/>iRecent Developments
Donald Trump elected as 47th President of the United States.
On November 5, 2024, former President Donald Trump was elected for a second term in office—becoming the second president, after Grover Cleveland, to be elected to non-consecutive terms. Throughout his campaign, President-elect Trump promised to impose a 10–20 percent tariff on all imports into the United States, in addition to a 60 percent tariff on imports from China. Republicans also made electoral gains in the U.S. Congress, including taking control of the Senate. Many of them also campaigned on similar trade messages, meaning President-elect Trump could have more legislative support for his policies than he did in his previous term. Notably, as a possible early indicator of the incoming administration’s policy approach, the President-elect selected Representative Mike Waltz (R-FL), a China hawk, as his National Security Advisor.
U.S. Department of the Treasury (“Treasury”) finalizes rule regulating U.S. outbound investment.
On October 28, 2024, Treasury issued its long-awaited final regulations implementing President Biden’s August 9, 2023 executive order on U.S. outbound investment in China’s semiconductor, quantum, and artificial intelligence sectors. Effective January 2, 2025, the rule—mostly preserving the framework of a June 2024 proposed rule—prohibits certain U.S. investments in Chinese and China-linked investment targets in the sectors at issue (including, in certain instances, investments outside China), and requires U.S. persons to notify Treasury of certain other covered transactions. The new regulations will introduce significant due diligence requirements for investors in the impacted sectors. Read our previous analysis of the proposed rule here.
Germany’s ruling coalition falls apart, with snap elections scheduled for February.
On November 6, 2024, German Chancellor Olaf Scholz fired Finance Minister Christian Lindner, leading to a collapse of the German government’s ruling coalition and paving the way for snap elections, which are scheduled for February 23, 2025. The coalition of Scholz’s Social Democrats, Lindner’s Free Democrats, and the Greens had been struggling over economic legislation, with the disagreements culminating in Lindner’s removal and the resignation of three other Free Democrat ministers.
Mexico challenges proposed connected vehicle ban by United States.
The Government of Mexico has submitted public comments regarding a recently proposed rule by the U.S. Department of Commerce (“Commerce”) that would ban U.S. imports of automobiles containing certain connected hardware or software originating in China or Russia. See our prior alert regarding the proposed rule. Mexico claims that the proposed rule would violate the United States-Mexico-Canada Agreement and World Trade Organization rules, and could harm the Mexican economy by disrupting the supply chain and increasing automobile assembly costs.
China issues dual-use export control regulations.
On October 19, 2024, China’s State Council issued regulations implementing China’s Export Control Law governing dual-use exports, which was enacted in 2020. Effective December 1, 2024, the new rules will regulate exports out of China, re-exports abroad of Chinese-origin items, and even transactions involving non-Chinese items that incorporate Chinese content or are based on Chinese technology—jurisdictional grounds that resemble those under the U.S. Export Administration Regulations (“EAR”). This could significantly complicate the landscape for companies seeking to navigate China trade issues.
U.S. authorities revamp space-related export controls.
On October 17, 2024, Commerce and the U.S. Department of State (“State”) issued a raft of rules (one final rule, one interim final rule, and two proposed rules) intended to significantly update U.S. export controls on space launch vehicles, spacecraft, and other space-related items. Commerce’s rules remove controls under the EAR for exports of certain spacecraft and other space-related items to Australia, Canada, and the United Kingdom, and further remove controls for exports of certain space-related parts and components to over thirty allied countries. Meanwhile, Commerce’s and State’s proposed rules, issued respectively under the EAR and the International Traffic in Arms Regulations, would create exceptions from export licensing requirements for exports relating to official space agency programs, space tourism, and certain other space-related activities.
North Korean troops reportedly join forces with Russian Army.
Reports indicate that in recent weeks, approximately 11,000 – 12,000 North Korean troops traveled to Russia to support the Kremlin’s war against Ukraine, amassing in the Kursk Oblast. On November 7, 2024, Ukrainian President Volodymyr Zelensky confirmed that Ukrainian and North Korean forces have engaged in deadly combat on the battlefield. The United States has defended Ukraine’s wartime right to engage the North Korean troops in combat, maintaining that “should [North Korean] troops engage in combat support operations against Ukraine, they would become legitimate military targets.”Officials warn that the move by North Korea, and the deepening relationship between Pyongyang and Moscow, could heighten tensions in the Indo-Pacific region.
Modi and Xi show amicability at BRICS summit in Russia.
On October 23, 2024, Russian President Vladimir Putin hosted leaders from over 20 countries for a BRICS (an economic group named after its founding members of Brazil, Russia, India, China, and South Africa) summit in Kazan, Russia. Chinese President Xi Jinping and Indian Prime Minister Narendra Modi met to seek to improve Sino-Indian relations two days after India announced it had agreed to a deal to end the two nations’ military standoff in the Himalayas. Although the summit did not produce a clear message on Ukraine, the improving relations between the world’s two most populous countries were a positive for Russia, especially since India and China purchase roughly 90 percent of Russia’s oil exports.
G7 Price Cap Coalition issues updated advisory for maritime oil trade.
On October 21, 2024, Treasury’s Office of Foreign Assets Control (“OFAC”), under the auspices of the G7 Price Cap Coalition, issued an updated maritime oil industry advisory. The advisory focuses on ensuring industry stakeholders not only avoid involvement in the illegal “shadow trade” in sanctioned countries’ oil, but that they actively “prevent and disrupt” sanctions evasion. In addition, the update “provides stakeholders with new recommendations on meeting international obligations, enhancing due diligence around tanker sales, avoiding interactions with sanctioned counterparties, and raising internal awareness.”
U.S. Department of Justice (“DOJ”) issues proposed rule regarding personal data access by countries of concern.
On October 21, 2024, the DOJ proposed a rule aimed at addressing national security risks associated with the access, use, and exploitation of sensitive personal data of American citizens and U.S. government-related data by “countries of concern” (i.e., China, Russia, Iran, Cuba, North Korea, and Venezuela). The rule seeks to implement President Biden’s Executive Order 14117 of February 28, 2024 to strengthen safeguards around transactions involving bulk sensitive data, including data brokerage, access to human genomic data, and specific personal data linked to government personnel—all of which could be exploited for malicious activities such as cyber espionage or blackmail. Along these lines, the proposed measures also introduce requirements for vendor agreements and investment transactions with a nexus to countries of concern.
Pressure mounts for a trade response to China’s alleged role in the fentanyl crisis.
The petition for the U.S. government to open an investigation into China’s role in supporting the manufacture and export of fentanyl materials to the United States has received public support from a group of U.S. senators. Among other relief, the petition asks for the imposition of $50 billion in tariffs on Chinese goods and services. President-elect Trump made campaign promises to impose tariffs on Mexico and China as leverage to combat the flow of fentanyl into the United States.
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The 'ICTS' Rules: Technology Supply Chain Regulation Has Arrived
The U.S. Department of Commerce has significantly ramped up action under its regulations on securing systems, software, products and other technology infrastructure within the Information and Communications Technology and Services supply chain, issuing major rulemakings (two proposed and one final) this year after years of relative inaction.
9 Considerations Around Proposed Connected Vehicle Ban
The U.S. Department of Commerce's Bureau of Industry and Security, on Sept. 23, issued a notice of proposed rulemaking to curb national security and privacy risks associated with information and communication technologies and services with a nexus to China or Russia in vehicles on public roads that communicate with external sources.
