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) the USTR’s 2023 Special 301 IP Property Protection Report; (2) India’s hope for a critical minerals deal with the US; (3) Secretary of the Treasury Janet Yellen’s remarks on the US-China Economic Relationship; and (4) CFIUS proposing to expand jurisdiction to include real estate transactions near additional US military installations.

USTR Releases 2023 Special 301 Intellectual Property Protection Report, Indicating Continued Concern Regarding China’s Intellectual Property Legal and Enforcement Framework

On April 26, the Office of the US Trade Representative (“USTR”) released its Special 301 Report on Intellectual Property Protection and Enforcement (“the Report”). The Report describes China as a “priority watch list” country, consistent with prior years. In a press release announcing the report, the USTR’s Office stated, “[t]here remain many serious concerns regarding IP protection and enforcement in China,” noting that while the country has continued implementing legal reforms, “the pace of reforms aimed at addressing IP issues slowed” and there are “concerns about the adequacy and effective implementation” of the newly introduced measures.

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Indonesia Hopes to Strike Critical Minerals Deal with US, Searches for Investment to Increase Electric Vehicle Battery Industry

Indonesia plans to propose a limited free trade agreement with the US that would allow Indonesian businesses to benefit from US electric vehicle tax credits, according to an April 10 article by Reuters. Under such an agreement, critical minerals from Indonesia shipped to the US would qualify for preferential duty treatment. These critical minerals are used to manufacture electric vehicle batteries, and include lithium, nickel, cobalt, graphite, and manganese. Indonesia’s nickel reserves are the largest in the world and have become increasingly important to electric vehicle battery manufacturing.

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Treasury Secretary Yellen Remarks on US-China Economic Relationship

On April 20, 2023, Secretary of the Treasury Janet L. Yellen gave remarks on the US-China economic relationship at John Hopkins School of Advanced International Studies. Secretary Yellen began by recounting the history of the US-China relationship, starting in the 1970s when Nixon became the first President to visit Mainland China while in office. She commended the economic developments in China that followed, but cautioned that China has since “pivot[ed] away from market reforms toward a more state-driven approach.” She remarked that the world is at a “critical time,” as it is “confronting the largest land war in Europe since World War II . . . debt challenges . . . for low- and middle-income countries . . . [and] pressures on economic and financial systems.” She also flagged a U.N. report released in March of this year that indicated “that the Earth is likely to cross a critical global warming threshold within the next decade” unless “drastic action is taken.” Confronting these issues, she argued, will require “constructive engagement” between the US and China, but she acknowledged that the relationship between the two countries is “at a tense moment.”

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CFIUS Proposes to Expand Jurisdiction to Include Real Estate Transactions Near Additional Military Installations 

The US Department of the Treasury, which chairs the interagency Committee on Foreign Investment in the United States (“CFIUS”), has proposed regulatory changes that would expand its jurisdiction to include certain transactions involving real estate located near eight additional military installations. CFIUS is accepting comments on the proposed rules through June 5, 2023.

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