Washington Update

The Commerce Department reportedly plans to propose a ban on high-level Chinese software in autonomous and connected vehicles. The proposed rule, which is expected to be unveiled in the coming weeks, would bar Chinese software in US vehicles with Level 3 automation or higher, as well as ban vehicles with Chinese-developed advanced wireless communications abilities modules.

The Commerce Department’s Bureau of Industry and Security (BIS) on Monday released two notices of proposed rulemaking on military and intelligence end uses and users and crime controls. The rules are the largest expansion of US export controls since the system was overhauled in 2018.

The presumptive Democratic nominee for president, Vice President Kamala Harris, has yet to release a platform. When she does, her stance on trade with China is unlikely to diverge dramatically from that of the Biden administration.

When it comes to China policy, former President Donald Trump’s newly tapped running mate is just as, if not more, hawkish than Trump himself, another sign that the Trump campaign is gearing up to restart its America First foreign policy.

House Speaker Mike Johnson (R-LA) on Monday confirmed rumors that the House plans to vote on a series of highly-anticipated China legislation this fall. Speaking at the Hudson Institute, Johnson specifically mentioned bringing the BIOSECURE Act, the End China’s De Minimis Abuse Act, a provision on restricting US outbound investment to China, and a sanctions package targeting Chinese entities supporting Russia’s aggression in Ukraine to a floor vote.

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).

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 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.

The Office of the US Trade Representative (USTR) announced that it would only extend existing Section 301 tariff exclusions for 352 products and 77 COVID-related medical care items until June 14. They were previously set to expire today.

On the heels of announcing tariff hikes last week, the Office of the US Trade Representative (USTR) yesterday issued a federal register notice (FRN) on its new tariff exclusions process. USTR is expected to issue another FRN soon that will decide the fate of existing exclusions, which are set to expire at the end of the month.