As global economic and geopolitical environments enter a new era, companies need to continuously develop and adjust their coherent global business strategies to secure and further expand business opportunities in all markets while minimizing political and legal risks by ensuring compliance. To assist you with that task, Mayer Brown’s US-China Trade Monthly provides news and insights related to the latest US developments impacting the US-China bilateral trade relationship.

In this last issue of 2023, we will discuss: (1) President Biden’s announcements following the inaugural meeting of the Council on Supply Chain Resilience; (2) the House Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party (CCP) sharing concerns with the USTR on the CCP’s potential plan to flood the US market with automobiles, particularly electric vehicles; (3) the Biden Administration providing more flexible options for meeting Foreign Entity of Concern (FEOC) criteria for clean vehicle tax credit; and (4) the same committee noted in #2 above proposing a reset to US-China economic relationship.

We look forward to continuing to provide key US-China trade news in 2024.

President Biden Convenes First Meeting of the Council on Supply Chain Resilience, Announces Actions to Further Strengthen Critical Supply Chains

On November 27, at the inaugural meeting of the Cabinet-level Council on Supply Chain Resilience (the “Council”), President Biden unveiled almost “30 new actions to strengthen supply chains critical to America’s economic and national security.” 

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House Select Committee on the Strategic Competition Between the US and the Chinese Communist Party Expresses Concern to US Trade Representative 

Earlier this year, China surpassed Japan to become the world’s biggest exporter of cars.  Reports show that China exported 1.07 million vehicles in the first three months of 2023, up 58% compared to the same period in 2022, whereas Japan’s vehicle exports stood at 954,185, having only increased 6% from first quarter 2022.  

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Biden Administration Provides More Flexible Options for Meeting Foreign Entity of Concern (FEOC) Criteria for Clean Vehicle Tax Credit

On December 1, 2023, the Department of Energy (“DoE”) issued a notice of proposed rulemaking (88 FR 84082),1 and the Department of Treasury (“Treasury”) and the Internal Revenue Service (“IRS”) issued a notice of proposed rulemaking (REG-118492-23) (the “Proposed Regulations”) and Revenue Procedure 2023-38. The DoE guidance provides the definition of a foreign entity of concern (“FEOC”) for purposes of complying with criteria for DoE’s grant program established under the Infrastructure Investment and Jobs Act (“IIJA”) found in 42 U.S.C. 18741. The IRS guidance adopts the FEOC definition contained in the DoE guidance and provides rules for the application of this definition to the excluded entity restriction of the clean vehicle credit under Section 30D of the Internal Revenue Code (the “Code”),2 as amended by the Inflation Reduction Act (“IRA”).

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US House Committee Proposes Reset to US - China Economic Relationship

On December 12, 2023, the US House Select Committee on the Chinese Communist Party (CCP) (“Select Committee”) released a report titled “Reset, Prevent, Build: A Strategy to Win America’s Economic Competition with the Chinese Communist Party” (“Report”), which contains nearly 150 policy recommendations as part of a strategy to fundamentally reset the United States' economic and technological competition with the People's Republic of China (PRC). The Report is noteworthy because it was issued on a bipartisan basis by the Select Committee and encapsulates the growing support in Congress across the political spectrum for a stronger US stance against what the committee views as unfair and adversarial Chinese economic competition.

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