U.S. could raise penalties for Chinese companies on violating trade rules

The U.S. is planning to impose stricter penalties on Chinese companies for breaking trade rules. Eventually, the U.S. government is trying to have more control over Russia and China in accessing foreign products and major technologies.

Recently, the assistant secretary of the Commerce Department for export control – Matthew Axelrod attended corporate compliance in Manhattan. During the meeting, the executive said that the government is looking to raise charges on those who defy the trading regulations.

“There are going to have to be some penalties that get everyone’s attention. I think we’re on the cusp of that.”

It is not the first time that U.S. authorities are putting fines on firms for going against their export controls. In April 2023, the U.S. imposed a tax of $300 million on Seagate for reportedly selling around 7 million hard drives to Huawei.

But in the current scenario, the American government wants to introduce more ‘big-ticket’ corporate resolutions to stop the trade rules violations. These changes could create more problems for Chinese firms in solidifying their position on a global scale.

In addition, Matthew put forth new changes and a self-disclosure policy that can fix minor defying issues immediately and help authorities focus on major ones. It allows companies to accept and report their violations on the table.

Last year, the U.S. Deputy Attorney General – Lisa Monaco cited that the sanction is the new Foreign Corrupt Practices Act. Besides, she introduced tough applications of trading rules in the name of the country’s security.

Everything combined, Matthew said that the aim of raising penalties is to protect the U.S. trade rules from Chinese and Russian companies. It also shields the country from unauthorized access to security and misuse of advanced technologies.

Impact on Huawei?

It seems like the upcoming time in the foreign business market is going to be tougher and harsh for Chinese firms. However, Huawei began cutting ties with the U.S., knowing that the chances were quite low to set its legs in the respective market.

Moreover, the company is looking for better replacements and meeting new partners that can help it take its stand on the global surface without the support of U.S.-based components. It would be worth seeing what else comes amid U.S.-China disputes.

(Source)