President Joe Biden declared at the United Nations on Wednesday that Russia has “shamelessly violated the... Read More
UNITED NATIONS (AP) — President Joe Biden declared at the United Nations on Wednesday that Russia has “shamelessly violated the core tenets” of the international body with its war in Ukraine as he summoned nations around the globe to stand firm in backing the Ukrainian resistance.... Read More
WASHINGTON — Only days after the U.S. government announced a fresh round of tough sanctions against Russia, a Senate committee... Read More
WASHINGTON — Only days after the U.S. government announced a fresh round of tough sanctions against Russia, a Senate committee asked Tuesday whether it’s really enough. More revelations of torture and murder of Ukrainian civilians emerged in news reports this week. Each one was met with... Read More
UNITED NATIONS (AP) — In an alarming assessment, the head of the United Nations warned world leaders Tuesday that nations... Read More
UNITED NATIONS (AP) — In an alarming assessment, the head of the United Nations warned world leaders Tuesday that nations are "gridlocked in colossal global dysfunction" and aren't ready or willing to tackle the challenges that threaten humanity's future — and the planet's. "Our world is... Read More
BEIJING (AP) — Chinese President and head of the ruling Communist Party Xi Jinping is expected to meet with his... Read More
BEIJING (AP) — Chinese President and head of the ruling Communist Party Xi Jinping is expected to meet with his Russian counterpart Vladimir Putin during a visit the neighboring Central Asian nations of Uzbekistan and Kazakhstan this month, in what would be his first overseas visits... Read More