White House National Security Advisor Jake Sullivan will be meeting with some top Chinese officials March 18, but the trade war will not be front and center, he told reporters at a White House press conference March 12. A reporter asked what China would have to do for the U.S. to reduce or lift tariffs, or loosen export controls. “I don’t expect that, for example, the phase one trade deal is going to be a major topic of conversation next week,” Sullivan said; instead, it will be more about geopolitical issues and human rights, not details on tariffs and export controls. “But we will communicate that the United States is going to take steps, in terms of what we do on technology, to ensure that our technology is not being used in ways that are inimical to our values or adverse to our security. We will communicate that message at a broad level,” he said. He added that before the U.S. can begin negotiating on trade, there's more work to do with allies, “to come up with a common approach, a joint approach, before we go sit down point by point with the Chinese government on these issues.”
Exports to China
The U.S. needs to immediately modernize export controls and foreign investment screening mechanisms to counter Chinese technology advancement, a U.S. commission told Congress. The members of the National Security Commission on Artificial Intelligence, building off a report it released earlier this month, told lawmakers March 12 that the U.S. is in danger of ceding technology leadership over artificial intelligence if it doesn’t devote more resources to innovation and create a clearer national technology strategy.
The Chinese and American semiconductor industry associations will establish a China-U.S. semiconductor working group to streamline information sharing between the two industries, and exchange policies on export controls, supply chain security, encryption and other trade restrictions. The move was announced March 11 on the China Semiconductor Industry Association's website, according to an unofficial translation. The group plans to meet twice a year to address the most pressing issues surrounding semiconductors, including the current global shortage of the key technology, it said. Following the negotiations, each association will appoint 10 member companies to participate in the working group. CSIA is a state-backed association of 774 Chinese semiconductor-related businesses. Its American counterpart is the Semiconductor Industry Association, whose stated mission is lobbying “to strengthen U.S. leadership in semiconductor manufacturing, design, and research.” Neither group has announced participants for the working group.
Nine Republican senators on March 10 reintroduced a bill that they said will make the U.S. more competitive with China and counter illegal Chinese trade practices. The bill, originally introduced last year, would “tackle” Chinese efforts to “distort global markets” and allow U.S. technology companies to better compete with China by “increasing technology collaboration with allies and partners.” The bill also includes several policy statements about export controls and sanctions, and stresses that the U.S. should be “crafting multilateral export control measures” with allies and with multilateral control groups, including the Wassenaar Arrangement. Sen. James Risch, R-Idaho, the top Republican on the Senate Foreign Relations Committee who helped craft the bill, said the legislation may have bipartisan support. “We are committed to working with our Democratic colleagues to ensure the United States and its allies and partners are prepared for this competition,” he said.
Don Graves, President Joe Biden’s nominee for deputy commerce secretary, said export restrictions shouldn’t be removed from Huawei and that the Commerce Department should do more to promote U.S. leadership at international technology standards setting bodies. Graves also said he is open to imposing more export controls and other restrictions against China for human rights violations.
The U.S. needs to modernize its approach to export controls and expand disclosure requirements for foreign investment screening to maintain its technology dominance over China, a U.S. national security commission said in a report this week. The commission called current U.S. export controls outdated, urged the Commerce Department to more quickly control emerging and foundational technologies, and said the Committee on Foreign Investment in the U.S. should review a broader set of transactions to protect sensitive technologies.
In written questions to U.S. trade representative nominee Katherine Tai, she was pressed to argue for U.S. agricultural export interests around the world, and asked how China could be moved to meet more of its promises to buy American exports, agricultural and otherwise.
Rep. Mark Green, R-Tenn., reintroduced a bill Feb. 18 that would control the export of certain technology and intellectual property to China. The legislation was previously introduced in 2019, and it is among a slate of bills “to confront the Chinese Communist Party’s malign influence” reintroduced by Green.
A Commerce Department rule designed to cut off U.S. shipments to foreign military intelligence agencies in China, Russia and beyond could create a host of due-diligence issues for exporters, industry lawyers said. Those issues could be compounded by industry uncertainty surrounding the scope of the rule, which may be unclear without BIS guidance. “We're getting an enormous number of questions,” said Giovanna Cinelli, an export control lawyer with Morgan Lewis. “I think the rule is open to interpretation, and that’s creating uncertainty.”
Sen. Tom Cotton, one of the most prominent China hawks in Congress, thinks that the Bureau of Industry and Security is buried within an organization “hostile to the aggressive use of export controls,” and so it should be moved from the Commerce Department to the State Department, because, he says, that department puts national security first. Cotton, who has published a lengthy report on what he calls the economic long war with China, discussed his views during an online program at the Reagan Presidential Foundation on Feb. 18.