“If you’re using US-origin products, tools, machines, manufacturing equipment, software or technologies in your production outside the US, then the output of those factories is now subject to the US rules… these rules are now routinely applied not only to control the activities of US persons on US soil but also to control the activities of foreign persons and foreign products. In other words, the US rules now apply routinely extra-territorially.” – Karmi Leiman, WTS Taxise
US-China relationship at low point; threat is unique
WTS Taxise Consultant Karmi Leiman described the status of US-China relations as being at “the lowest point” with trade and technology as the key battleground for the two major economic powers. “We’ve been seeing tensions play out within the trade space. On the Chinese side, they have, on occasion, used their dominance in rare earths whereas the US has targeted telecom giants such as Huawei and ZTE…” He added the US-China rivalry will remain as the major geopolitical concern in the distant future.
Watch the recording below as Karmi discussed the state of play between US and China and what future holds amidst the ongoing tensions:
US regulations have extraterritorial components; non-US companies need to comply
The extraterritorial application of US Law and the October 7 rule play a major role in targeting advanced technologies and ensuring that the ability of companies to import advanced equipment and technologies into China is controlled. For companies in Asia, the proliferation of export control laws and regulations and ongoing geopolitical issues, according to Karmi, create a “harder line to walk”. He reiterated the importance of becoming an expert in the trade and compliance space for MNC executives. Watch the recording to learn more about how US rules apply even to non-US products and companies.
There are potential responses which companies in Asia may consider in relation to the ongoing trade tensions
WTS Co-Founder and Principal Eugene Lim presented a framework for companies in Asia on potential responses in relation to the growing US-China trade tensions. Eugene added that the current situation is at the “identified threat” level where export controls, tariffs and sanctions are imposed and openly targeted towards major economic power/s. View the recording for more details.
For more details about export sanctions and the US-China trade tensions in relation to your business in Asia, please contact Eugene Lim and Karmi Leiman.