| | | | |  | | By Ari Hawkins | | Presented by |  | | | With help from Doug Palmer
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The Commerce Department is escalating a crackdown on Beijing’s tech aimed at limiting its ability to build up infrastructure that could be diverted to the country’s military. | Alex Wong/Getty Images | | | | | — The Biden administration announced new chip curbs aimed at China this morning that reflect a trimmed down list of restrictions following discussions with allies and heavy lobbying from multinational companies. — Donald Trump threatened the BRICS group of nations with 100 percent tariffs if they try to undermine or replace the American dollar, which economists note is unlikely. — WTO Director-General Ngozi Okonjo-Iweala won a second term, positioning her at the forefront of the institution ahead of four years of likely turbulence. It’s Monday, Dec. 2. Welcome back to Morning Trade. Got tips? Suggestions? Want to grab a coffee? Hit us up at: ahawkins@politico.com, gbade@politico.com and dpalmer@politico.com. You can follow us on X: @_AriHawkins, @GavinBade and @tradereporter.
| | | | A message from eBay: Why do people trust eBay? It’s because we’ve invested billions into creating a seamless buying experience, backed by dozens of guarantees and programs that boost consumer confidence. By increasing trust in the small businesses that rely on us, we’ve transformed the original find-anything site into America’s go-to small business platform. Learn more about our innovations at eBaysmallbiz.com. | | | | | CHIPS WARS TRUNCATED: The Commerce Department’s Bureau of Industry and Security on Monday unveiled new curbs on the sale of semiconductor manufacturing equipment and chips used in AI and advanced computing to China. The move comes as the U.S. escalates a crackdown on Beijing’s tech aimed at limiting its ability to build up infrastructure that could be diverted to the country’s military, even as the Commerce Department prepares to hand off leadership to Donald Trump’s team next year. Curb count: The measures include 140 new additions to Commerce’s entity list, which would mean U.S. firms will be barred from doing business with them unless they obtain special permission. “This action is the culmination of the Biden-Harris Administration’s targeted approach, in concert with our allies and partners, to impair the PRC’s ability to indigenize the production of advanced technologies that pose a risk to our national security,” said Commerce Secretary Gina Raimondo in a press release on Monday. “No Administration has been tougher in strategically addressing China’s military modernization through export controls,” she said. Breakdown: The curbs also apply new restrictions to certain software tools used to develop and produce semiconductors, and include controls on U.S. and foreign-produced high-bandwidth memory chips commonly used in AI and investment companies allegedly linked to China’s military. Keep in mind: The move is a scaled down version of prior proposals, which initially targeted a higher number of entities and more suppliers to Chinese telecom giant Huawei Technologies. The update comes after heavy lobbying from chip companies and negotiations with Japan and the Netherlands, two industry officials close to the process told Morning Trade. Retaliation on tap: “China is firmly opposed to the U.S. overstretching the concept of national security,” said Mao Ning, China's foreign ministry spokesperson when asked last week about the plans. “China will take resolute measures to firmly defend the legitimate and lawful rights and interests of Chinese companies.”
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| | BRICS BRACES: President-elect Donald Trump on Saturday pressured developing countries to commit to the use of the U.S. dollar as their reserve currency and threatened to impose a 100 percent tariff if they attempt to abandon it, your host reports. “The idea that the BRICS Countries are trying to move away from the Dollar while we stand by and watch is OVER,” Trump wrote on his social media platform Truth Social, referring to the acronym for — Brazil, Russia, India, China and South Africa. The geopolitical alliance has since expanded to include Iran, Egypt, Ethiopia and the United Arab Emirates. China's rebuke: Liu Pengyu, a spokesperson for the Chinese embassy in Washington condemned the threat on X. "The [U.S.] has long used its dollar hegemony to shift crises, spread U.S. inflation to other parts of the world and made it become a geopolitical tool, which damages international economic and financial stability, and disrupts international order. We firmly oppose it." Reminder: The concept of moving away from the U.S. dollar gained steam in 2022 when the U.S. imposed massive economic sanctions on Russia over its war in Ukraine, though analysts and researchers say that the world’s dominant currency is not under threat in the near future. “Curious how [Trump] ever became convinced that the nowhere close to happening BRICs currency was a threat to the dollar,” said Brad Setser, former staff economist at the U.S. Treasury Department on X. “It isn't a good look, as it indirectly elevates the stature of a non-threat and suggests a lack of confidence in the dollar.” HAWKS CHEER: Protectionist forces in Washington are hailing Trump’s choice of former USTR chief of staff Jamieson Greer to lead the trade office, after Robert Lighthizer was passed over for senior economic roles. Reminder: Greer is expected to broadly champion the policies his former boss embraced during Trump’s first administration, and protectionists say the announcement is a sign of Lighthizer's lingering influence over Trump’s agenda. Aaron Cummings, who attended law school with Greer at the University of Virginia and is now at the Crowell & Moring law firm in D.C., told Morning Trade: “Some people have sort of hoped that President Trump might be convinced to moderate his views. But I think the appointment of Jamieson is a sign that, no, the campaign rhetoric that Trump used on the [trail] is serious and needs to be taken seriously." Doug and your host have more here.
| | | | A message from eBay:   | | | | | SECOND TERM SECURED: WTO Director-General Ngozi Okonjo-Iweala won a second term on Friday with the help of the Biden administration. The move clears the way for the 70-year-old Nigerian economist and former senior World Bank official to lead the WTO for another four years that could test the durability of the rules-based world trading system because of Trump’s tariff plans. USTR Katherine Tai declined to say ahead of last week’s General Council meeting whether they supported a second term for Okonjo-Iweala, possibly concerned that would prompt Trump to come out against her. Four years ago, the Trump administration opposed her initial selection, but was unable to block her from getting the job after losing the 2020 election. This time, Trump remained silent on her reappointment. “We support strong and continued collaboration with the Director-General to find necessary paths forward to achieve substantive and procedural reform of the WTO,” Tai said in a statement after Okonjo-Iweala was approved for a second term. Doug and Douglas Busvine have more here. COSTA RICA AND TRADE PACTS: Economic partners in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership trade arrangement extended an invitation on Thursday for Costa Rica to begin the accession process to join the bloc. The move could open up Costa Rica to several economies in the Indo-Pacific. It could also put pressure on Washington to pull the country closer into its economic orbit, as Costa Rica eyes the 2026 review of the USMCA for potential accession. What’s next?: Costa Rican foreign trade minister Manuel Tovar Rivera told Morning Trade that they are gearing up to work with the Trump administration ahead of the review. “We will be coming to Washington early on [next] year to engage with the new authorities within USTR and the Department of Commerce to learn about their views.”
| | | | Don't just read headlines—guide your organization's next move. POLITICO Pro's comprehensive Data Analysis tracks power shifts in Congress, ballot measures, and committee turnovers, giving you the deep context behind every policy decision. Learn more about what POLITICO Pro can do for you. | | | | | | | | | — What Justin Trudeau told Donald Trump at Mar-a-Lago, per POLITICO Pro. — Commerce sets new duties on solar imports from Southeast Asia, per POLITICO Pro. — Mexico's president and Trump had an upbeat call despite dust-up over tariffs, POLITICO reports. — Patrick McHenry takes on Mike Johnson, Andy Barr in opposing compromise on US-China investment, POLITICO Pro reports. THAT’S ALL FOR MORNING TRADE! See you again soon! In the meantime, drop the team a line: ahawkins@politico.com, gbade@politico.com and dpalmer@politico.com. Follow us @POLITICOPro and @Morning_Trade.
| | | | A message from eBay: When it comes to online shopping, trust is the most important currency. That’s why eBay has invested billions into innovations that boost confidence, including:
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