Beijing rebukes Biden's export controls

Presented by Save American Solar Jobs: Delivered every Monday by 10 a.m., Weekly Trade examines the latest news in global trade politics and policy.

Oct 11, 2022 View in browser   By Ari Hawkins and Steven Overly Presented by QUICK FIX — The annual meetings of the International Monetary Fund and World Bank are happening this week, giving trade and finance leaders a reason to come to Washington for tête-à-têtes with top administration officials. —  China sharply condemned the Biden administration's new export restrictions on semiconductors, adding tension to the already strained relationship between the world's largest economies. — Activists are already criticizing the new data protection pact between the U.S. and Europe, though industry groups say the arrangement will bring needed stability to transatlantic business. It's Tuesday, Oct. 11. Welcome to Morning Trade. We want to hear from readers: How is the soaring value of the U.S. dollar affecting trade in your industry? Share with us the impact on your imports and exports. Also, send the team your trade news: gbade@politico.com, soverly@politico.com, ahawkins@politico.com and dpalmer@politico.com.   A message from Save American Solar Jobs: President Biden put a two-year moratorium on new solar tariffs that threatened the U.S. solar industry. His Commerce Department, however, is continuing to pursue them – possibly to implement when the moratorium expires. If not stopped, these meritless tariffs would slam the brakes on solar deployment, undermining efforts by the President and Congress to promote clean energy jobs and address climate change. Commerce Secretary Raimondo: Please Reject Meritless and Damaging Solar Tariffs.   Want to receive this newsletter every weekday? Subscribe to POLITICO Pro. You'll also receive daily policy news and other intelligence you need to act on the day's biggest stories. Driving the Day TRADE LEADERS IN WASHINGTON THIS WEEK: The International Monetary Fund and World Bank hold their annual meetings this week, giving world finance and trade leaders a reason to flock to Washington. The precarious state of the global economy will be a central topic, with issues like persistent inflation and economic inequity taking center stage. U.S. Trade Representative Katherine Tai and Commerce Secretary Gina Raimondo are each scheduled to meet with European Commissioner for Trade Valdis Dombrovskis while he is in town. The trio are principals on the U.S.-EU Trade and Technology Council that is due to meet (and perhaps deliver tangible results) again soon; we'll be tracking for hints of what's to come. Meanwhile, Tai will also confab with World Trade Organization Director-General Ngozi Okonjo-Iweala amid ongoing efforts, chiefly led by the U.S., to reform the global trade body's now-defunct dispute settlement process. DEMS RAGE AT SAUDI ARABIA OVER OIL CUTS: Senate Foreign Relations Chair Bob Menendez (D-N.J.) vowed on Monday to block all future weapons sales to Saudi Arabia and urged the administration to "immediately freeze all aspects" of U.S. cooperation with the kingdom after its decision to cut oil production, POLITICO's Andrew Desiderio and Connor O'Brien report. Menendez has veto power over foreign arms sales. BEIJING VENTS FURY OVER EXPORT CONTROLS: China's Minister of Foreign Affairs had harsh words to describe the Biden administration's new export controls on semiconductor technology: "Out of the need to maintain its sci-tech hegemony, the U.S. abuses export control measures to maliciously block and suppress Chinese companies," spokesperson Mao Ning said over the weekend. Beijing's response follows new rules released Friday that added trade restrictions on companies exporting chips and related equipment to China and applied new export license requirements to less advanced chips destined for Chinese companies. Ning also warned the decision would "isolate and backfire" to harm both American and Chinese companies. The purpose of the restrictions is to complicate Beijing's push to advance its semiconductor industry and prevent "sensitive technologies with military applications" from being acquired by China's intelligence services, the Commerce Department's undersecretary for industry and security, Alan Estevez, said in a statement. The Biden administration now wants other countries to get on board. "We recognize that the unilateral controls we're putting into place tomorrow will lose effectiveness over time if other countries don't join us … And we risk harming U.S. technology leadership if foreign competitors are not subject to similar controls. That engagement is a priority for the Commerce Department," one senior official told POLITICO ahead of the announcement. The rules are just the first of a series of expected actions from the Biden administration and Congress before the end of 2020, including one executive order that strengthens federal oversight of American investment in China and another that limits data collection from Chinese firms, POLITICO's Gavin Bade and Brendan Bordelon report. Industry chimes in: The Semiconductor Industry Association, which represents corporate interests, urged Commerce in a statement to "implement the rules in a targeted way — and in collaboration with international partners — to help level the playing field and mitigate unintended harm to U.S. innovation."   JOIN WEDNESDAY FOR A TALK ON U.S.-CHINA AND XI JINPING'S NEW ERA:  President Xi Jinping will consolidate control of the ruling Chinese Communist Party later this month by engineering a third term as China's paramount leader, solidifying his rule until at least 2027. Join POLITICO Live for a virtual conversation hosted by Phelim Kine, author of POLITICO's China Watcher newsletter, to unpack what it means for U.S.-China relations. REGISTER HERE.     EU-U.S. DATA DEAL CHEERED BY BUSINESS, CHIDED BY ACTIVISTS: Leading voices in the global technology industry applauded an executive order President Joe Biden signed on Friday designed to limit the ability of American national security agencies to access personal information belonging to American and European citizens. Jason Oxman, the president and CEO of the Information Technology Industry Council, which represents companies like Microsoft, Google and IBM, said in a statement that the move "will help restore business certainty and safeguard continuity of key business operations as data moves across the Atlantic, while also upholding European citizens' fundamental rights." For its part, the White House also maintains that the framework strengthens existing privacy safeguards around U.S. intelligence collection activities, in part by specifying such surveillance may be done "only in pursuit of defined national security objectives" and giving people the ability to challenge how their data is used by national security agencies. But blowback is brewing: Privacy activists who have successfully sued under European law to strike down previous versions of the agreement argue the arrangement fails to sufficiently protect citizens from government surveillance. Austrian privacy activist Max Schrems, who spearheaded litigation to invalidate a prior iteration of the agreement, left the door open for future lawsuits and said the core issues of prior deals "were not solved" in the present version. And Ashley Gorski, a senior staff attorney at the ACLU National Security Project, said the agreement "does not go far enough," adding that "it fails to adequately protect the privacy of Americans and Europeans, and it fails to ensure that people whose privacy is violated will have their claims resolved by a wholly independent decision-maker." Meanwhile, in the U.K.: British Digital Secretary Michelle Donelan said after a meeting on Friday with Commerce Secretary Gina Raimondo that a pact to protect data moving between the U.S. and U.K. is coming within weeks, POLITICO Europe's Vincent Manancourt reports. MEXICO'S NEW SECRETARIAT OF ECONOMY SPURS USMCA DOUBTS: Mexican President Andrés Manuel López Obrador on Friday tapped Raquel Buenrostro as the next economy minister and chief trade negotiator in a move analysts see as a sign his energy policies will not be deterred by scrutiny from Ottawa and Washington. "[Buenrostro] fits the traditional profile of other cabinet members of the Obrador administration: 90 percent loyalty to the president and 10 percent experience and knowledge," Jorge Molina, head of FLG Strategic Market & Government Advice, a trade consultancy firm based in Mexico City, told POLITICO's Doug Palmer. As the country's tax chief, Buenrostro conducted a furious crackdown on large corporations alleged to be abusing loopholes. Her efforts led Walmart de Mexico SAB, a variation of the American retail giant, to shovel out the equivalent of more than $400 million as part of a larger group of dispute settlements that ultimately added $13 billion to the country's purse in 2020. Delicate debut: Buenrostro's new role comes amid arduous talks with the U.S. and Canada over Mexican energy policies that the northern neighbors say unfairly favor state-owned energy firms and discriminate against international suppliers in violation of the U.S.-Mexico-Canada agreement that entered into force in 2020. Most recently, the U.S. and Mexico agreed to continue consultations after 75 days of deliberations last week, temporarily avoiding a dispute resolution panel that could lead to new trade penalties if Mexico is found to be in violation. Buenrostro's arrival could shift the tone of those talks. Eric Farnsworth, vice president of the Council of the Americas, said the resignation of Buenrostro's predecessor, Tatiana Clouthier, "removed a voice of moderation and pragmatism that could certainly play into a sharper dynamic between the Mexican government, the United States and even Canada."   A message from Save American Solar Jobs:   IMPORTS PROJECTED TO SLOW IN COMING MONTHS: Data released Friday by the National Retail Federation and Hackett Associates project that imports at major U.S. ports will decline through the end of the year as consumer demand for foreign goods shows signs of returning to pre-pandemic levels. American imports in October are estimated to decline 9.4 percent compared to the same month last year, according to a Global Port Tracker analysis of cargo capacity. The pattern is expected to continue through December and into next year. "We're projecting a slowdown on total imports across the board for the next six months as the market evens out," said Daniel Hackett, partner at Hackett Associates, a global trade firm that tracks national cargo shipments.   LISTEN TO POLITICO'S ENERGY PODCAST: Check out our daily five-minute brief on the latest energy and environmental politics and policy news. Don't miss out on the must-know stories, candid insights, and analysis from POLITICO's energy team. Listen today.     International Overnight — Senate Majority Whip Dick Durbin (D-Ill.) questions if the U.S. should be trusting Saudi Arabia with critical trade decisions, reports MSNBC. — The decision by OPEC+ to slash oil production has set off bipartisan fury in Washington directed at the Saudi Arabia-led group, raising calls for a hard-hitting U.S. response, CNN Business reports. — Canada plans to ban more than 10,000 members of Iran's Islamic Revolutionary Guard Corps and will crack down on IRGC money laundering in Canada, our Canadian colleagues report. — A new survey shows Taiwanese companies with operations in mainland China are increasingly moving some of those operations to Southeast Asia, according to Nikkei Asia. — The oil cartel OPEC's choice to pare back oil supply will harm the global economy and especially developing countries according to U.S. Treasury Secretary Janet Yellen, our European counterparts report. — The U.S. on Friday announced new sanctions on North Korea in response to the flurry of missile tests the country conducted recently, according to POLITICO. THAT'S ALL FOR MORNING TRADE! See you again soon! In the meantime, drop the team a line: dpalmer@politico.com, gbade@politico.com and soverly@politico.com. Follow us @POLITICOPro and @Morning_Trade.   A message from Save American Solar Jobs: Commerce Secretary Raimondo: Please Reject Meritless and Damaging Solar Tariffs In June, President Biden acted to support the U.S. solar industry by using his executive authority to preserve existing trade policy and prevent any new tariffs on solar panel components from being implemented for two years. Now Congress has passed a groundbreaking package of investments and tax incentives that will dramatically expand domestic solar manufacturing going forward. Yet, the U.S. Commerce Department continues to consider solar tariffs that could be implemented after the President's tariff moratorium has expired. If not stopped, these meritless tariffs would slam the brakes on solar deployment, undermining efforts by the President and Congress to promote clean energy jobs and address climate change. Save American Solar Jobs urges Commerce Secretary Raimondo to reject these meritless and damaging solar tariffs once and for all.     Follow us on Twitter John Yearwood @john_yearwood Doug Palmer @tradereporter Gavin Bade @GavinBade Steven Overly @StevenOverly   Follow us

To change your alert settings, please log in at https://www.politico.com/_login?base=https%3A%2F%2Fwww.politico.com/settings This email was sent to rouf@idiot.cloudns.cc by: POLITICO, LLC 1000 Wilson Blvd. Arlington, VA, 22209, USA Please click here and follow the steps to unsubscribe.