According to a report by The Nanyang Post on August 12, a latest business survey conducted by the U.S.-China Trade Council (USCBC) found that the export licensing system implemented by the Trump administration had little strategic benefit. Instead, it resulted in billions of dollars in losses for American exports and weakened the global market share of American companies. The survey indicated that these goods that were blocked from being approved could have been obtained by other suppliers in China.
Investigations indicate that “improper calibration of U.S. export controls has weakened U.S. companies in China, allowing them to lose market share to foreign competitors. At the same time, it reduces profits available for research and development, thereby weakening U.S. innovation capabilities and harming U.S. economic security.”
USCBC has more than 270 American member enterprises operating in China. This investigation covers 31 enterprises from the technology, industrial and manufacturing, energy, and healthcare sectors.
This rapid survey conducted in July found that the most common challenge mentioned by companies was “longer license approval processes.” 95% of companies mentioned this issue. 71% of the surveyed companies reported delays in obtaining export licenses to China. Two-thirds of the companies said their applications had been waiting for at least three months, exceeding the 90-day processing limit set by the U.S. Department of Commerce. Nearly one-third (31%) of the companies said their applications have been waiting for one to two years.
These delays stand in stark contrast to previous practices. 56% of companies stated that similar export license applications could be reviewed within one to three months before the current government took office.
More importantly, more than 80% of the surveyed companies stated that the products for which they are awaiting approval for licenses have similar alternatives available from Chinese and international suppliers. The report emphasizes that “regulatory authorities have failed to consider the existence of foreign supply channels, which is restricting America’s most innovative companies. They are giving up their positions to competitors without effectively promoting America’s national security.”
These delays have resulted in actual business losses. 73% of companies reported that delays caused them to lose orders to Chinese competitors. 55% of companies said their orders were taken by international competitors. Additionally, 64% of companies indicated that the delays led to a decline in their market share in China.
USCBC President Sean Stein expressed his concern in an interview with The South China Morning Post: 'Once you are excluded from the supply chain, those orders won’t come back, those exports won’t return, and those jobs won’t be recreated.'
He added, “Export controls are important, but without proper adjustments, they can have the opposite effect. They weaken America’s competitiveness and damage America’s technological leadership, while doing nothing to protect national security.”
