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 the current issue, we will discuss: (1) USTR’s annual report on China’s WTO compliance, which hints at potential new unilateral actions by the US, (2) emerging details on the US Indo-Pacific Strategy, which is widely believed to be aimed at countering China’s growing economic influence in the region, (3) USTR listing AliExpress, WeChat on the Notorious Markets List, (4) new US supply chain reports suggesting potential “decoupling” in certain “critical” sectors; and (5) the first major antidumping and countervailing anti-circumvention inquiry involving China after last year’s significant overhaul of related regulations, which provided additional authority for retroaction application of trade remedy.

USTR Releases Annual Report to Congress on China’s WTO Compliance

On February 16, 2022, the Office of the United States Trade Representative (USTR) released its 2021 Report to Congress on China’s WTO Compliance. This is the 20th report prepared pursuant to section 421 of the US-China Relations Act of 2000, which requires the USTR to submit an annual report to Congress on China’s compliance with commitments made in connection with its accession to the World Trade Organization (WTO). It is also the first report issued under U.S. Trade Representative Katherine Tai.

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Details Emerge on the US Indo-Pacific Strategy

On February 11, 2022, the Biden administration (the “Administration”) released a statement providing further detail on the Administration’s Indo-Pacific Framework (the “Framework”). The Administration’s strategy is to “more firmly anchor the United States in the Indo-Pacific and strengthen the region in the process.” To do so, the U.S. will pursue an Indo-Pacific region that is “free and open,” “connected,” “prosperous,” “secure,” and “resilient.” A month later, on March 11, the U.S. Department of Commerce (Commerce) requested public comment on “key areas of interest” related to the Framework.

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USTR Lists AliExpress, WeChat on Notorious Markets List

On February 17, 2022, the Office of the U.S. Trade Representative (USTR) released its 2021 Review of Notorious Markets for Counterfeiting and Piracy, also known as the Notorious Markets List (NML). For the first time, AliExpress and the WeChat e-commerce ecosystem were included on the list, along with four other Chinese online marketplaces and nine physical marketplaces. Although inclusion on the list does not result in enforcement actions or penalties, the list provides insight into the USTR’s policies and priorities and is intended to encourage governments and private sector actors to combat intellectual property piracy.

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Administration Releases Supply Chain Reports, Expresses Intent to Reduce Dependence on China 

On February 24, 2022, the White House released its annual summary report on domestic supply chains. The report outlines progress toward supply chain goals made during the first year of the Biden administration, and discusses what it hopes to achieve on supply chains going forward. On the same day, the U.S. Departments of Defense, Homeland Security, Commerce, Energy, Agriculture, Transportation, and Health and Human Services (collectively, the “Departments”) released reports focused on supply chain issues at their specific agencies and in industries they monitor. These reports provide clues on where the administration will focus its supply chain policy in the future.

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Commerce Self-Initiates Scope and Circumvention Inquiry into Quartz-Surface Products from China 

On February 7, 2022, the U.S. Department of Commerce (Commerce) published a notice in the Federal Register that it was self-initiating a scope inquiry and a circumvention inquiry into the importation of quartz surface products from Malaysia. Quartz surface products from China are subject to U.S. antidumping (“AD”) and countervailing duty (“CVD”) orders; this investigation will determine if quartz surface products finished in Malaysia are within the scope of the AD and CVD orders and, if not, whether they are circumventing the orders.

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