Tech Sector Frets Over U.S. Export Controls
As regulators prepare to tighten U.S. export controls with an eye toward restricting technology transfers to China, industry groups are pushing back, arguing that overly restrictive rules would cost U.S. industry hundreds of billions in export sales.
Trade groups are meanwhile seeking to ensure that export control issues are not swept up in the current trade tensions between the U.S. and China.
Congress moved last year to expand export rules to cover so-called “emerging and foundational technologies” deemed vital to U.S. national security but not currently covered by existing regulations. Among the technology categories raising the most concern among industry groups are AI and machine learning, data analytics, emerging computing approaches such as “memory-centric logic” and quantum computing, encryption and sensing.
“Advanced technologies increasingly shape competitive advantage for nations around the world, including the United States,” said Stephen Ezell, vice president of the Information Technology and Innovation Foundation.
“Limiting U.S. exports would hold back American firms in the race for global innovation advantage by constraining their output, exports and employment growth,” added Ezell.
A report authored by Ezell and released this week by the Washington-based group argues that extending U.S. export controls to cover emerging technologies could cost U.S. companies as much as $56.3 billion in export sales over five years. The Washington-based group warns that could translate into employment losses ranging from 18,000 to 74,000 jobs.
Industry groups are especially concerned that lawmakers left undefined precisely what constitutes either emerging or foundational technologies. Those hotly-debated definitions were left to the Commerce Department’s Bureau of Industry and Security (BIS), which enforces U.S. export controls.
(Last week, for example, BIS added Chinese telecommunications giant Huawei Technologies to its “Entity List,” meaning U.S. suppliers would have to apply for a U.S. export license to provide components to Huawei.)
Last fall, the export bureau released a list of 14 categories being considered as “emerging technologies.” The AI category included neural networks and deep learning models, object recognition, natural language processing along with related cloud computing and AI chipsets.
A wide range of processor technologies are also listed as candidates for export restrictions, including systems-on-chip and 3D memory, as well as emerging in-memory processing techniques.
Industry groups are bracing for another list of “foundational technologies” expected to be released soon. That category may include “certain key commodities or technologies that today are lesser controlled and which may not require a license or could go under a license-exception mechanism,” the industry report noted.
A chip industry group warned against mixing current trade tensions between Washington and Beijing with the formulation of new technology export rules designed to address national security. “Don’t use export control as a tool to address a trade problem,” Jimmy Goodrich, vice president of global policy at the Semiconductor Industry Association, said during recent panel discussion on the future of the Chinese chip industry.
Expanded U.S. export controls should have a “minimal amount of blow-back” on domestic chip makers, Goodrich added.
“Companies are worried that there are some parts of the government that would prefer a very broad catch on China, and that would have harm to industries around the world,” said James Lewis of the Center for Strategic and International Studies. Nevertheless, he concluded, “I think you’ll see a desire for increased controls.”
The Commerce Department isn’t expected to complete its review of industry comments for several months. Therefore, Lewis predicted a new U.S. export regime wouldn’t be ready until next year at the earliest.