The US government has decided to give its crackdown on companies linked to blacklisted Chinese technology firms another holiday, extending a suspension of controversial export restrictions until 10 January 2027.
The US Commerce Department’s Bureau of Industry and Security (BIS) confirmed that its so-called Affiliates Rule will remain suspended for another two months. The measure was supposed to return on 10 November, but Washington appears unwilling to upset its fragile trade truce with Beijing just yet.
The rule was designed to close a fairly obvious loophole in American export restrictions. Under the existing system, Washington can blacklist a Chinese company for activities considered threatening to US national security. However, subsidiaries and other businesses controlled by that company do not automatically inherit the same restrictions, creating an opportunity for some creative corporate paperwork.
BIS attempted to fix this in September 2025 by introducing its 50 per cent Affiliates Rule. Under the measure, companies owned at least 50 per cent by one or more blacklisted entities would automatically face corresponding export restrictions. Ownership could be direct, indirect or shared between several listed businesses, making it harder to escape the restrictions by rearranging the company letterhead.
The measure would extend controls involving the Entity List, Military End-User List and certain US Treasury sanctions. Companies supplying affected businesses could face additional licensing requirements for American technology, including semiconductor manufacturing equipment and controlled chips. The restrictions would apply to qualifying companies even if their names had never appeared on Washington’s blacklist.
Unfortunately for the people who wrote the rule, President Donald Trump’s administration later decided that improving relations with China was worth postponing it. The measure was suspended in November 2025 as part of a trade agreement between Washington and Beijing. The Americans had apparently discovered that keeping China talking sometimes involves leaving a few regulations gathering dust.
That suspension was supposed to expire on 9 November 2026, with the restrictions returning the following day. However, Washington and Beijing agreed in September to extend their trade truce until January, leaving BIS to ensure its regulations did not accidentally restart the argument.
The latest decision was filed on 5 November and published in the Federal Register on 9 November. It extends the suspension until 10 January 2027 without changing the underlying restrictions. The rule remains ready to return if Washington decides that the Chinese have exhausted their supply of diplomatic goodwill.
This is particularly important for semiconductor companies dealing with Chinese customers. US export restrictions already complicate sales of advanced chipmaking equipment and processors, while suppliers must check whether customers appear on various government blacklists. The Affiliates Rule would extend that headache to companies controlled by restricted businesses, even when the subsidiaries themselves have not been individually named.
For companies such as ASML, Applied Materials, Lam Research and KLA, the restrictions could complicate transactions involving equipment subject to American export controls. However, the suspension does not remove existing restrictions on listed companies or permit sales of technology already prohibited under other regulations. Anyone hoping Washington had suddenly thrown open the semiconductor gates will be disappointed.
The decision gives exporters additional time to investigate who owns their customers and whether those relationships could trigger restrictions in January. This can be harder than it sounds, particularly when corporate ownership passes through several subsidiaries and holding companies. In some cases, determining who controls a prospective customer may require more detective work than actually selling it the equipment.
The extension follows the wider US-China trade arrangement, although BIS did not provide a detailed explanation for its decision in the Federal Register notice. The department said it had not considered public comments submitted on the Affiliates Rule when making this latest change. Those submissions will be examined during future rulemaking, presumably once everyone has finished arguing about when the existing rules should apply.
The suspension now runs until 10 January 2027, giving exporters another two months to prepare for restrictions already postponed for more than a year. BIS has made no substantive changes to the rule, and unless Washington issues another extension, the ownership-based controls are due to return when the latest suspension expires.
