US elections: A Republican majority will mean tougher curbs on trade with China

ON NOVEMBER 8, the US midterm elections will determine which party – Republican or Democrat – controls the Senate and the House of Representatives. Republicans are poised to take the House. The Senate is neck and neck. For businesses in Asia, this matters. 

Last month, on October 7, President Joe Biden announced restrictions on technology exports to China. These export restrictions, issued by the Bureau of Industry and Security (BIS) within the Department of Commerce, include a prohibition on exports to Chinese companies of integrated circuits, semiconductors, and items for supercomputer manufacturing. Added to this is a licensing provision that basically bans “US persons” – meaning American citizens and green card holders – from working on any of these technologies inside China.

For businesses with a presence in Asia, complying with these restrictions already creates an unprecedented difficulty. With an incoming Republican majority, expect even more scrutiny from US lawmakers to ensure these provisions are being enforced. California Republican Kevin McCarthy is poised to take over from Nancy Pelosi as Speaker of the House. His leadership will guide priorities. A Republican majority also means a new chairman for every House committee. Expect oversight hearings as soon as McCarthy picks up the gavel.