U.S. to move forward with Trump Era Rule Targeting Chinese Technology Threats

Published on 26 Feb 2021

According to the Wall Street Journal, despite objections from U.S. businesses, the Biden administration is planning to move forward with a rule that targets Chinese technology threats. The rule will come into affect from March 2021.

As per the new rule, the Commerce Department will have the authority to ban and technology-related business transactions that are determined to poste a threat to national security. When the rule was first proposed in November, the justification for its need was to secure U.S supply chains. However, businesses in telecommunications, technology and finance among other industries have criticized the rule over fears that it will hurt competitiveness and stifle innovation. Businesses had hoped the rule would be delayed as the Biden administration has taken on a broad review of U.S. policy on Chinese technology.

However, sources familiar with the matter told the Journal that Biden's administration plans to let the rule move forward. The administration is concerned that tying to dilute or block the rule will send the wrong signal to people about their approach to China. The current administration wants to avoid criticism that it is softening its approach towards the Asian superpower.

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The administration has taken steps to signal to the business community that the rule will not be enforced aggressively. However, critics say that despite enforcement the new rule will add additional compliance costs and uncertainty that will be burden to firms particularly smaller ones. There have also been conflicting reports with other sources claiming the administration will not hold back on the rules enforcement.

A representative for The Business Roundtable, a group of CEOs of major companies left a comment on the Commerce Department's website saying, "The rule is unworkable for U.S. businesses in its current form and should not be considered for final publication without significant revisions."

A spokesperson for the Commerce Department has said that they will continue to accept public comment with regards to the rule until March 22 post which the rule will be finalized. “Trustworthy information and communications technology and services are essential to our national and economic security and remain a top priority for the Biden/Harris administration," the spokesperson added.

The White House has not commented on the story.

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