Waiting on Regulations
China to the left of me, Syria to the right, here I am, stuck in the middle with you. To put it plainly, industry is stuck waiting for concrete news on a variety of pressing matters. Let’s start with Syria. President Trump’s recent shocking announcement that sanctions would be lifted on Syria left me and many others reeling. What would this mean for international relations and trade? And most importantly for our business, what sanctions could expect relief? The answer so far has been Treasury sanctions, and that announcement came in the form of General License 25, which states “all transactions prohibited by the Syrian Sanctions Regulations, 31 CFR part 542 (SySR), other than transactions involving blocked persons, are authorized.”
What has not been addressed however are export controls. These are early days yet, but for the moment broad export controls remain in place against Syria. There has been no official EAR change as to the status of Syria. In effect they are still embargoed by the U.S. Syria remains under Part 746 of the EAR and is subject to a general policy of denial when it comes to export license applications. If the goal is to truly provide relief to Syria, are these the type of regulations that will be lifted as well? Hence my description of us holding a waiting pattern, for this is just one instance where we are eager for answers.
The other main player in this predicament is China. In the past few weeks, China and the U.S. engaged in trade talks held in London, and more recently the G7 summit was held, though it was cut short due to pressing international matters. With back-and-forth shots taken by both ourselves and China on tariffs and rare minerals, it’s no surprise that we would be engaged in talks on some level to try and reach a stable status quo. Recent language from the administration has showed that while we will continue to pressure and hold China accountable, President Trump is open to the idea of trade deals and normalized relations with China. Regardless of anyone’s opinion on such a strategy, I personally wonder at the wisdom of trusting China to keep its word. While trade seems to be taking a backseat in favor of focusing on the current situation in the Middle East, once things calm down again we will be back to the problem of trade relations between ourselves, our partners, and our adversaries. And this problem situation includes waiting for regulations, as I said earlier. We’re still waiting on AI regulations to replace the rescinded Biden AI Diffusion plan. We have the outline of a trade deal with the UK being revealed at the end of G7. And there’s also a current review of the AUKUS deal by the Pentagon, though I feel confident we will remain committed to both pillars of AUKUS. But all of this is to say, that at the moment it feels like we’re in the calm. When these big regulations and policy shifts drop, we’ll all be busy scrambling to take it in.
