US Approvals of H20 Chips Seen as Hurting Export Control Talks With Allies
The Trump administration’s decision to approve exports of advanced Nvidia chips to China could backfire on the U.S. the next time it tries to convince allies to restrict their advanced technology shipments to China, Divyansh Kaushik of Beacon Global Strategies said.
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Kaushik, speaking during an event this week hosted by the Hudson Institute, noted that the U.S. has urged the Dutch and Japanese governments in recent years to curb exports of high-end chip manufacturing equipment to Beijing. But the U.S. may now lose credibility in those talks after administration officials this week said they planned to allow Nvidia to export its advanced H20 chips to China in exchange for China easing export restrictions over certain rare earths (see 2507150013).
“My worry is that our unilateral actions on putting export controls and taking them back as part of trade negotiations undermines our credibility” with allies, said Kaushik, who previously served as associate director for emerging technologies and national security at the Federation of American Scientists.
Although U.S. officials have asked the Netherlands and Japan to “match” U.S. national security controls, that argument may no longer work because “tomorrow we may decide to sell to China, because it gets us a better trade deal,” Kaushik said. “So that's somewhat of a worry for me.”
White House AI adviser David Sacks and Treasury Secretary Scott Bessent said this week that the U.S. is OK with approving H20 chip exports because they aren’t “state-of-the-art” and China may already have equivalent chips. But Kaushik noted that just 2,700 H20s can be used to “gain supercomputer performance. That’s it. You don't even need a million.”
“There's a reason why we export controlled it,” he said. “We want to deny China not just the best models, but the technology to diffuse that. We want to deny them an ecosystem.”
Rep. Bill Huizenga, R-Mich., said during the event that he plans to seek more information from the Trump administration about why they’re approving the chips. Asked how he views the “trade-off” between safeguarding national security and making sure U.S. technology exports aren't replaced by foreign competitors, he said: “I mean, that is the question, right? That's the question that we are all struggling with. I'm not sure anybody knows the right answer.”
Huizenga said he has spoken with some industry officials who believe the U.S. has a far enough technological lead over China that it’s OK to allow Beijing access to some chip technology. But he said others “really truly believe that any access and anything that we can do to hamper their leaps and bounds, advancements, in any way, or the chance of them taking a larger leap than what had been anticipated, that that is worth whatever the pain and effort is to go into it.”
He said he’s "looking forward to having that conversation” with the Trump administration to learn “exactly what they view and how they view their actions, what that's going to mean for us vis-a-vis competition.”
Huizenga also mentioned the Chip Security Act, the bipartisan bill that would require export-controlled advanced computing chips to contain location verification mechanisms (see 2507080001). He stressed that the legislation doesn’t “advocate for some sort of kill switch” in which the chip would cease to function if it was being used in a way that violated export controls, although “that had been discussed.”
Researchers have said that technology -- including certain on-chip governance mechanisms -- could take years for companies to implement (see 2401080060 and 2507070032).
“That, in my estimation, is not the direction that we want to go,” Huizenga said. He added that the bill isn’t “requiring costly changes to the hardware,” and the lawmakers have been working with industry to craft the bill in a way that they believe companies can implement.
“We've been trying to make sure that we are able to get on a path here that is going to be effective but also practical, and that we're able to actually achieve the goal and objective here,” he said. “And we think that that's where we're going to end up landing with.”
At least one former Bureau of Industry and Security enforcement official said companies would likely report many “false positives” if they were mandated to inform BIS each time their chip was diverted to an unauthorized end-user (see 2507070032). But Huizenga said it would help BIS.
“This information enables BIS to investigate violations, deter smuggling activity, and impose significant costs on anyone,” he said. “But as we know, the [Chinese Communist Party] is a significant part of that.”