The US administration is putting the final touches on a plan to limit key technology exports to rivals like China, Reuters reported on Tuesday.
Why it matters: The US is balancing the need to maintain access to an important consumer market with keeping its homegrown technology from falling into the hands of adversaries. Rhetoric from administration officials as well as the blanket export ban on Huawei, the world’s largest telecommunications equipment manufacturer, have alarmed American companies, which have lobbied for more relaxed rules.
Details: The rules will be submitted to international trade bodies for review, so that they can be implemented by US companies’ overseas subsidiaries as well, according to Reuters, though the review process would also slow down the roll out of restrictions, likely to mid-2021.
- In 2018, the US Congress reformed export controls to include “foundational and emerging technologies,” which were later listed by the Bureau of Industry and Security. According to Reuters, the new rules will include 3D printing and quantum computing.
- It is likely that the rules will be open for comment from industry experts before they become official, Reuters said.
- The document was drafted by the US Commerce Department, the federal authority regulating international trade.
Context: Other than Huawei, the US has imposed export restrictions on the world’s most valuable artificial intelligence (AI) startup, Hong Kong-based Sensetime, as well as natural language-processing company iFlytek, and surveillance system manufacturers Hikvision and Dahua Technology.
- American chipmakers lobbied aggressively in Washington for an ease of the export ban.
- In 2018, the federal Bureau of Industry and Security identified technologies like AI, semiconductors, autonomous vehicles, robotics, and biotechnology as key to its economic supremacy and national security. These priorities were passed in law through the National Defense Authorization Act, an annual bill that outlines national security priorities.
- The trade war has also crimped growth in the Asia-Pacific region, as a business confidence index hit a 10-year low in June, according to a report by INSEAD business school and Thomson Reuters.