Rep. Moolenaar: Loopholes in US Export Controls; Appeals Court Upholds Law Forcing TikTok's Sale

Welcome to China In Focus. I'm Tiffany Meyer. Our top story. A congressman is pointing to loopholes in Washington's new chip export controls to China. A closer look at the gaps. A federal appeals court upholds a law that could ban TikTok in the U.S. Its Chinese parent company has argued Beijing will not allow its sale to a foreign company. President-elect Trump signals his future agenda, unveiling key nominations. More on David Perdue for the next U.S. ambassador to China. And Paraguay expels a Chinese diplomat. He has 24 hours to leave the country. Find out why. A game of whack-a-mole between the U.S. and China. Congressman John Lennar said he's found loopholes in Washington's new microchip export controls to China, and he's asking the Commerce Secretary to close them. The Biden administration announced the new rules on Monday. The goal is to stem the flow of U.S. semiconductor technology to China so that Beijing is unable to use it to advance its own military. Though there are some loopholes. In a letter to Commerce Secretary Gina Raimondo, Lennar wrote that even though one Chinese company supplying microchips to tech giant Huawei has been blacklisted, others were granted exceptions, allowing them to continue to get certain types of U.S. technology. Meaning Huawei could still get its hands on chips made with certain U.S. technology. Huawei is Beijing's national champion in the semiconductor race. It's been blacklisted by Washington. Lennar also added that no action was taken against Tenxing Memory Technologies, a firm poised to become a leader in developing a key semiconductor technology. Semiconductors are at the heart of U.S.-China competition. The tiny devices make up the foundation for all other technology, including advanced know-how like A.I. and quantum computing. Microchips also power our modern life, from iPhones to cars to home appliances, plus military gear and even missiles. Lennar has asked Raimondo to close these gaps as quickly as possible. NTD reached out to the Commerce Department for comment, but did not hear back before airtime. A federal appeals court panel is upholding a law requiring the sale or ban of TikTok in the U.S. The law requires China-based ByteDance to divest TikTok's U.S. assets by January 19th or face removal from U.S. app stores. TikTok and ByteDance argue the law is unconstitutional and violates free speech rights. The Department of Justice said the social media app poses a serious threat to national security as it has access to personal data on a large number of Americans. The DOJ also says Beijing can covertly manipulate the information Americans consume through TikTok. The Friday ruling came after the appeals court panel heard oral arguments in September. The decision could be appealed to the Supreme Court or a full appeals court panel. And in another Friday decision, the House has voted to pass the crucial Communism Teaching Act. The bill would allow a federal civic high school curriculum designed to have students learn about the horrors of communism. The teaching guidelines would include details on how communism has led to the deaths of over 100 million people worldwide. It would also educate students on the dangers of communism and similar political ideologies and how 1.5 billion people still suffer under communism today. Supporters of the bill also want to include a, quote, comparative discussion of certain political ideologies including communism and totalitarianism that conflict with the principles of freedom and democracy that are essential to the founding of the United States. The curriculum would also feature interviews, recordings and writings from people talking about their personal experiences living under the covered political systems or ideas. President-elect Donald Trump has named his pick for the next U.S. ambassador to China. His choice for the key role is former Georgia Senator David Perdue. Perdue has historically been critical of the Chinese Communist Party. He's called out the describing Beijing's international infrastructure project as the creation of a China-dominated economic world order. Trump posted the announcement on social media Thursday. He said Perdue will be key to overseeing a strategy for peace in the region and helping to reform the U.S. trade relationship with China. Trump also made other noteworthy nominations this week. Among them, Peter Navarro is now slated to serve as the top U.S. trade advisor. Navarro served as trade advisor during Trump's first term. He's a staunch advocate of tariffs, especially on China. Taiwanese President Lai Ching-de urged the Chinese regime Friday to unclench its fists and not take any unilateral action. The message comes ahead of expected Chinese war games around the island. Take a listen. It is better to open your arms than to raise your fists. No matter how many military exercises China launches, dispatches of military planes, warships or threats to surrounding countries, it cannot win the respect of any country. The president said he hopes China will return to international norms and stop any actions that cause uneasiness and regret. He made the comments during a news conference in Palau today. Lai also commented on Paraguay's recent expulsion of a Chinese envoy. He said people share the same attitude of supporting Taiwan. Once home, Lai told reporters he will continue to uphold democracy and drum up support for the island nation. Paraguay said it canceled a low-level Chinese diplomat's visa and ordered him to leave after the envoy tried to push local lawmakers away from Taiwan. The Paraguayan foreign ministry accused the diplomat of interference in domestic affairs and said he violated the terms of his visa. He was given 24 hours to leave. Taiwan's embassy said he infiltrated Paraguay to undermine its relationship with Taiwan. In comments recorded in Paraguay's parliament and shared with Reuters, the Chinese diplomat urged Paraguay to recognize communist China over Taiwan. He also used talk of financial incentives to try to sway lawmakers. Paraguay holds long-standing diplomatic support for Taiwan. It is the only remaining South American country with formal relations with Taipei. An official with Paraguay's foreign ministry said the Chinese diplomat came to engage in internal politics that were not appropriate. Besides the diplomatic expulsion, the U.S. recently helped Paraguay identify a Chinese cyber breach into its government systems. A group of state-backed Chinese hackers called Flax Typhoon launched the attack. The discovery came after the U.S. Southern Command performed a joint cybersecurity review with Paraguay. The U.S. said both countries would continue strengthening cybersecurity systems. As tensions rise in the Indo-Pacific, the Russia-Ukraine war continues to rage on. But in the U.S., support seems to be waning, especially with Washington having sent billions in aid. Is the Ukraine conflict becoming the current version of the Vietnam War? And why is it so important for Ukraine to win? To break it all down, we spoke with retired Colonel Grant Newsham, Senior Fellow at the Center for Security Policy and Research Fellow at the Japan Forum for Strategic Studies. Grant Newsham, thank you so much for joining us. Great to have you back on the show. I'm glad to be here. And as tensions continue to bubble in Asia, with say North Korea and communist China, the Russia-Ukraine war is still ongoing. There is enthusiasm waning, especially in America, given the billions of dollars we've sent over there. Now, you actually just had a piece out on how Ukraine's fight today. It brings to mind the latter phase of the Vietnam War. Speak to us about that and why it's so crucial that Ukraine does win here. What I wrote, and few people remember the Vietnam War. Now, I do, but it was 50 years ago. But what you have is a similar situation in the sense that in the case of Vietnam, that America was tired of fighting this war, of supporting a regime that seemed corrupt. It didn't seem like it was going to win. Let's just reach a peace deal and get out of there. Just get it over with. And that's what we did. And in short order, the communists took over South Vietnam, and then they took over Cambodia and Laos, and they made moves in Africa, Latin America, Europe, etc. And it looked like we just might lose. So what you have here today with Ukraine is, look, we're just tired of this involvement. It looks like World War III might be coming. Putin's threatening to use nuclear weapons. We've got problems in Gaza, the Middle East. The Chinese are throwing their weight around. Let's just get out of Ukraine. It's not worth it. And that's the thinking. Or cut a deal that leaves Ukraine in a pretty bad position and leaves the Russians in a better one. So what I would suggest is we should remember the Vietnam experience and make sure that we continue our efforts to support Ukraine, but also to weaken our opponents. We've really got to play rough with the Russians in terms of sanctions, with the Chinese, with the Iranians, North Koreans as well. Just enforce sanctions that exist. So if you do these things, then you will put Ukraine in a better position. You'll put us in a better position. But if we were to just get out of Ukraine and say it's someone else's problem, Europeans, you take care of it. If we do that, we will pay for it elsewhere. China will see that, well, you do get stuff from aggression. Russia will as well. They're not done with Europe if they can get away with it. And even the North Koreans, of all people, are feeling pretty good about themselves. Venezuela as well. They're just looking to see if the time is right to seize the left part of Guyana, where there's a lot of oil. So that's what I'm getting at. Grant Newsham, as always, thank you so much for joining us. I'm glad to be here. Thanks for having me. Coming up, the NBA is returning to China next season after a years-long ban. The league had been ousted from the country following the 2019 pro-democracy protests in Hong Kong. They need the Chinese market and Chinese fans, so they've come back. It's just natural. A shift in global supply chains is underway, and Western companies are scrambling at stake critical rare earth metals. We're on how China's export bans are benefiting some American firms and hurting others. And South Korea's president is facing even more pressure to step down after some members of his own party called for his removal. We're on the fallout of a failed martial law declaration after the break, here on China In Focus. Welcome back to China In Focus. I'm Tiffany Meyer. The NBA is making its way back to China next season after years of absence. The league had been banned in the country since 2019, when Commissioner Adam Silver stood by a tweet from Daryl Moring supporting Hong Kong's pro-democracy protests. The league has struck a multi-year deal to host pre-season games in Macau starting next year. Here's how some Chinese basketball fans are reacting to the news. I feel really good about it. It's great that the NBA is finally returning to China. They need the Chinese market and Chinese fans, so they've come back. It's just natural. The NBA's absence followed a firestorm of controversy in China five years ago. Back then, Daryl Moring, the Houston Rockets' then-general manager, posted a message on social media in support of the 2019 pro-democracy protests in Hong Kong. This led to Beijing suspending NBA games off the air and sponsors backing out, which hurt the league financially. Pre-season games in China were also canceled. After that incident, Beijing suspended the broadcast of NBA games, which caused sponsors to pull out and led to major financial losses for the league. Pre-season NBA games in China were also scrapped. But in February, Joe Tsai, the owner of the Brooklyn Nets and Alibaba chairman, said the issue was in the past and that the NBA was eager to bring games back to China and Macau. The NBA did not immediately respond to requests for comment. The 2019 Hong Kong protests started after local authorities rolled out plans to allow extradition to mainland China. Critics feared this could undermine judicial independence and endanger dissidents. Calls are growing in Washington to revoke China's most favored nation trade status. President-elect Trump said he would do it while on the campaign trail. Now it's up to Congress to make the change. What does this trade status do and how will it affect the U.S.? Here's a breakdown. The Senate approved the status for China in the year 2000. The decision led to a surge of U.S. investment in the communist country. It also paved the way for the regime's accession to the World Trade Organization. But experts have said China's trade rise came at the expense of the U.S. economy. China's share of global manufacturing GDP increased from approximately 6 percent in 2000 to about 24 percent in 2016. During that same period, the U.S. share of global manufacturing GDP dropped from 26 percent to 17 percent. During that time, U.S. manufacturing shed five million jobs. About 54,000 factories closed. And between 2000 and 2016, U.S. real median household income remained relatively flat. On the other hand, some economists are against rescinding the status. A think tank model estimated the move would cut China's GDP by 0.6 percent, adding U.S. GDP could fall by 0.1 percent. Right now, bills pushing to strip China of the status are sitting in both chambers. A key bipartisan commission that advises Congress on China, called CECC, has also recommended stripping China of the status. Moving on, China says it's banning exports of certain critical materials to the U.S. These key strategic minerals include gallium, germanium and antimony, used to make military gear. China is a key producer of the metals. Last year, it accounted for 48 percent of global mined output of antimony. The move is part of China's response to U.S. chip export restrictions. NTD's Evelyn Lee sat down with Rebecca Grant, national security analyst and vice president at Lexington Institute, for more. We're talking about silicon chips. You know, the good news here in a way is that we've been wary for a while about China's stance on rare earths. But this is a pretty big shock. China has placed some export controls on these minerals previously. But to outright ban the export to the U.S., that's a really big geopolitical statement coming out of China. Where do you see the U.S. positioned when it comes to this trade war? Can the U.S. get an upper hand? Well, I think so. And with the minerals, you know, this is something that we've been thinking about. For example, it's a different set, but Ukraine is a source of some strategic rare earth minerals. There are many, many other sources, you know, antimony. And the other big producer is Tajikistan, which does some of that in conjunction with China. So the U.S. now has to be very nimble and agile and make sure that it's working deals and good relationships with the countries that quickly produce and process these strategic rare earths. Thank you so much, Rebecca Grant, for your time this morning. I appreciate your insights. Thank you. Western companies are looking for alternatives to China to source rare earth metals, and a few American firms stand to benefit. United States antimony is the only antimony processor in North America. This metal is critical for making nuclear weapons. The U.S. company is ramping up its production in Montana. That says China's export ban triggers higher demand. Meanwhile, a mining company called Perpetua Resources is developing an antimony mine in Idaho, backed by U.S. government funding. China is the world's largest antimony producer. This week, Beijing banned exports of antimony, gallium and germanium to the U.S. The move is largely seen as retaliation, following new restrictions from Washington on microchip technology exports to China. Gallium and germanium are used for semiconductors, solar panels and weapons. Beijing also limited exports of these metals last year. Following China's export ban, an American company that refines rare earth metals received at least 10 calls from U.S. miners. They offered to send their ore to the company for processing instead of China, where they used to enjoy cheap refining costs. Though developing a new industry takes time. And for companies that rely on rare earth metals, China's restrictions are hitting where it hurts. German chemicals giant Henkel told customers last month that it had to suspend deliveries of four types of adhesives and lubricants used by automakers, citing China's ban on antimony. These products, made from Chinese-sourced antimony, brought Henkel over $11 billion in revenue last year. Now, the company is scrambling to find alternatives. The U.S. Embassy in Vietnam pledged on Thursday to donate small boats and training facilities to the country's maritime law enforcement. The U.S. package worth over $12 million. And it's meant to help the Vietnamese Coast Guard clamp down on illegal fishing. Vietnam's neighbors and trade partners have, for years, urged it to take greater action against illegal fishing practices. But there's a tricky factor in the mix. China. Two months ago, Vietnam's government condemned Chinese Coast Guard troops for beating 10 Vietnamese fishermen, seizing about four tons of their fish catch and damaging their fishing gear. China responded by accusing the Vietnamese side of illegal fishing activity. The incident occurred near the disputed Paracel Islands. Taiwan, Vietnam and China all lay claim to them. Worth noting, Beijing claims nearly the entire South China Sea and often clashes with other countries over disputed territories. A 2016 international arbitration ruling declared the regime's claim invalid. South Korean President Yun Suk-yol's own party members are calling for his removal. In a press briefing, leader of the People Power Party said Yun must be removed in the best interest of the country. But he stopped short of calling for impeachment. I said yesterday that I would try not to pass this impeachment in order to prevent damage to the people and supporters caused by the unprepared chaos. But I believe that President Yun Suk-yol's immediate suspension of office is necessary to protect the Republic of Korea and its people in the light of the newly revealed facts. Han also said Yun had ordered the arrest of prominent politicians on claims they were among, quote, anti-state forces. However, South Korea's Yonhap News Agency later reported the presidential office denying it had given such an order. Meanwhile, more details are emerging about the chaos that engulfed Seoul on Tuesday night. Yun's declaration shocked the nation and parliament, including some in Yun's own party, voted to oppose it. It was the country's first martial law enactment since 1980 and revived painful memories of its Cold War-era military rule. The main opposition Democratic Party has scheduled a vote on Yun's impeachment for Saturday. On Friday, its leader, Lee Jae-myung, again called for Yun to step aside. The national police have launched investigations into Yun and Kim Jong-un, the defense minister who allegedly encouraged him to declare martial law and who has since resigned. Meanwhile, Acting Defense Chief Kim Son-ho said Friday rumors of a second martial law declaration being planned were untrue. And if such an order were given, he said the Ministry of National Defense and Joint Chiefs of Staff would not obey it. That's all for today's China In Focus. I'm Tiffany Meyer. If you have any feedback on the show or have something you'd like to see us cover, send us an email at chinainfocusandtd.com. We'd love to hear from you. For around-the-clock original news coverage, visit us at ntd.com or download our NTD app. Thanks for watching. See you soon.