In its Twilight, Biden Administration Adopts More Export Controls to Restrict China’s Ability to Produce Advanced Semiconductors
Summary
Although the Trump transition is well underway, the Biden administration made news in the national security space by announcing significant new export restrictions on semiconductor equipment and technology destined for the People’s Republic of China (PRC). The rules—an Interim Final Rule and a Final Rule—include: • Revisions and additions to controls on 24 types of semiconductor manufacturing equipment (SME) and 3 types of software tools for developing or producing semiconductors; • Additions to Commerce’s “Know Your Customer” Red Flags to provide guidance to exporters; • Several noteworthy changes to enhance the effectiveness of previous controls; and New Restrictions Seek to Protect Critical Technologies and Restrict PRC Capabilities The new package of rules is designed to limit the PRC’s ability to indigenize the production of advanced technologies—such as advanced-node integrated circuits (ICs) and the equipment used to produce them—that the U.S. government believes pose a substantial risk to U.S. national security. In announcing the new restrictions, the Biden administration expressed concerns that the PRC uses these advanced technologies to modernize its military, improve its weaponry, and expand its surveillance capabilities, allowing it to further infringe on human rights. The administration’s so-called “small yard, high fence” strategy seeks to place tough restrictions on a limited group of sensitive technologies while otherwise allowing economic relations between U.S. and PRC entities. Similarly, Jamieson Greer, the nominee for U.S. trade representative, testified in May 2024 to the U.S.-China Economic and Security Review Commission that Congress should expand export controls on China to include the aircraft and transportation equipment industries.