US-China Trade Controls: Everything Everywhere All At Once

Clamping down on trade with China is apparently one of the few remaining bipartisan causes in American politics.  The US has expanded its China-related tariff and sanctions regime introduced in the Trump administration, which included the Uyghur Forced Labor Prevention Act, and Section 889 of the National Defense Authorization Act of 2019, which placed broad restrictions on trade with Huawei, ZTE, and other Chinese tech giants.  Recently, the regulatory aperture has widened to include:

• Restrictions on US investments in strategic industries such as semiconductors and quantum computing;
• February's Executive Order limiting bulk transfers of US sensitive personal data (e.g., biometric, health, financial, and geolocational) to countries of concern, including China;
• September's BIOSECURE Act, limiting all US commercial interactions with five Chinese life sciences companies; and
• Proposed De Minimis Reform designed to close the sub-$800 import exemption for small-value shipments, which has fueled the sales of e-commerce companies such as Shein and Temu, but has also been used as an import loophole for contraband, particularly fentanyl precursor products.

China has responded with blocking statutes and trade controls of its own, including:

• 2021's Anti-Foreign Sanctions Law, which authorizes countermeasures against foreign entities and individuals that impose sanctions on Chinese entities;
• The Data Security, Personal Information and Counterespionage Laws of 2022-23, which  greatly restricted the flow outside of China of corporate and personal data thought to be of economic or national security value;
• The 2022 “Unreliable Entity List” which places sanctions on companies, organizations, and individuals considered by the Chinese government to have acted counter to Chinese interests; and
• 2023 Export controls focused on strategic Chinese exports such as rare earth minerals, drones, and aerospace technology; 

The emerging picture is that of a massive circling of wagons on both sides, with the incoming Trump administration promising to increase the pressure.  US firms with interests in China face a minefield of competing regulatory requirements in ‘conflict of laws’ scenarios, where the risk of running afoul of one government or the other is higher than ever. 

To successfully navigate this minefield, organizations with a China connection will need to redouble their monitoring efforts to avoid potential exposure to any number of these trade restrictions. It will require the combined use of monitoring technology, diligence, internal audit and investigations to maintain a clear line of sight into extended supply chains, sales and distribution channels, as well as potentially applicable products and components.