A powerful coalition of American businesses, including tech giants like Oracle and Amazon.com, alongside energy leader Exxon Mobil, is vehemently urging the Trump administration to immediately suspend a restrictive trade rule. They contend this regulation has already stalled billions of dollars in U.S. exports and threatens to prompt China and other nations to sever American firms from their crucial supply chains.
In a strongly worded letter addressed to President Donald Trump, reviewed by Reuters, the National Foreign Trade Council (NFTC) directly criticizes the “Affiliates Rule.” This rule specifically prohibits American companies from shipping goods and advanced technology to any foreign entities that are even partially owned by firms already subjected to U.S. sanctions.
NFTC President Jake Colvin articulated in the October 3 letter that the rule “has resulted in an immediate pause of billions in U.S. exports, which is contrary to your desire to reduce the trade deficit and increase U.S. exports globally.” He further warned that if the rule remains in effect, it would motivate other countries to favor non-U.S. made products, ultimately “weakening U.S. national security as the rest of the world, led by China, removes American nodes from its supply chains.”
Neither the White House nor the Commerce Department, the agency responsible for overseeing export controls, responded to requests for comment on the matter. The NFTC also declined to provide further statements.
This previously unreported letter highlights the widespread private sector opposition to this contentious rule. The “Affiliates Rule” was initially championed by hawkish voices in Washington, aiming to prevent sanctioned Chinese companies from circumventing export restrictions and accessing sensitive American technology through their unsanctioned subsidiaries.
China’s Strong Opposition
Introduced on September 29, the rule expands the existing Entity List to include firms that are at least 50% owned by a parent company already on the list. Companies are placed on the Entity List if their actions are deemed detrimental to U.S. foreign policy or national security, effectively banning them from receiving U.S. technology.
Beyond the “Affiliates Rule,” the NFTC also criticized the Commerce Department for “significantly” slowing, and in some cases “temporarily halting,” the processing of export license applications. They noted that “thousands of licenses worth billions of dollars” destined for Chinese customers are currently backlogged at the department.
This aligns with an August Reuters report, which revealed that numerous license applications from U.S. companies for exporting goods and technology worldwide, particularly to China, were stuck in administrative limbo due to internal disruptions and a near-paralysis within the agency.