World

Trump’s Export Rule Faces Backlash: How New Policy Threatens US Companies and Global Supply Chains

Lobby group urges Trump to suspend export rule, claiming it halts billions in exports and risks U.S. supply chains.

byAndres Castro

October 21, 2025, 10:34 AM

President Donald Trump, in a dark suit and red tie, walks outdoors at the White House while addressing the media.

President Trump answers media questions at the White House on August 1, 2025. By Brian Jason / Shutterstock.com.

Executive Summary

A prominent lobbying group, the National Foreign Trade Council (NFTC), is urging President Trump’s administration to immediately suspend a new “Affiliates Rule” that has halted billions in U.S. exports.

The “Affiliates Rule,” implemented September 29, bars U.S. companies from shipping goods and technology to firms at least 50% owned by sanctioned entities.

The NFTC warns that the rule could prompt China and other nations to exclude American companies from their supply chains, contradicting President Trump’s trade goals and potentially weakening U.S. national security.

The Story So Far

The “Affiliates Rule,” implemented by the Trump administration on September 29, was advocated by “China hawks” in Washington as a measure to prevent sanctioned Chinese firms from circumventing U.S. export restrictions on critical technology through unsanctioned subsidiaries. This rule, which bars U.S. companies from shipping goods and technology to firms at least 50% owned by sanctioned entities, reflects broader U.S. national security and foreign policy concerns regarding China, creating tension with President Trump’s stated goal of increasing U.S. exports.

Why This Matters

The Trump administration’s “Affiliates Rule” is severely impacting U.S. exports, with a prominent lobbying group asserting it has halted billions in trade and directly contradicts the goal of reducing the trade deficit. This measure also risks prompting nations, particularly China, to exclude American companies from their supply chains, potentially weakening U.S. national security by diminishing the U.S. presence in global commerce and highlighting a growing tension between national security objectives and economic trade interests.

Who Thinks What?

The National Foreign Trade Council (NFTC), representing major U.S. firms, believes the “Affiliates Rule” has halted billions in U.S. exports, contradicts President Trump’s goal of reducing the trade deficit, and risks prompting China and other nations to exclude American companies from global supply chains, weakening U.S. national security.

China hawks in Washington advocated for the “Affiliates Rule” to prevent sanctioned Chinese firms from circumventing export restrictions on critical technology through unsanctioned subsidiaries, aiming to tighten controls for national security.

A prominent lobbying group representing major U.S. firms, including Oracle, Amazon.com, and Exxon Mobil, is urging President Donald Trump’s administration to immediately suspend a new export rule. The National Foreign Trade Council (NFTC) claims the rule has halted billions of dollars in U.S. exports and could prompt China and other nations to exclude American companies from their supply chains, according to a letter seen by Reuters.

Impact of the Affiliates Rule

The “Affiliates Rule,” implemented on September 29, bars U.S. companies from shipping goods and technology to firms that are at least 50% owned by sanctioned entities. NFTC President Jake Colvin stated in the October 3 letter that this rule directly contradicts President Trump’s goal of reducing the trade deficit and increasing U.S. exports globally.

Colvin further warned that the rule, if maintained, would encourage countries, particularly China, to seek non-U.S. suppliers, thereby weakening U.S. national security by removing American nodes from global supply chains. The White House and the Commerce Department have not responded to requests for comment regarding the letter, and NFTC declined to comment.

Private Sector Opposition and Background

The letter highlights significant private sector opposition to the controversial measure. The rule was advocated by China hawks in Washington who sought to prevent sanctioned Chinese firms from circumventing export restrictions on critical technology through unsanctioned subsidiaries. Companies are added to the Entity List for actions deemed harmful to U.S. foreign policy or national security, making them ineligible to receive U.S. technology. China has strongly objected to the rule.

In addition to the Affiliates Rule, the NFTC also accused the Commerce Department of substantially slowing and even temporarily halting the processing of export license applications, particularly for Chinese customers. Thousands of licenses, collectively worth billions of dollars, are reportedly accumulating at the department. This aligns with an August Reuters report that detailed a backlog of license applications due to operational issues within the agency.

Key Takeaways

The NFTC’s appeal underscores growing private sector concern over the Trump administration’s “Affiliates Rule,” which is intended to tighten export controls on sanctioned entities but is perceived by industry as a significant impediment to U.S. exports and a risk to America’s position in global supply chains. The situation highlights the tension between national security objectives and economic trade interests.