US Failing to Impose Adequate Tech Restrictions on China, Expert Says
The U.S. isn't doing enough to compete with China on technology, partly because of its failure to meaningfully restrict outbound investments and its willingness to let American companies continue to sell advanced chips to China, said Derek Scissors, a senior fellow at the American Enterprise Institute.
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Scissors, writing this week for The National Interest, a magazine published by the Center for the National Interest think tank, said the Trump administration appears to be continuing what he called a failed U.S. strategy of trading technology for “supposed” market access in China. He also wrote that after years of “complaining about infringement and theft of intellectual property” by the Chinese government, the U.S. “has not seriously punished a single” Chinese company.
“For this reason alone, it’s impossible to take American policy seriously,” Scissors wrote. “While Beijing will always make foreign technology acquisition a cornerstone of its competition strategy, we have made its job easy.”
Scissors specifically criticized U.S. outbound investment restrictions (see 2410280043), noting that the Biden administration took “its full four years to issue an executive order that did almost nothing.” He also noted that Congress is still trying to pass legislation to strengthen those measures (see 2507220038).
“The inaction of a Republican-controlled Congress on outbound investment and the silence of the second Trump administration indicate that nothing will be done for at least several more years,” Scissors said.
He also noted that the Trump administration’s apparent goal of tightening export controls on China “turned out to be only a bargaining chip,” especially after the administration loosened certain controls in exchange for Beijing easing its restrictions over rare earth minerals (see 2506270009), and after the U.S. announced it would be granting license applications for Nvidia to sell its previously restricted H20 chips to China (see 2508220003).
The administration’s deal to take 15% of Nvidia’s revenue from those H20 sales to China “could be found unlawful,” Scissors said. But he also noted that Trump has said he’s open to negotiating a deal with Nvidia that would allow it to export a diminished version of the company’s more sophisticated Blackwell chip (see 2508110044).
“The US government has seen American companies make money selling to China while working against the national interest,” Scissors wrote, “and apparently wants to get in on the action.”