The Commerce Department should tighten export restrictions on China’s top chipmaker to prevent it from importing sensitive semiconductor equipment and exploiting a U.S. export control loophole, Sen. Marco Rubio, R-Fla., and Rep. Michael McCaul, R-Texas said. The lawmakers, who voiced similar concerns to Commerce last year (see 2103190005), said in a March 17 letter to Commerce that its export control licensing policies for Semiconductor Manufacturing International Corporation are “ineffective” and are denying less than 1% of export applications to sell technology to the company.
Exports to China
Ahead of a meeting with Chinese officials, U.S. national security adviser Jake Sullivan publicly warned China that it will face severe penalties if it helps Russia evade Western sanctions. The Biden administration is “watching closely” to see whether Beijing provides Moscow with “material support or economic support,” Sullivan told CNN March 13, which could give Russia an economic lifeline as it faces crippling financial restrictions from Europe, the U.S. and many of its trading partners.
Russia’s aviation authority said China has declined to provide Russian airlines with aircraft parts, some of which are subject to Western sanctions, Reuters reported March 10. The announcement came after Boeing and Airbus ceased providing Russia with aircraft components, which are subject to U.S. and EU export controls. A Russian official told the country’s news agencies that it will look to source parts from other countries, including Turkey and India, after a “failed attempt to obtain them from China,” according to the report. The U.S. Department of Commerce has threatened to penalize Chinese companies that help Russia evade export restrictions, including placing them on the Entity List (see 2203080053).
The EU ambassador to Washington, Stavros Lambrinidis, said that settling trade irritants between the U.S. and Europe and setting up the EU-U.S. Trade and Technology Council made it easy to get a unified front on export controls done quickly after the Russian invasion of Ukraine. The TTC "ensured every player that’s important in this field could get on the phone and get it done," he said during a March 9 webinar hosted by the World Trade Center in Washington, D.C., and the Washington Intergovernmental Professional Group.
The Commerce Department could impose strict export controls, including through the Entity List, on Chinese companies that violate U.S. export restrictions against Russia, agency officials said this week.
While China may help Russia evade some export controls imposed by the U.S., the EU and others, the fear of secondary sanctions and other trade restrictions will likely deter it from providing significant help to Russia, said Emily Kilcrease, an energy, economics and security expert at the Center for a New American Security. Chinese companies could find themselves on the Entity List for aiding Russia’s export-control evasion efforts, Kilcrease said, and could also face strict trade restrictions by Europe.
New sanctions on the Russian Central Bank, Ministry of Finance and two Russian investment funds announced Feb. 28 are the “most significant action” the Treasury Department has ever taken against an economy the size of Russia, said a senior administration official that day. “We're doing exactly what we said we’d do,” the official said during a call with reporters. “We said all options are on the table, including the most severe sanctions ever contemplated against Russia.”
U.S. export controls on quantum computing and communication technologies would slow scientific progress and fail to target the most “defense-relevant applications,” the nonprofit Rand Corp. said in a recent report. The think tank said the U.S. should “not impose export controls on quantum computers or quantum communications systems at this time” or risk stifling American quantum innovation.
Although the U.S should take steps to punish Chinese cyber hackers through sanctions and export controls, it shouldn't expect those tools to slow China’s cyber hacking capabilities, experts told the U.S.-China Economic and Security Review Commission. They said the U.S. should use sanctions in conjunction with other defensive tools to make it harder for China to carry out hacking.
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