Chinese Firms Blacklisted In US Rebrand Themselves As American To Avoid Sanctions Imposed By Biden Administration: Report

In an attempt to circumvent the Joe Biden-led administration’s intensified restrictions on Chinese companies operating in the U.S., Chinese corporations are rebranding and setting up U.S.-based businesses.

What Happened: Chinese firms are establishing U.S.-domiciled businesses in response to Washington’s anti-China policies, The Wall Street Journal reported on Wednesday. This development follows the Biden administration’s expansion of the government entity lists that restrict Chinese companies’ business dealings in the U.S.

China-based lidar manufacturer Hesai Group is one such firm, having registered a new company, American Lidar, in Michigan. Despite being labeled a security concern by the U.S., Hesai Group is not mentioned in American Lidar’s registration.

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Chinese-owned app TikTok, despite setting up a U.S. headquarters and exploring rebranding options in America, still faces a potential ban under a new U.S. law. TikTok has sued the U.S. government, alleging violation of First Amendment rights.

Why It Matters: According to legal experts, these efforts by Chinese companies to shift production, rebrand as American, or establish subsidiaries under new names are legal. However, such actions pose challenges to regulators who struggle to enforce laws when a company’s true ownership is unclear.

The Biden administration has been ramping up its restrictions on Chinese entities, blacklisting more Chinese entities than the previous administration.

The U.S. also increased tariffs on Chinese imports ahead of the election, which led to China retaliating with an investigation into plastic imports.

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Image via Shutterstock

This story was generated using Benzinga Neuro and edited by Pooja Rajkumari