Regulatory intelligence for US exporters

Lawmakers Urge Commerce to Tighten China Chip Controls

The top lawmakers on the House Select Committee on China urged the Commerce Department to strengthen its Oct. 7 China chip controls, saying Chinese firms have “identified workarounds.” In a letter last week to Commerce Secretary Gina Raimondo, Reps. Mike Gallagher, R-Wis., and Raja Krishnamoorthi, D-Ill., said the interim final rule’s threshold for the “bidirectional transfer rate of 600 Gbyte/s should be lowered sufficiently to prevent clever engineering that bypasses the regulations.” They also said the rule, which will be updated in the coming months when finalized by the Bureau of Industry and Security (see 2307260071), should address Chinese firms using cloud computing services to “outsource their advanced computing needs” and evade the export controls (see 2303210037 and 2305160092).

Start A Trial

Gallagher and Krishnamoorthi called these issues “complicated,” adding that Commerce should “further strengthen” the controls “so that advanced U.S. technology and expertise related to advanced computing and semiconductors are not used against the United States. Updating the October 7 rule and safeguarding U.S. leadership in the critical semiconductor sector would mark a critical and continued step to that end.”

In a separate statement, Gallagher said U.S. “export controls must keep pace with our rapid innovation.” The October rules “were a great first step but should now be strengthened to prevent clever [Peoples Republic of China] engineering, or creative K Street lawyering, from undermining the intended effects of these rules.” Krishnamoorthi made similar comments, saying “we need to make sure that any loopholes are closed so these common-sense, bipartisan actions can be successful.”