Global Trade & Foreign Policy Insights

On May 20, 2024, the PRC Ministry of Commerce (MOFCOM) announced the inclusion of three U.S. companies on its unreliable entities list over sales of arms to Taiwan. We discussed the implementation of the Unreliable Entity List here. The move mimics similar designations in February 2023, which we wrote about here, and follows recent actions by the BIS and Treasury to apply new export controls and sanctions on Chinese entities for allegedly doing business with Russia.

China has come out of its zero-Covid slumber with a bang, utilizing its Unreliable Entity List to reiterate its ultimatum to companies regarding Taiwan. Companies doing business with Taiwan and mainland China in critical industries should take note.

On August 17, 2022, the U.S. Trade Representative (“USTR”) released an 11-point negotiation mandate to facilitate formalized trade negotiations between the U.S. and Taiwan (the “Mandate”). In time, the PRC will respond to the increased cooperation between the U.S. and Taiwan with more than mere rhetoric, flyovers, and a weeklong naval blockade.