Research & Analysis

On June 12, the European Commission announced provisional countervailing duties of up to 38.1 percent on Chinese-made electric vehicles (EVs) beginning July 4. The commission’s announcement followed a May 14 announcement from the Office of the United States Trade Representative that it would be increasing Section 301 tariffs on Chinese-made EVs from 25 percent to 100 percent beginning August 1.

International travelers are returning to China. In Q1 2024, there was a 305 percent year-on-year increase in foreign national inflows—a trend spurred by loosened entry restrictions and efforts to boost the economy since the Chinese government lifted its zero-COVID policy in late 2022.

The Treasury Department last Friday issued a highly anticipated notice of proposed rulemaking (NPRM) to curb US capital flows to sensitive, dual-use technologies in China. Once implemented, the rule will enact tighter regulations for US corporations and investors that seek to conduct investment activities in China in a defined range of technologies, including semiconductors, quantum computing, and artificial intelligence (AI).

On June 21, the US Department of the Treasury issued a highly anticipated draft rule aimed at curbing the flow of US capital into sensitive, dual-use technologies in China. The rule, once implemented, will enact novel filing requirements—and, in certain cases, prohibitions—for US corporations and investors that seek to conduct investment activities in a defined range of technologies, which includes semiconductors, quantum computing, and artificial intelligence (AI).

Congress’s National Defense Authorization Act (NDAA) moved forward last week, with both the House and the Senate advancing, at different stages, separate versions of the annual defense bill. On Friday, the House passed its version of the bill by a narrow margin of 217-199, while the Senate Armed Services Committee approved its own version by a vote of 22-3 to advance to the Senate floor.

In recent weeks, the Office of the US Trade Representative (USTR) has made a series of announcements related to the package of new Section 301 tariffs targeting $18 billion of Chinese imports. These announcements, taken together with the results of USTR’s review of the original Section 301 actions, suggest tariffs will be an enduring feature of the US-China trade landscape for years to come.

In recent years, the United States and China have expanded their respective trade controls and sanctions systems to cover a broadening segment of bilateral commerce. The rapid pace of expansion, complexity of rules systems, and lack of transparency on both sides have raised compliance costs, injected significant uncertainty into business planning, and disrupted business relationships between both countries.

With carbon capture, utilization, and storage (CCUS) and methane emerging as the two main areas of consensus on climate cooperation between the United States and China, both areas present opportunities for companies operating in these fields. Climate envoys John Podesta and Liu Zhenmin focused on these two areas during a meeting in Washington, DC, in early May.

In an interview with TIME magazine published on Tuesday, President Joe Biden defended recently announced Section 301 tariff hikes, saying they are a necessary and proportionate response to unfair Chinese economic practices.

Nearly half a year after the introduction of State Council Document 11 (“24 Measures”), the State Council issued Document 9 (“New 24 Measures”), which vows to expand market openings for foreign producers of gene diagnostic and treatment technologies as well as advanced medical equipment.