The Evolution of U.S. Thinking and Policy
In the last few years, the U.S. government has come to see technological interdependence with China as a major threat to American security, prosperity, and values. Washington fears that Beijing can leverage technological linkages to steal secrets, spread disinformation, surveil dissidents, hold U.S. infrastructure hostage, and leap ahead in economic competition, among other threats. As a result, U.S. officials of both parties have sought to substantially—though not completely—reduce the flow of technology products, services, and inputs to and from China. This process is sometimes called “technological decoupling.”1 Decoupling is not just a bilateral phenomenon, nor is it entirely the product of governmental policy. Many public and private sector actors around the world are contributing—in different ways, and with varying motivations and levels of enthusiasm—to the trend.
Although the overall trend toward technological decoupling is clear, its exact course and ultimate extent remain unknown. There are many possibilities. In an extreme scenario, decoupling widens and accelerates until distinct geo-technological spheres emerge—one centered on the United States, one centered on China, and perhaps others. Because technology is so intertwined with all commercial activity, such a technological split would drastically reduce every kind of economic interaction between China and the U.S.-aligned world. In the opposite scenario, U.S.-China technology ties gradually begin to stabilize, finding a new equilibrium that preserves the vast bulk of the global technology supply chain. Various other scenarios lie in between these two poles, and many international actors are vying to shape the future.
The U.S. government has been a principal driver of recent technological decoupling with China and remains uniquely able to adjust this global trend up or down.
The most important decisionmaker, for now, is the U.S. government. Washington has been a principal driver of recent technological decoupling with China and remains uniquely able to adjust this global trend up or down. By comparison, other major actors have been more reactive. While Beijing has long maintained its own limits on American and other foreign technology, it has been more hesitant than Washington to add significant new technology restrictions in recent years. China still appears interested in retaining many of the technological links it has built over decades, at least until it can position itself for greater self-sufficiency. Beijing has therefore responded in a cautious, reciprocal manner to many U.S. tech restrictions (though it is gradually becoming more assertive). Other governments and private sector players have diverse views on technological decoupling, yet very few are as forward-leaning as the U.S. government, and none has pushed the trend as forcefully and effectively.
A New Conventional Wisdom
Two broad trends have driven the U.S. government’s recent interest in technological decoupling. First, beginning in the mid-2010s, U.S. policymakers and political leaders developed much darker views of China. Previously, most in Washington had believed that China’s rise was largely compatible with and even beneficial to American interests. Although Beijing’s human rights abuses, market distortions, and other behavior were always points of friction, U.S. officials in the 1990s and 2000s thought the best solutions were further integration of China into global institutions and deepening of bilateral political and economic engagement.2
This official consensus, never without dissenters, eroded and eventually collapsed during the Obama administration. Major catalysts included China’s militarization of disputed islands and broader military buildup; its unrelenting intellectual property theft and exploitation of international trade rules to move up the economic value chain; its deepening authoritarianism and abhorrent repression of Uyghurs and other minority groups; and its bolder encroachments on Hong Kong and Taiwan.3 Across the board, China seemed increasingly intent on and capable of challenging U.S. interests, values, and visions of global order. These developments caused a sea change in U.S. thinking on China. Within a few short years, cautious optimism or ambivalence turned into distress and fear, and most U.S. policymakers came to identify Beijing as America’s primary long-term state threat (see Table 2). As a result, U.S. leaders belatedly started to scrutinize the many ways their country had become dependent on or supportive of China in prior decades—with technology rightly emerging as a central concern.
Second, during roughly the same period, techno-nationalist ideas became ascendant around the world and eventually took hold in the United States. By the 2010s, digital technologies such as online platforms, mobile devices and apps, streaming media, and targeted advertising had matured into powerful new global industries, unsettling previous economic structures. Some tech firms, like social media companies, even subsumed state-like functions—setting terms for public discourse and determining when and how governments could access their own citizens’ private information. Digital technologies also came to have great value in espionage and warfare. Because the most globally successful tech companies were American, China and many other countries bristled at the entrenchment and extension of U.S. influence. They sought ways to claw back some measure of digital sovereignty—especially after Edward Snowden’s disclosures about U.S. surveillance.
Washington was more sanguine at first. It had long extolled the digital globalization led by U.S.-based multinational tech companies, which enriched Silicon Valley and empowered America on the world stage. But an onslaught of major cyber and influence operations by foreign actors, including China, gradually convinced U.S. leaders that America’s digital openness was also a vulnerability.4 Meanwhile, there was growing apprehension about the next wave of emerging tech, especially machine learning and 5G. These innovations were said to be even more transformative than previous digital technologies—but this time, China would rival or even surpass Western capabilities, in part due to Beijing’s organized exploitation of its technological links with the West. Washington finally realized what other governments already understood: technology had become a key arena of interstate competition that could not simply be left to the marketplace. U.S. technology would need to be better protected from adversaries and more closely aligned with national strategy.
These two trends gave birth to a new American techno-nationalism focused principally on China. The basic ideas began to take shape during former president Barack Obama’s second term and drove a few early regulatory actions.5 The Trump administration then went much further, elevating techno-nationalist thought within U.S. strategy and rhetoric and greatly expanding the number and scope of measures targeting Chinese tech threats. President Joe Biden, while making some tactical adjustments, has largely followed suit so far. There is now bipartisan consensus that the U.S. government must take a lead role in organizing the American technology ecosystem to reduce its interdependence with China.
Past Precedents
Today’s American techno-nationalism is not wholly unprecedented. In fact, much of the institutional architecture that Washington now uses to nurture and protect U.S. technology strength originated during two prior techno-nationalist periods. Early in the Cold War, U.S. leaders recognized that science and engineering would be key factors in America’s military and geopolitical struggle with the Soviet Union. Thus they created the National Science Foundation, spent extraordinary sums on the Space Race, used defense contracts to seed what would become Silicon Valley, expanded the federal role in higher education, and worked with allies to establish the Coordinating Committee for Multilateral Export Controls (COCOM).6 By the time the Cold War was receding in the late 1980s and early 1990s, Japan had emerged as a fierce economic and technological competitor to the United States. This spurred another wave of U.S. techno-nationalist policies, including the creation of SEMATECH, a public-private partnership with the domestic semiconductor industry, and the Exon-Florio Amendment, which transformed the Committee on Foreign Investment in the United States from a sleepy study group into a powerful regulator of cross-border deals.7
These earlier periods of techno-nationalism, which are still being debated, offer many potential lessons for today’s U.S. policymakers.8 Yet historical analogies should be treated with caution, as they fail to capture unique features of the current China challenge. The United States has successfully contested a geopolitical adversary (the Soviet Union) and a modern technological competitor (Japan), but it must now face a single rival that plays both these roles at once and has more latent capacity than either of its predecessors.
The United States has successfully contested a geopolitical adversary (the Soviet Union) and a modern technological competitor (Japan). But China now plays both these roles and has more latent capacity than either predecessor.
China’s economy could become the world’s largest in a decade, and it is already about 70 percent as big as America’s in nominal terms—roughly equal to Japan’s peak proportion (in 1995) and perhaps twice the share (or more) ever achieved by the Soviet Union.9 China’s population is more than four times that of the United States, whereas the Soviet Union was only slightly larger than America, and Japan much smaller.10 Of course, China lacks the Soviet Union’s world-class nuclear arsenal and large network of allies, client states, and ideological bedfellows. And Beijing has fought no proxy wars in recent decades. Yet its deep economic and technological integration with the U.S.-aligned world grants it opportunities that the Kremlin never had, creating novel dilemmas for Washington. And while the Chinese economy faces serious demographic, financial, and political risks in the years to come, Beijing’s signature brand of state-guided capitalism appears more dynamic and resilient than the creaky machinery of Soviet central planning.
The technological landscape has also changed a great deal since the mid-to-late twentieth century. Then, the U.S. government was a leading innovator in its own right and “spun off” many breakthroughs to the private sector. Now, private companies develop the most exciting new technologies while the public sector scrambles to understand and absorb them. Then, Washington had relatively cozy relationships with large American companies—as expressed in the famous (though hyperbolic) claim that “what was good for our country was good for General Motors, and vice versa.”11 Today, major U.S.-based tech firms are vast, multinational, digital-physical enterprises with complex loyalties and their own foreign policies.12
The American nation has also changed, as has the world and the U.S. role within it. Domestic social cohesion, governance capacity, and political stability have plummeted.13 U.S. leaders now struggle to do anything big at home, or even to rally the country in the face of foreign threats. Looking outward, Washington confronts a more multipolar system and a somewhat strained set of alliances. America still leads, but with diminished influence, credibility, and prestige. Today’s world is also much more interconnected, thanks in large part to decades of U.S.-driven globalization. Collaborative scientific research and international technology supply chains span the globe, creating efficiencies never before possible. But this interconnectedness also comes with looming, systemic risks: global climate change, global financial crises, global pandemics, global supply chain disruptions, and global cyber incidents, among others.14 Global challenges demand global cooperation, yet international institutions have struggled to meet the moment.
Techno-nationalism must be reconsidered for a radically changed world. This means looking with fresh eyes at familiar strategies and policies.
In short, U.S. leaders find themselves in uncharted territory. Although America has a rich heritage of techno-nationalist thought and policy to draw upon and learn from, today’s circumstances are quite different from those faced by previous generations. Techno-nationalism must be reconsidered for a radically changed world. This means looking with fresh eyes at familiar strategies and policies.
“Offensive” and “Defensive” Measures
U.S. techno-nationalist policies are often divided into two groups. “Defensive” measures aim to thwart and contain technology threats from China, while “offensive” measures seek to nurture America’s own technological strength. During the Trump era, policymakers in the administration and Congress overwhelmingly focused on defensive measures, such as export controls, investment restrictions, and the denial of visas and regulatory licenses for Chinese workers, students, and businesses. While defensive measures are still being actively developed and deployed, there is now some consensus—among Biden administration officials, members of Congress, and outside policy experts—that offensive measures deserve far more attention. This shift can be seen in bills like the U.S. Innovation and Competition Act and the America COMPETES Act, two mammoth pieces of draft legislation. Although the bills contain multiple defensive measures, they focus primarily on offensive goals like funding and facilitating R&D.
That said, defensive measures continue to raise some of the most acute policy dilemmas. On the one hand, these tools provide uniquely powerful means for Washington to reshape the bilateral technology relationship. Regulations and other coercive federal powers can be used to quickly sever technology links deemed unduly risky. This obviates the need for U.S. leaders to cajole American businesses or universities with patriotic appeals, to place faith in blind market forces that may not align with national policy, or to negotiate directly with the Chinese government or (sometimes) with other governments. Moreover, the executive branch can often impose defensive measures on its own initiative, without the need for new statutes or spending bills from Congress.
However, defensive measures can come with significant costs and risks. They may cut off—perhaps abruptly—key sources of labor, supplies, and funds that U.S. businesses and universities depend on to develop and deploy important technologies.15 Defensive actions may provoke China’s ire, triggering various forms of retaliation and further damaging a sensitive bilateral relationship. Allies and trading partners may also object to or resist U.S. actions that disrupt global technology supply chains. Moreover, each new defensive measure raises the possibility of still more restrictions in the future, causing outside actors to try to get ahead of U.S. policy and thereby increasing the risk of a decoupling spiral that exceeds U.S. tolerances.
Thus, while U.S. leaders rightly refocus their attention on offensive actions to promote American technological strength from within, they must also make difficult decisions about the role of defensive measures. Washington must find a delicate balance that addresses legitimate concerns about Chinese technology while avoiding overreach and self-sabotage.
There are many kinds of defensive tools, and U.S. policymakers must have a firm grasp of their differences (see Table 3). Defensive tools are often described generically as “sanctions” or “blacklists,” but this conflates distinct legal authorities with a range of effects and implementing agencies. For example, SenseTime and Hytera are among the Chinese tech firms most targeted by U.S. controls, yet the restrictions imposed on each company do not overlap at all. Huawei, meanwhile, suffers from nearly all of the controls placed on both SenseTime and Hytera, plus others that are completely unique (see Table 4 at the end of the chapter).
What follows is a primer on key U.S. government authorities that have been, or could be, used to curb the flow of technology to and from China. It seeks to outline, in a slightly simplified form, the most important legal authorities. It describes which agencies are involved, what discretion they have, and how the Chinese tech sector has been targeted in recent years.16
Export Controls
U.S. export controls restrict the transfer of sensitive goods, services, and data to foreign countries. There are multiple, overlaying export control regimes administered by different federal agencies with distinct legal authorities. In general, controls can target the item being exported (as in “list-based” controls), the country an item is being sent to (as in economic embargoes), an item’s ultimate recipient (as in end-user or end-use controls), or some combination. Export controls vary in their restrictiveness, from total bans to permissive licensing processes. The government’s criteria for granting or denying licenses is a key determinant of an export control’s practical impact, though such criteria are often opaque to the public.17
U.S. law requires that export controls be justified on national security grounds. However, “national security” might conceivably include an economic component.
U.S. law requires that export controls be justified on national security and foreign policy grounds.18 Common rationales for export controls include maintenance of U.S. military superiority, nonproliferation of WMDs, and promotion of human rights. However, the concept of “national security” is subject to interpretation and might conceivably include an economic component. For example, the Export Control Reform Act (ECRA) of 2018 proclaims that U.S. national security “requires that the United States maintain its leadership in the science, technology, engineering, and manufacturing sectors, including foundational technology that is essential to innovation,” and that “such leadership requires that United States persons are competitive in global markets.”19 Congress passed ECRA in large part due to concerns about Chinese technological advancement.20
For military items, the primary export control regime is the International Traffic in Arms Regulations (ITAR), administered by the Department of State. ITAR includes a list-based control called the U.S. Munitions List (USML). Despite its name, the USML encompasses a great deal beyond munitions, including military electronics, military cryptographic systems, electronic intelligence systems such as offensive cyber capabilities, and a variety of technical data.21 The current list reflects a ten-year effort by the State Department to de-list “less sensitive items” and transfer them to more permissive regulatory regimes.22 The USML is now meant to cover only “those items that provide the United States with a critical military or intelligence advantage or, in the case of weapons, perform an inherently military function.”23 Nothing on the USML may be exported to China.24 And in 2020, then president Donald Trump ordered that Hong Kong be treated as part of China under U.S. export control (and other) laws—effectively barring the transshipment of USML items through this global trading hub and port city.25
Civilian, dual-use, and less sensitive military items are governed by the Export Administration Regulations (EAR), which the Department of Commerce administers.26 The EAR has multiple components, including a list-based regime called the Commerce Control List (CCL). Each item on the CCL has one or more “reasons for control” that explain the listing’s justification and determine which countries it affects. Relatively few reasons for control apply to Canada, for example—only those based on chemical and biological weapons nonproliferation or the Inter-American Firearms Convention. China, by contrast, is subject to a variety of control categories, including those tied to regional stability, missile proliferation, policing abuses, and broad national security concerns.27 The CCL contains—among many other items—certain software, technology, and manufacturing equipment used to design and produce semiconductors, some of which requires a license to be exported to China.28
The Commerce Department says that “generally, the licensing policy for China is to approve items for civil end use to civil end users.”29 However, differentiating civil from military (or dual-use) applications in China is no simple matter. Consider the EAR rule, adopted in 2020, that restricts certain exports—including “low-level electronics” and “mass market encryption hardware and software (such as laptops and smartphones)”—destined for Chinese “military end uses” and “military end users.”30 The latter category includes “any person or entity whose actions or functions are intended to support ‘military end uses.’”31 The nature and extent of such support, and its relationship to the exported item, are not explicitly defined. Thus, under a strict reading of this language, U.S. companies might need to obtain a license before “supplying non-sensitive, broadly available items to Chinese companies for civilian applications” if those Chinese companies also happen to do business, however little, with the People’s Liberation Army (PLA) or its affiliates.32 The Commerce Department publishes a Military End User (MEU) List to aid in due diligence, but it is nonexhaustive, meaning that a recipient’s absence from the list provides no guarantee that an export would be legal.33 As of yet, the MEU List does not include any well-known Chinese commercial technology firms.
The Export Control Reform Act also calls for an effort to identify and control “emerging and foundational technologies” that “are essential to the national security of the United States.”34 Congress drafted this provision in large part to prevent China from gaining early access to potentially important U.S. technology. However, the executive branch has struggled to define a set of “emerging and foundational technologies” that warrant export controls yet are not already subject to them. The Trump administration initially considered controls on a wide swath of “emerging” tech areas prioritized by Beijing’s Made in China 2025 plan, including genetic engineering, AI, additive manufacturing, robotics, and advanced materials.35 But U.S. businesses and universities pushed back hard against the notion of controlling such broad and commercially important categories. As a result, the Commerce Department opted to impose only a few narrow controls related to chemical and biological weapons development, high-end semiconductor manufacturing, and advanced digital forensics and lawful intercept.36
The Commerce Department also administers the Entity List, an end-user-based control that targets foreign companies and other entities involved in “activities contrary to the national security or foreign policy interests of the United States.”37 Designated entities can be barred from importing any items “subject to the EAR” (including almost any U.S.-origin product); the exporter must first obtain a license, which may be subject to presumptive denial.38 China has been a growing focus of the Entity List (see Figure 1). The number of unique China-based entries has quadrupled since 2018, from 130 to 532.39 Four years ago, China comprised only 14 percent of the Entity List; today, it accounts for 29 percent. Nearly half of the Entity List’s overall growth during that period came from new Chinese entries. The list now includes many of China’s leaders in areas such as telecommunications (Huawei), AI (SenseTime, Megvii, iFLYTEK), semiconductors (SMIC, HiSilicon, Phytium), digital cameras (Hikvision, Dahua), drones (DJI), cybersecurity (Qihoo 360), and supercomputers (China’s National Supercomputing Centers). These tech leaders were generally cited for supporting China’s human rights violations—particularly in Xinjiang—or its military advancement.
The EAR mainly governs U.S.-origin items—whether exported from the United States, re-exported from one foreign country to another, or transferred within a foreign country.40 But the regulations also cover some foreign-origin goods that have a nexus with controlled U.S. material. Two kinds of foreign products are deemed “subject to the EAR,” which means they cannot be re-exported to companies on the Entity List without a license. The first kind is foreign items that incorporate, or are comingled with, a threshold amount of controlled U.S.-origin content.41 For re-exports to China and most other countries, the usual “de minimis” threshold is 25 percent of an item’s fair market value. In other words, a Japanese computer costing $1,000 could not be re-exported to SenseTime if it contained more than $250 worth of controlled U.S. components.
The Trump administration created a harsher version of the foreign-produced direct product rule for Huawei and more than 150 of its affiliates.
The second category is so-called foreign-produced direct products—items that may not actually contain any controlled U.S. tech but were nonetheless designed or manufactured with the assistance of such tech.42 Traditionally, this rule covered only those foreign products deriving from a particular subset of controlled U.S. technologies: those placed on the CCL for “national security” reasons (as opposed to “anti-terrorism,” “regional stability,” and other rationales).43 But in 2020, the Trump administration created a harsher version of the rule for select companies on the Entity List—namely, Huawei and more than 150 of its affiliates.44 These companies, designated with “footnote 1,” need permission from the Commerce Department to import foreign semiconductor designs and finished chips (among other items) based partly on U.S. technology.45 Because the United States “maintains a significant leadership position in [semiconductor design] software and in some segments of semiconductor manufacturing tools,” this amounts to a broad-based ban.46 Licenses are available: the Trump and Biden administrations have both allowed Huawei to continue receiving billions of dollars of less-sensitive U.S.- and foreign-origin semiconductors and other goods.47 However, any chips destined for use in Huawei’s 5G systems are presumptively denied.48
U.S. controls are not only concerned with exports to foreign countries; they also restrict so-called deemed exports to foreign citizens, even those lawfully living and working in the United States. This rule means that some U.S. firms—including many in the semiconductor and telecommunications sectors—must apply for a license to employ foreign workers in certain technical roles, depending on their nationality and the controlled technology at issue.49 Prior to 2020, foreigners without military affiliations were exempt from this requirement; however, the Trump administration eliminated this exemption.50 China has been by far the biggest supplier of foreign workers subject to deemed export rules: it accounted for 44 percent of approved deemed exports between 2015 and 2019.51
Investment Restrictions
U.S. national security agencies can impose restrictions on inbound investments (foreigners investing in U.S. companies) as well as outbound investments (Americans investing in foreign companies).52 For inbound investments, the primary regulatory mechanism is the Committee on Foreign Investment in the United States (CFIUS), an interagency body chaired by the treasury secretary. CFIUS—or in rare cases, the president—can block transactions that “[threaten] to impair the national security of the United States.”53 In general, CFIUS can review only those transactions where a foreigner would acquire dominant control over a business with U.S. operations. However, the Foreign Investment Risk Review Modernization Act (FIRRMA) of 2018 broadened CFIUS’s jurisdiction over transactions involving “critical technology,” “critical infrastructure,” or “sensitive personal data.”54 For these, CFIUS can block even noncontrolling stakes that would nevertheless entitle foreign investors to access key information or influence corporate decisionmaking.55 FIRRMA, like ECRA, was principally intended to limit China’s access to U.S. technology.56
CFIUS has become more active in recent years as Washington has grown increasingly concerned with the national security risks of foreign investment and Congress has provided the body with new resources and authorities. Since 2017, more companies have had to notify CFIUS of covered transactions and to submit to CFIUS investigations; many have ultimately backed out of business deals amid CFIUS scrutiny.57 CFIUS has blocked Chinese acquirers from buying several U.S. tech companies, including Grindr (a dating app) and PatientsLikeMe (a healthcare social network) in 2019 and Stayntouch (a hotel management platform) in 2020.58 A CFIUS investigation also preceded Trump’s 2020 executive order requiring ByteDance to sell TikTok.59 CFIUS also stopped Ant Financial, a fintech affiliate of Alibaba, from buying MoneyGram in 2018.60 Meanwhile, Chinese investors have become less interested in transactions that involve notifying CFIUS (see Figure 2). They submitted just seventeen notices (9 percent of the global total) in 2020, down from sixty (25 percent) in 2017.61 Heightened CFIUS scrutiny is probably one of multiple factors at play; Chinese foreign direct investment in the United States fell across the board during this period.62
There is no body like CFIUS that systemically reviews Americans’ outbound investments for national security risks—though Congress and the Biden administration are actively exploring the idea.63 For now, outbound investments are subject to a few, narrowly defined restrictions. A 2021 executive order by Biden prohibits Americans from trading securities of any company designated by the Department of the Treasury as operating in “the defense and related materiel sector or the surveillance technology sector of the economy of the PRC [People’s Republic of China].”64 This Non-SDN Chinese Military-Industrial Complex Companies List—so named to differentiate it from the Treasury Department’s Specially Designated Nationals list, described later—currently cites sixty-eight Chinese companies, including tech firms like Huawei, Hikvision, SenseTime, DJI, Megvii, SMIC, China Telecom, China Unicom, and China Mobile.65 It replaced a very similar list, created by the Trump administration, that was maintained by the Department of Defense (DOD) and did not cover surveillance technology.66
While outbound investment limits are currently narrow, pending regulations of U.S. stock exchanges may further diminish Americans’ practical opportunities to invest in Chinese tech firms (and other Chinese companies). The Holding Foreign Companies Accountable Act, passed in December 2020, takes aim at publicly traded companies whose financial statements cannot be adequately inspected or investigated by U.S. authorities due to foreign government obstruction.67 China has long hindered U.S. accounting oversight; in fact, it is the only country currently classified as doing so by the Public Company Accounting Oversight Board, a congressionally chartered nonprofit.68 The new law essentially gives China three years to come into compliance with U.S. accounting transparency standards. If it fails to do so, the Securities and Exchange Commission (SEC) must order the de-listing of Chinese companies from U.S. stock exchanges and bar other ways of trading their securities, like over-the-counter sales. There are currently about 225 U.S.-listed Chinese companies, including tech giants such as Alibaba, JD.com, Baidu, and Weibo, plus a smaller number of firms traded over-the-counter, like Tencent and Kingsoft.69 SEC Chairman Gary Gensler recently warned that “the clock is ticking.”70 In fact, bills to accelerate the de-listing timeline by one year have already passed the Senate and been endorsed by House leadership.71
Telecommunications Licensing and Equipment Authorizations
Federal law gives the U.S. government several tools to restrict foreign involvement in domestic telecommunications. Any international carrier wishing to operate in the United States must first receive a “public interest” certificate from the Federal Communications Commission (FCC).72 In weighing the public interest, the FCC considers factors such as “national security, law enforcement, foreign policy, or trade policy concerns related to the applicant’s or authorization holder’s reportable foreign ownership.”73 Submarine cable landings likewise require an FCC license, which can be denied in order to “promote the security of the United States.”74
Although the FCC is an independent agency overseen by Congress, it “has sought the expertise of the relevant Executive Branch agencies for over 20 years, and has accorded deference to their expertise when they have identified . . . a concern in a particular application.”75 National security agencies convey their views on FCC licensing decisions through a forum known as Team Telecom, now formally called the Committee for the Assessment of Foreign Participation in the United States Telecommunications Services Sector, chaired by the attorney general.76 Team Telecom’s roles, responsibilities, and procedures were formalized in 2020, reflecting how national security has become increasingly central to FCC licensing decisions.
Team Telecom’s formalization reflects how national security has become increasingly central to FCC licensing decisions, particularly those involving China.
Since 2019, Team Telecom has successfully spurred the FCC to crack down on Chinese entities seen as “vulnerable to exploitation, influence, and control by the Chinese government.”77 The FCC has cited these concerns to deny China Mobile’s application for a carrier license and to revoke the licenses of China Telecom, China Unicom, and the Chinese firms Pacific Networks and ComNet.78 Team Telecom also recommended that the FCC deny permission for Pacific Light Cable Network System, a Chinese company, to lay an undersea cable between Hong Kong and the United States in partnership with Google and Facebook.79 The application was then withdrawn, as was another application for a U.S.–Hong Kong cable to be built by Facebook, Amazon, and China Mobile.80
Beyond telecommunications, the FCC also regulates radio frequency devices—an enormous category that includes “almost all electronic-electrical products” sold to businesses and consumers.81 Radio frequency devices must receive an equipment authorization, or qualify for an exemption, to be imported or marketed in the United States, and such decisions have long been based on technical criteria alone.82 In June 2021, however, the FCC unanimously voted to invite public comment on a proposal to incorporate national security considerations.83 It cited statutory and regulatory provisions allowing the commission to consider “the public interest” in making authorization decisions.84
Pending national security rules will lead to a virtual U.S. ban on new electronics made by certain companies—almost all Chinese.
The FCC proposed to deny authorizations and exemptions—and potentially revoke existing approvals—for equipment made by companies on its Covered List. This list, created by the Secure and Trusted Communications Networks Act of 2019, initially contained just five companies (all Chinese): Huawei, ZTE, Hytera, Hikvision, and Dahua.85 Congress mandated the inclusion of these companies, plus any other entity that the executive branch later determines “poses unacceptable risk to the national security of the United States or the security and safety of United States persons.”86 The FCC’s pending equipment authorization rules will lead to a virtual ban on new electronics made by Covered List companies. Although formal rulemaking is still underway, Biden in November signed the Secure Equipment Act, which compels the FCC to adopt the core of its proposed rule and thus renders public comments somewhat irrelevant.87
In March 2022, the FCC expanded the Covered List beyond the original five companies mandated by Congress. It added China Mobile, China Telecom, and Kaspersky Lab (a Russian cybersecurity firm).88 Kaspersky, the only non-Chinese company on the list, was most likely targeted due to Russia’s invasion of Ukraine. It is also the first software company to be listed, indicating the Covered List has broadened in scope and could come to include Chinese software companies as well. The FCC has promised that it will continue to list more companies as needed. One FCC commissioner has already proposed adding DJI, calling it “Huawei on wings.”89 Such a move could force DJI—by far the dominant drone-seller in the United States and globally—to exit the U.S. market.
Visa Restrictions
The U.S. government has the discretion to bar noncitizens from entering the country if they are deemed to be national security threats. It can do so for specific individuals or entire classes of people. One mechanism is Section 212(a)(3)(C) of the Immigration and Nationality Act (INA), which allows the secretary of state to exclude any noncitizen whose presence “would have potentially serious adverse foreign policy consequences for the United States.”90 The State Department cited this provision in 2020 to deny entry for “certain employees of Chinese technology companies,” including Huawei, “that provide material support to regimes engaging in human rights abuses globally.”91
Another powerful tool is the INA’s Section 212(f), which can be used to ban broad categories of foreigners. It allows presidents to exclude “all aliens or any class of aliens” whose entry “would be detrimental to the interests of the United States.”92 Every president since Ronald Reagan has used this authority at least once; Donald Trump used it particularly often.93 In May 2020, Trump suspended entry of all foreign graduate students and researchers with past or present ties to “an entity in the PRC that implements or supports the PRC’s ‘military-civil fusion strategy.’”94 This policy, which Biden retained, has so far led to the revocation of more than 1,000 visas and the denial of at least 700 to 1,300 visa applications.95 Georgetown’s Center for Security and Emerging Technology estimated that 3,000 to 5,000 Chinese students and researchers in science, technology, engineering, and math (STEM) could be excluded annually.96
Other policy tools can be used to limit foreigners’ opportunities to visit, study, and work in the United States without banning their entry outright.97 For example, the Trump administration proposed new regulations to shorten the length of F-1 (student) visas98 and to increase the minimum wages that employers would need to pay H1-B (specialty occupation) visa holders.99 Trump also signed an executive order temporarily suspending issuance of new H1-B visas to applicants outside of the United States during the COVID-19 pandemic.100 While none of these moves specifically targeted China, Chinese students and workers were among the largest groups affected.101 (Biden later suspended or rescinded these policies.102) Trump also restricted Chinese Communist Party members and their families to single-entry visas valid for one month, whereas other Chinese people can obtain multiple-entry visas lasting up to ten years; Biden has kept this policy.103
Import Restrictions
U.S. domestic law authorizes tariffs, duties, taxes, quotas, exclusions, and other import restrictions under certain circumstances. The lead agency is the Commerce Department, which investigates unfair foreign practices alleged by U.S. industry (or more rarely, launches self-initiated probes) and can impose import restrictions as a remedy.104 If Commerce finds that imported goods are being sold “at less than [their] fair value,” then it can impose antidumping duties to negate the predatory price cuts.105 If the imported goods have been subsidized by a foreign government, then the department can levy countervailing duties equal to the value of the subsidies.106 China has long been a top target of both antidumping and countervailing duties, though typically on raw materials and other commodities (not finished technology products).107
Antidumping and countervailing duties require the consent of the U.S. International Trade Commission (USITC)—an independent, nonpartisan, quasi-judicial body.108 The USITC must find that “an [existing] industry in the United States is materially injured, or is threatened with material injury” by the wrongful dumping or subsidy, or that “the [future] establishment of an industry in the United States is materially retarded.”109 The USITC also has its own separate authority, under Section 337 of the Tariff Act of 1930, to investigate “unfair methods of competition and unfair acts” by foreign entities.110 Section 337 investigations tend to focus on intellectual property violations, the main problems singled out in the statutory text. If a foreign product is shown to violate a U.S. patent, copyright, trademark, or other intellectual property protection, then the USITC can ban its importation or sale. Since 2018, the USITC has blocked the importation of some two-way radios made by Hytera because they violated Motorola’s patents.111 Hytera had apparently poached employees from Motorola and directed them to steal large amounts of design data before leaving their former company. (The Justice Department later indicted Hytera for conspiracy to commit trade secret theft.112) In 2020, the USITC ordered the exclusion of several popular DJI drone models that it found had infringed a U.S. patent held by Autel Robotics USA, the American subsidiary of a Chinese company.113 However, the order was paused and eventually rescinded after DJI and Autel reached a settlement in related litigation.114
USTR imposed tariffs on most imports from China in response to Beijing’s forced tech transfer, discriminatory licensing, strategic foreign investments, and cyber-enabled IP theft.
Antidumping duties and countervailing duties have a long, bipartisan pedigree and are specifically sanctioned by the World Trade Organization (WTO).115 (Section 337 is less commonly employed and has garnered occasional complaints from U.S. trading partners.116) But the Trump administration sought even more powerful trade weapons.117 It therefore dusted off several controversial statutes that had fallen into disuse during the WTO era.118 One of these was Section 301 of the Trade Act of 1974, which enables the U.S. Trade Representative (USTR) to investigate trade agreement violations or any other foreign “act, policy, or practice” that “burdens or restricts United States commerce” and is “unjustifiable,” “unreasonable,” or “discriminatory.”119 If it finds fault, USTR has broad discretion to institute retaliatory measures against the offending country. These measures—unlike antidumping and countervailing duties or Section 337 exclusions—can target “any goods or economic sector . . . without regard to whether or not [they] were involved in the act, policy, or practice” being investigated.120
In 2017, Trump ordered USTR to launch a Section 301 investigation into Chinese practices “that may be harming American intellectual property rights, innovation, or technology development.”121 USTR found China responsible for numerous unfair practices, including forced technology transfer, discriminatory licensing, strategic foreign investments, and cyber-enabled intellectual property theft.122 Based on these findings, USTR eventually imposed tariffs of 10 percent to 25 percent on the majority of U.S. imports from China.123 Affected goods include some finished tech products (such as certain monitors and touch screens, industrial robots, and specialized cameras) and technology components (like integrated circuits, batteries, cooling fans, and disk drives), but not other major categories like cell phones, laptops, or video game consoles.124 This was only the second time since 2001 that a new Section 301 investigation had led to unilateral U.S. trade restrictions.125 The tariffs remain largely intact today, though the Biden administration is now considering narrow carve-outs for products only available from China.126
Trump also resurrected another moribund authority, Section 232(b) of the Trade Expansion Act of 1962, which had not been used since 2001.127 This provision enables the Commerce Department to investigate whether “an article is being imported into the United States in such quantities or under such circumstances as to threaten to impair the national security.”128 If a national security threat exists, Commerce can remedy the threat by “tak[ing] action to adjust imports.” (There need not be any finding of unfair foreign practices.) Notably, the statute “recognize[s] the close relation of the economic welfare of the Nation to our national security,” opening the door for economically motivated import restrictions.129 In 2017, Trump ordered the department to self-initiate Section 232(b) investigations of steel and aluminum.130 The investigations led to new steel and aluminum tariffs on China and several other countries.131 So far, Section 232(b) has not been used to target Chinese technology.
In addition to these economic- and national security–oriented statutes, U.S. law has long prohibited the import of goods made with forced labor.132 Since 2018, Customs and Border Protection (CBP) has steadily ramped up enforcement against Chinese-origin items made by Uyghur detainees.133 CBP has issued several Withhold Release Orders to ban computer parts, silica-based products used in solar panels and electronics, and various non-tech goods from specified companies operating in Xinjiang.134 Dissatisfied with this piecemeal approach, Congress passed the Uyghur Forced Labor Prevention Act, which Biden signed in December 2021. It creates a rebuttable presumption that all Xinjiang-made goods are products of forced labor and therefore cannot be imported.135
Financial Sanctions
Dozens of U.S. government programs authorize financial sanctions on foreign individuals and entities.136 Congress created some of these programs, but most were fashioned by presidents using the International Emergency Economic Powers Act (IEEPA).137 IEEPA allows the president to declare a “national emergency” regarding “any unusual and extraordinary [foreign] threat . . . to the national security, foreign policy, or economy of the United States.”138 The president may then “deal with” the threat by blocking some or all financial activities of designated actors—for example, freezing their assets and barring them from receiving any money or property.139 Presidents have declared seventy-four national emergencies since 1979, with forty still in effect.140 (Emergencies must be renewed annually and comply with other procedural requirements in the National Emergencies Act.141)
After a sanctions program has been established, the power to designate specific actors is typically delegated to the Treasury Department. Those subject to the harshest sanctions are placed on Treasury’s Specially Designated Nationals (SDN) List.142 A review of this list shows that China has been sparingly targeted by U.S. financial sanctions to date (see Figure 3). The SDN List includes 332 China-based actors, about 3 percent of the global total (9,792).143 Moreover, these China-based actors were generally not sanctioned for China-specific reasons, such as involvement with Beijing’s domestic human rights abuses.144 Rather, most were punished for their dealings with North Korea, Iran, and other sanctioned nations. For example, the Chinese state-owned enterprise CEIEC (China National Electronics Import & Export Corporation) was designated in 2020 for helping undermine democracy in Venezuela by “supporting the Maduro regime’s malicious cyber efforts” and providing “a commercialized version of China’s ‘Great Firewall.’”145
Two relatively new sanctions programs have been used to target Chinese government officials and entities for their domestic abuses, suggesting that China could become a more explicit focus of U.S. financial sanctions over time. In 2017, Trump declared that “serious human rights abuse and corruption around the world” constituted a national emergency, invoking IEEPA and the Global Magnitsky Act.146 Seventeen Chinese individuals and organizations have been designated under this authority (mostly for activities in Xinjiang), and many more could be targeted in the future—including people or companies that provide “technological support” to Chinese human rights abuses.147 (The Uyghur Human Rights Policy Act of 2020 and the Uyghur Forced Labor Prevention Act of 2021 call for additional Xinjiang-related sanctions to be imposed.148) Trump created another new authority in 2020 to punish the suppression of Hong Kong’s autonomy, democracy, and human rights, including online censorship; forty-two local and national Chinese officials have since been designated on that basis.149
The draft U.S. Innovation and Competition Act, recently passed by the Senate, further suggests the likelihood of additional financial sanctions targeting China and its technology ecosystem. Identifying “sanctions and other restrictions” as “[central] to strategic competition with China,” the bill criticizes the executive branch for not sufficiently utilizing the “broad range of tough authorities” provided by Congress.150 It demands SDN List designation and/or other harsh sanctions for foreign actors found to be supporting trade secret theft or Chinese government efforts to “undermin[e] cybersecurity.”151 The equivalent House bill, the America COMPETES Act, contains no similar provisions.152
Technology Transaction Rules
The breadth and flexibility of executive powers can permit U.S. administrations to apply existing authorities in novel ways, sometimes spinning up whole new regulatory regimes without the need for further legislation. The Trump administration did this on several occasions. Leveraging IEEPA’s power to restrict “transactions,” Trump debuted new kinds of restrictions that operated differently from the SDN List—including what is now called the Non-SDN Chinese Military-Industrial Complex Companies List. This tool, described earlier, allows the U.S. government to ban outbound investments in certain Chinese firms while stopping short of a full asset freeze.
The breadth and flexibility of executive powers can permit U.S. administrations to spin up whole new regulatory regimes without the need for further legislation.
One of Trump’s most high-profile innovations was his attempted “app bans” of TikTok and WeChat.153 To impose these bans, Trump declared that “the unrestricted acquisition or use in the United States of information and communications technology or services” (ICTS) associated with “foreign adversaries” constituted a national emergency.154 His Commerce Department then issued rules to block app stores, hosting services, content delivery networks, and peering services from supporting these two apps—effectively banning them in the United States.155 Trump later sought to ban AliPay, Tencent QQ, and six other Chinese apps as well.156 But no app ban was ever enforced. Federal courts enjoined the TikTok and WeChat bans; Trump left office before detailed rules on the others could be published; and Biden wiped the slate clean.157
The ICTS supply chain security rule establishes a CFIUS-like mechanism for federal government review of almost any large-scale use of Chinese ICTS in the United States.
Mobile apps were not the only targets of Trump’s novel technology restrictions. Relying on the same ICTS national emergency, he ordered U.S. bulk power systems, which are key elements of the electrical grid, to curb the use of equipment sourced from “foreign adversary” countries such as China.158 Specifically, the Department of Energy barred Chinese equipment from being used in bulk power systems that serve military facilities “critical to the defense of the United States.”159 Biden paused implementation of this rule pending a review.160
More recently, the U.S. government has sought to replace such ad hoc restrictions with formalized regulatory structures. In March 2021, Biden allowed a major new regulation developed by the Trump administration to come into force. The ICTS supply chain security rule cites, once again, the national emergency regarding foreign adversary ICTS.161 It establishes a CFIUS-like mechanism for federal government review of almost any large-scale use of Chinese ICTS in the United States. The Department of Commerce can block such transactions if they pose “undue or unacceptable risks.”
Biden later issued an executive order outlining “a criteria-based decision framework and rigorous, evidence-based analysis” to help guide the rule’s application to internet-connected software.162 He told the Commerce Department to examine any links to adversarial military, intelligence, proliferation, or cyber activities, and to consider the quality of third-party auditing, the scope and sensitivity of data collected, the number and sensitivity of users, and any verifiable risk remediation measures, among other factors. The department has not yet taken any public enforcement action under the new authority, but multiple investigations are apparently under way. Commerce has issued subpoenas to unnamed Chinese companies, is reportedly investigating Alibaba’s cloud business and DiDi, and is probably also reviewing at least some of the mobile apps that Trump sought to ban by executive order.163
Federal Use and Spending Restrictions
The federal government has increasingly acted to limit its own use of and financial support for certain Chinese technologies, although these actions are not a primary focus of this report. These efforts can have wider impacts due to the U.S. government’s large purchasing power. Drones, for example, have been the target of several recent federal restrictions. The Defense Department suspended its purchase of all commercial drones in 2018 due to concerns about the security of Chinese products, and the next year, Congress permanently barred DOD from using any drones with Chinese components.164 After the Department of the Interior grounded its entire drone fleet for similar reasons, Trump sought to institute government-wide restrictions on foreign drones.165 Days before leaving office, he signed an executive order telling agencies not to buy drones whose key hardware, software, or data services come from “adversary countries” like China.166
Telecommunications and video surveillance equipment have also been subjects of recent China-related procurement restrictions. The National Defense Authorization Act for Fiscal Year 2019 included a provision—Section 889—prohibiting agencies from spending any federal funds on such equipment made by Huawei, ZTE, Hytera, Hikvision, and Dahua.167 This government-wide blacklist may expand in the future; the law allows DOD to add other firms “connected to” the Chinese government. (Any additions would automatically be placed on the FCC’s Covered List as well.168)
As the U.S. government curbs its own direct purchase or use of Chinese technology, it has also imposed parallel restrictions on federal contractors and grantees, a much bigger universe. Section 889, which blacklists certain Chinese equipment within the federal government, separately bars agencies from contracting with entities that “use” such equipment—even if their “use” has no connection to the federal contract and involves an unrelated unit of the contractor’s business.169 More than 16,000 companies had federal prime contracts as of 2018, suggesting the wide reach of Section 889.170 Similarly, the FCC has leveraged federal subsidies to discourage the private use of Chinese telecommunications equipment. It will subsidize carriers’ efforts to “remove and replace” Huawei and ZTE equipment, while denying future subsidies for carriers who retain such equipment.171 Although technically voluntary, this program operates as a de facto ban on Huawei and ZTE usage in the telecoms sector. Small and rural carriers cannot afford to lose federal funds, while large carriers already generally avoid Huawei and ZTE.172
Law Enforcement
Outside the regulatory domain, federal law enforcement activities can also have the effect of restricting China’s illicit (and licit) access to U.S. technology. From November 2018 to February 2022, the China Initiative was the Department of Justice’s strategic campaign to investigate and prosecute theft of trade secrets, espionage, foreign influence activities, supply chain subversion, and other threats from China. The Justice Department publicly categorized at least seventy-seven criminal cases against more than 150 defendants as part of the China Initiative, according to a database compiled by the MIT Technology Review.173 However, the Justice Department had no official definition of a China Initiative case, and many of these cases would presumably still have been filed even without such an initiative. The most high-profile indictments charged Huawei and its chief financial officer, Meng Wanzhou, with theft of trade secrets and fraud.174 Cases against other Chinese, American, and third-country nationals and companies alleged export control violations, hacking, economic and national security espionage, and failure to register as a foreign agent.175 Many cases did not have an explicit connection to the Chinese government.176
The most controversial and arguably significant element of the China Initiative was the Justice Department’s crackdown on what it called “nontraditional collectors” at U.S. universities. Fearing illicit transfer of technology and intellectual property, federal prosecutors charged about twenty U.S.-based Chinese and American researchers with hiding their ties to the Chinese government.177 For example, multiple cases alleged that researchers applied for federal grants without disclosing their participation in Beijing’s Thousand Talents Plan.
The crackdown led many Chinese researchers to leave the United States and made American academics more reluctant to collaborate with Chinese counterparts.178 Critics called this a harmful chilling effect, but Justice Department officials (even well into the Biden administration) characterized it as successful deterrence.179 Over time, some of the cases proved weak. Since 2021, the department has dropped charges against five Chinese researchers, dismissed its case against a China-born American academic, and failed to convict a Chinese Canadian professor.180 It also secured some victories, such as the conviction of a high-profile American chemistry professor for hiding his ties to China.181
After a monthslong review, the Biden administration announced an end to the China Initiative in February 2022.182 The change was partly cosmetic: the Justice Department’s China-related work largely continues under different branding. Matt Olsen, assistant attorney general for national security, explained that the China Initiative label “helped give rise to a harmful perception that the department applies a lower standard to investigate and prosecute criminal conduct related to that country or that we in some way view people with racial, ethnic or familial ties to China differently.” Although Olsen disputed this perception, he nevertheless announced one key policy change. “Cases involving academic integrity and research security” (formerly described by the more charged term “nontraditional collection”) are now mainly handled as administrative matters by the federal agencies that fund research. Prosecutions of such cases will be rarer and require closer scrutiny from senior department officials.183
Implications for U.S. Strategy
This overview of U.S. policy tools holds at least two important lessons for American strategists weighing the larger issues at stake in technological decoupling. First, Washington’s restrictive powers are dizzyingly complex to administer, with authority fragmented across multiple agencies, statutes, and policy areas. It is therefore essential to articulate a government-wide strategy that can align these disparate elements into a coherent whole. Without such a strategy, different policy levers may operate out of sync, or even work at cross-purposes, based on agencies’ divergent views of key goals and trade-offs.
Second, U.S. law gives the executive branch vast discretion to pursue a technological decoupling of its choosing. By interpreting pliable concepts like “national security” or “the public interest,” U.S. officials can unlock an extraordinary range of powers to restrict the technology products, services, and inputs flowing between America and China. Most of these powers have only been used to a tiny fraction of their full potential. And Congress has been an eager partner—providing several new authorities and prodding administrations to act. Legally speaking, U.S. officials have a blank canvas on which to paint new restrictive measures and effect technological decoupling.184 This is both an opportunity and a danger, as overreach becomes more likely in such circumstances.
All of the policy tools defined and explained above will be collectively referred to as “technology restrictions,” “technology controls,” or “defensive measures.” The remainder of this report explores which technologies Washington should target with this general tool kit to reduce U.S.-China technological interdependence. Identifying the best tool or tools to use with each technology area is a topic for another paper.
Notes
1 See endnote 2 in the Executive Summary for a discussion of this term and how it relates to this report’s scope.
2 A 2005 speech by then deputy secretary of state Robert Zoellick crystallized this viewpoint, which was already widely held and would continue to hold sway into the Obama administration. Robert B. Zoellick, “Whither China: From Membership to Responsibility?,” State Department, September 21, 2005, https://2001-2009.state.gov/s/d/former/zoellick/rem/53682.htm.
3 Zoellick himself recognized these concerns in a 2019 speech, though he opposed the “logic of constant confrontation” that had come to characterize Washington’s China policy. Robert B. Zoellick, “Can America and China Be Stakeholders?,” Carnegie Endowment for International Peace, December 4, 2019, https://carnegieendowment.org/2019/12/04/can-america-and-china-be-stakeholders-pub-80510.
4 Jack Goldsmith and Stuart Russell, “Strengths Become Vulnerabilities: How a Digital World Disadvantages the United States in Its International Relations,” June 5, 2018, Hoover Institution, Aegis Series Paper no. 1806, June 5, 2018, https://www.hoover.org/sites/default/files/research/docs/381100534-strengths-become-vulnerabilities.pdf.
5 For a notable executive branch action, see “President Obama Blocks Chinese Acquisition of Aixtron SE,” Covington & Burling, December 5, 2016, https://www.cov.com/-/media/files/corporate/publications/2016/12/president_obama_blocks_chinese_acquisition_of_aixtron_se.pdf. In Congress, a 2012 committee report on Huawei and ZTE became a touchstone for future scrutiny of these companies and Chinese technology more generally. House Permanent Select Committee on Intelligence, Investigative Report on the U.S. National Security Issues Posed by Chinese Telecommunications Companies Huawei and ZTE, October 8, 2021, https://republicans-intelligence.house.gov/sites/intelligence.house.gov/files/documents/huawei-zte%20investigative%20report%20(final).pdf.
6 Seth Center and Emma Bates, “Tech-Politik: Historical Perspectives on Innovation, Technology, and Strategic Competition,” CSIS, December 19, 2019, https://www.csis.org/analysis/tech-politik-historical-perspectives-innovation-technology-and-strategic-competition.
7 James L. Schoff, “U.S.-Japan Technology Policy Coordination: Balancing Technonationalism With a Globalized World,” Carnegie Endowment for International Peace, June 29, 2020, https://carnegieendowment.org/2020/06/29/u.s.-japan-technology-policy-coordination-balancing-technonationalism-with-globalized-world-pub-82176.
8 Adam Kline and Tim Hwang, “From Cold War Sanctions to Weaponized Interdependence: An Annotated Bibliography on Competition and Control Over Emerging Technologies,” Center for Security and Emerging Technology, September 2021, https://cset.georgetown.edu/publication/from-cold-war-sanctions-to-weaponized-interdependence/.
9 Eric Zhu and Tom Orlik, “When Will China Rule the World? Maybe Never,” Bloomberg, July 5, 2021, https://www.bloomberg.com/news/features/2021-07-05/when-will-china-s-economy-beat-the-u-s-to-become-no-1-why-it-may-never-happen; World Bank, “GDP (Current US$) - United States, China, Japan,” https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?locations=US-CN-JP; and Marc Trachtenberg, “Assessing Soviet Economic Performance During the Cold War: A Failure of Intelligence?,” Texas National Security Review 1, no. 2 (2018), https://tnsr.org/2018/02/assessing-soviet-economic-performance-cold-war/.
10 “Population Total - China, Japan, United States,” World Bank, https://data.worldbank.org/indicator/SP.POP.TOTL?locations=CN-JP-US; and Murray Feshbach, “The Soviet Union: Population Trends and Dilemmas,” Population Bulletin 37, no. 3 (1982), https://pubmed.ncbi.nlm.nih.gov/12264357/.
11 Ellen Terrell, “When a Quote Is Not (Exactly) a Quote: General Motors,” Inside Adams (blog), Library of Congress, April 22, 2016, https://blogs.loc.gov/inside_adams/2016/04/when-a-quote-is-not-exactly-a-quote-general-motors/.
12 John Chipman, “Why Your Company Needs a Foreign Policy,” Harvard Business Review, September 2016, https://hbr.org/2016/09/why-your-company-needs-a-foreign-policy.
13 Jon Bateman, “National Security in an Age of Insurrection,” Carnegie Endowment for International Peace, January 14, 2021, https://carnegieendowment.org/2021/01/14/national-security-in-age-of-insurrection-pub-83635.
14 David Forscey, Jon Bateman, Nick Beecroft, and Beau Woods, “Systemic Cyber Risk: A Primer,” Carnegie Endowment for International Peace and Aspen Institute, March 7, 2022, https://carnegieendowment.org/2022/03/07/systemic-cyber-risk-primer-pub-86531.
15 Raj Varadarajan et al., “What’s at Stake If the US and China Really Decouple,” Boston Consulting Group, October 20, 2020, https://www.bcg.com/fr-ca/publications/2020/high-stakes-of-decoupling-us-and-china.
16 This primer is necessarily a snapshot in time, accurate as of March 27, 2022, unless stated otherwise. The U.S. government debuts new policy actions targeting Chinese technology on an almost weekly basis.
17 Federal regulations reveal some basic outlines of licensing policy, such as 15 C.F.R. § 742 for the CCL. However, they leave substantial room for interpretation.
18 50 U.S.C. § 4811.
19 50 U.S.C. § 4811(3).
20 Ian F. Fergusson and Karen M. Sutter, “U.S. Export Control Reforms and China: Issues for Congress,” Congressional Research Service, January 15, 2021, https://sgp.fas.org/crs/natsec/IF11627.pdf.
21 22 C.F.R. § 121.1.
22 “International Traffic in Arms Regulations: U.S. Munitions List Categories I, II, and III,” State Department, 85 Fed. Reg. 3819, (March 9, 2020), https://www.federalregister.gov/documents/2020/01/23/2020-00574/international-traffic-in-arms-regulations-us-munitions-list-categories-i-ii-and-iii.
23 “International Traffic in Arms Regulations: U.S. Munitions List Categories I, II, and III,” State Department, 85 Fed. Reg. 3819, (March 9, 2020), https://www.federalregister.gov/documents/2020/01/23/2020-00574/international-traffic-in-arms-regulations-us-munitions-list-categories-i-ii-and-iii.
24 22 C.F.R. § 126.1(d)(1).
25 “2021 Hong Kong Policy Act Report,” State Department, March 31, 2021, https://www.state.gov/2021-hong-kong-policy-act-report/.
26 15 C.F.R. § 730.3.
27 15 C.F.R. Supplement No. 1 to Part 738.
28 “Export Administration Regulations: Amendments to General Prohibition Three (Foreign-Produced Direct Product Rule) and the Entity List,” Commerce Department, 85 Fed. Reg. 29,849 (March 19, 2020), https://www.federalregister.gov/documents/2020/05/19/2020-10856/export-administration-regulations-amendments-to-general-prohibition-three-foreign-produced-direct.
29 “China - Country Commercial Guide - U.S. Export Controls,” U.S. International Trade Commission (USITC), September 14, 2021, https://www.trade.gov/knowledge-product/china-us-export-controls.
30 15 C.F.R. § 744.21; and John R. Shane and Lori E. Scheetz, “Commerce Department Further Restricts U.S. Exports to China, Russia, and Venezuela; Aims to Combat China’s Military-Civil Fusion Strategy,” Wiley, April 28, 2020, https://www.wiley.law/alert-Commerce-Department-Further-Restricts-U-S-Exports-to-China-Russia-and-Venezuela-Aims-to-Combat-China-s-Military-Civil-Fusion-Strategy.
31 Emphasis added. 15 C.F.R. § 744.21(g).
32 Sylwia A. Lis, Lise S. Test, and Maria Sergeyeva, “Commerce Tightens Restrictions on Technology Exports to Countries of Concern, in Particular China, Russia, and Venezuela,” Sanctions & Export Controls Update (blog), Baker McKenzie, April 30, 2020, https://sanctionsnews.bakermckenzie.com/commerce-tightens-restrictions-on-technology-exports-to-countries-of-concern-in-particular-china-russia-and-venezuela/.
33 “Military End User (MEU) List,” Commerce Department, https://www.bis.doc.gov/index.php/policy-guidance/lists-of-parties-of-concern/1770.
34 50 U.S.C. § 4817.
35 “Review of Controls for Certain Emerging Technologies,” Commerce Department, 83 Fed. Reg. 58,201 (November 19, 2018), https://www.federalregister.gov/documents/2018/11/19/2018-25221/review-of-controls-for-certain-emerging-technologies; and Emma Rafaelof, “Unfinished Business: Export Control and Foreign Investment Reforms,” U.S.-China Economic and Security Review Commission, June 1, 2021, https://www.uscc.gov/sites/default/files/2021-06/Unfinished_Business-Export_Control_and_Foreign_Investment_Reforms.pdf.
36 “New Controls on Emerging Technologies Released, While U.S. Commerce Department Comes Under Fire for Delay,” Gibson Dunn, October 27, 2020, https://www.gibsondunn.com/new-controls-on-emerging-technologies-released-while-us-commerce-department-comes-under-fire-for-delay/.
37 15 C.F.R. § 744.16.
38 15 C.F.R. § 734.3.
39 As of March 27, 2022, based on author’s analysis of the Commerce Department’s Entity List spreadsheet available at https://www.bis.doc.gov/index.php/documents/consolidated-entity-list/1072-el-2. These figures include both China and Hong Kong. They exclude all entries with exact duplicate names; however, they include entries for close variations of names, aliases, subsidiaries, and affiliates. Undated entries were assumed to predate 2018.
40 15 C.F.R. § 734.3(a).
41 15 C.F.R. § 734.4.
42 15 C.F.R. § 736.2(b)(3).
43 Charles L. Capito, Panagiotis C. Bayz, and Joseph A. Benkert, “The Commerce Department Modifies ‘Direct Product Rule’ to Restrict Transfers of More Foreign-Made Items to Huawei,” Morrison Foerster, May 28, 2020, https://www.mofo.com/resources/insights/200529-commerce-department-modifies.html.
44 “Addition of Huawei Non-U.S. Affiliates to the Entity List, the Removal of Temporary General License, and Amendments to General Prohibition Three (Foreign-Produced Direct Product Rule),” Commerce Department, 85 Fed. Reg. 51,596 (August 20, 2020), https://www.federalregister.gov/documents/2020/08/20/2020-18213/addition-of-huawei-non-us-affiliates-to-the-entity-list-the-removal-of-temporary-general-license-and; and “Export Administration Regulations: Amendments to General Prohibition Three (Foreign-Produced Direct Product Rule) and the Entity List,” Commerce Department, 85 Fed. Reg. 29,849 (May 15, 2020), https://www.federalregister.gov/documents/2020/05/19/2020-10856/export-administration-regulations-amendments-to-general-prohibition-three-foreign-produced-direct.
45 15 C.F.R. § 736.2(e); 15 C.F.R. Supplement No. 4 to Part 744, footnote 1; and “Commerce Addresses Huawei’s Efforts to Undermine Entity List, Restricts Products Designed and Produced With U.S. Technologies,” press release, Commerce Department, May 15, 2020, https://2017-2021.commerce.gov/news/press-releases/2020/05/commerce-addresses-huaweis-efforts-undermine-entity-list-restricts.html; Kay C. Georgi, Marwa M. Hassoun, Sylvia G. Costelloe, and Aman Kakar, “BIS Expands the Huawei Foreign Direct Product Rule to Capture a Wide Swath of COTS Products,” Arent Fox, August 19, 2020, https://www.arentfox.com/perspectives/alerts/bis-expands-the-huawei-foreign-direct-product-rule-capture-wide-swath-cots.
46 “Comments of the Semiconductor Industry Association (SIA) on Amendments to General Prohibition Three (Foreign-Produced Direct Product Rule) and the Entity List,” Semiconductor Industry Association, July 14, 2020, https://www.semiconductors.org/wp-content/uploads/2020/07/SIA-Comments-on-Foreign-Direct-Product-July-14-2020.pdf.
47 “Export Control Licensing Decisions for Huawei (November 9, 2020-April 20, 2021),” Commerce Department, https://gop-foreignaffairs.house.gov/wp-content/uploads/2021/10/Huawei-Licensing-Information.pdf.
48 “Addition of Huawei Non-U.S. Affiliates to the Entity List, the Removal of Temporary General License, and Amendments to General Prohibition Three (Foreign-Produced Direct Product Rule),” Commerce Department, 85 Fed. Reg. 51,596 (August 20, 2020), https://www.federalregister.gov/documents/2020/08/20/2020-18213/addition-of-huawei-non-us-affiliates-to-the-entity-list-the-removal-of-temporary-general-license-and.
49 Evan Burke, “Trump-Era Policies Toward Chinese STEM Talent: A Need for Better Balance,” Carnegie Endowment for International Peace, March 25, 2021, https://carnegieendowment.org/2021/03/25/trump-era-policies-toward-chinese-stem-talent-need-for-better-balance-pub-84137.
50 Evan Burke, “Trump-Era Policies Toward Chinese STEM Talent: A Need for Better Balance,” Carnegie Endowment for International Peace, March 25, 2021, https://carnegieendowment.org/2021/03/25/trump-era-policies-toward-chinese-stem-talent-need-for-better-balance-pub-84137.
51 “2019 Statistical Analysis of BIS Licensing Deemed Export 2015-2019,” Commerce Department, April 25, 2020, https://www.bis.doc.gov/index.php/country-papers/2648-2019-statistical-aalysis-of-bis-licensing-deemed-export-2015-2019/file.
52 What counts as an “American” or “foreign” investor or business is a complicated and increasingly contested legal question. For example, see Brandon L. Van Grack and James Brower, “CFIUS’s Expanding Jurisdiction in the Magnachip Acquisition,” Lawfare, October 11, 2021, https://www.lawfareblog.com/cfiuss-expanding-jurisdiction-magnachip-acquisition.
53 31 C.F.R. § 800.101, 800.601.
54 Farhad Jalinous, Karalyn Mildorf, Keith Schomig, and Ata Akiner, “CFIUS Finalizes New FIRRMA Regulations,” White & Case, https://www.whitecase.com/publications/alert/cfius-finalizes-new-firrma-regulations.
55 David Mortlock, Noman Goheer, and Ahmad El-Gamal, “Expanded CFIUS Jurisdiction Under FIRRMA Regulations: An Overview,” Wilkie Farr & Gallagher, May 19, 2020, https://www.willkie.com/-/media/files/publications/2020/05/expandedcfiusjurisdictionunderfirrmaregulations.pdf.
56 James K. Jackson and Cathleen D. Cimino-Isaacs, “CFIUS Reform Under FIRRMA,” Congressional Research Service, February 21, 2020, https://sgp.fas.org/crs/natsec/IF10952.pdf.
57 “Annual Report to Congress for CY 2020,” Committee on Foreign Investment in the United States (CFIUS), July 2021, https://home.treasury.gov/system/files/206/CFIUS-Public-Annual-Report-CY-2020.pdf.
58 Harry Clark, Gregory Hume, and Jeanine McGuinness, “President Trump Orders Divestment of U.S. Company; CFIUS Clears Semiconductor Transaction,” JD Supra, March 16, 2020, https://www.jdsupra.com/legalnews/president-trump-orders-divestment-of-u-12562/.
59 “Statement by Secretary Steven T. Mnuchin on the President’s Decision Regarding the Acquisition by ByteDance Ltd. of the U.S. Business of musical.ly,” Treasury Department, August 14, 2020, https://home.treasury.gov/news/press-releases/sm1094.
60 Greg Roumeliotis, “U.S. Blocks MoneyGram Sale to China’s Ant Financial on National Security Concerns, Reuters, January 2, 2018, https://www.reuters.com/article/us-moneygram-intl-m-a-ant-financial/u-s-blocks-moneygram-sale-to-chinas-ant-financial-on-national-security-concerns-idUSKBN1ER1R7.
61 “Annual Report to Congress for CY 2020,” CFIUS, July 2021, https://home.treasury.gov/system/files/206/CFIUS-Public-Annual-Report-CY-2020.pdf; and “Annual Report to Congress for CY 2019,” CFIUS, July 2020, https://home.treasury.gov/system/files/206/CFIUS-Public-Annual-Report-CY-2019.pdf.
62 Thilo Hanemann, Daniel H. Rosen, Mark Witzke, Steve Bennion, and Emma Smith, “Two-Way Street: 2021 Update US-China Investment Trends,” Rhodium Group, May 2021, https://rhg.com/wp-content/uploads/2021/05/RHG_TWS-2021_Full-Report_Final.pdf; and Andres B. Schwarzenberg and Karen M. Sutter, “U.S.-China Investment Ties: Overview,” Congressional Research Service, January 15, 2021, https://sgp.fas.org/crs/row/IF11283.pdf.
63 Jake Sullivan, “Remarks by National Security Advisor Jake Sullivan at the National Security Commission on Artificial Intelligence Global Emerging Technology Summit,” White House, July 13, 2021, https://www.whitehouse.gov/nsc/briefing-room/2021/07/13/remarks-by-national-security-advisor-jake-sullivan-at-the-national-security-commission-on-artificial-intelligence-global-emerging-technology-summit/; Thilo Hanemann et al., “An Outbound Investment Screening Regime for the United States?,” Rhodium Group, January 2022, https://rhg.com/wp-content/uploads/2022/01/RHG_TWS_2022_US-Outbound-Investment.pdf; and Sarah Bauerle-Danzman, “Is the US Going to Screen Outbound Investment?,” Atlantic Council, January 10, 2022, https://www.atlanticcouncil.org/blogs/econographics/is-the-us-going-to-screen-outbound-investment/.
64 Executive Order 14032, “Addressing the Threat From Securities Investments That Finance Certain Companies of the People’s Republic of China,” June 3, 2021, https://www.federalregister.gov/documents/2021/06/07/2021-12019/addressing-the-threat-from-securities-investments-that-finance-certain-companies-of-the-peoples.
65 As of March 27, 2022, based on author’s analysis of the Treasury Department’s Sanctions List Search and Consolidated Sanctions List (Non-SDN Lists) spreadsheet (primary names) available at https://sanctionssearch.ofac.treas.gov/ and https://home.treasury.gov/policy-issues/financial-sanctions/consolidated-sanctions-list-non-sdn-lists. This figure includes some duplication for companies listed two or more times under aliases or closely related entities.
66 “President Biden Revamps Communist Chinese Military Companies (CCMC) Sanctions Program,” Paul, Weiss, June 7, 2021, https://www.paulweiss.com/practices/litigation/economic-sanctions-aml/publications/president-biden-revamps-communist-chinese-military-companies-ccmc-sanctions-program?id=40293.
67 Holding Foreign Companies Accountable Act, Public Law No. 116-222 (2020), https://www.govinfo.gov/content/pkg/PLAW-116publ222/pdf/PLAW-116publ222.pdf.
68 “Rule Governing Board Determinations Under the Holding Foreign Companies Accountable Act,” Public Company Accounting Oversight Board (PCAOB), September 22, 2021, https://pcaob-assets.azureedge.net/pcaob-dev/docs/default-source/rulemaking/docket048/2021-004-hfcaa-adopting-release.pdf?sfvrsn=f6dfb7f8_4.
69 As of March 27, 2022, 225 China- and Hong Kong-based companies had filed audit reports in the last year, according to PCAOB: “Audit Reports Issued by PCAOB-Registered Firms Located Where Authorities Deny Access to Conduct Inspections,” PCAOB, https://pcaobus.org/oversight/international/denied-access-to-inspections. See also “Chinese Companies Listed on Major U.S. Stock Exchanges,” U.S.-China Economic and Security Review Commission, May 5, 2021, https://www.uscc.gov/sites/default/files/2021-05/Chinese_Companies_on_US_Stock_Exchanges_5-2021.pdf. The SEC estimated that about 10 percent of companies affected by the new law would have over-the-counter or unlisted securities. “Holding Foreign Companies Accountable Act Disclosure,” SEC, 86 Fed. Reg. 70,027 (December 9, 2021), https://www.federalregister.gov/documents/2021/12/09/2021-26528/holding-foreign-companies-accountable-act-disclosure.
70 Robert Schmidt and Benjamin Bain, “SEC Chief Warns ‘Clock Is Ticking’ on Delisting Chinese Stocks,” Bloomberg, August 25, 2021, https://www.bloomberg.com/news/articles/2021-08-25/sec-chief-warns-clock-is-ticking-on-delisting-chinese-stocks?sref=QmOxnLFz.
71 Senator John Kennedy, “Senate Passes Kennedy Bill to Strengthen America’s Protection Against Fraudulent Foreign Companies,” press release, June 22, 2021, https://www.kennedy.senate.gov/public/2021/6/senate-passes-kennedy-bill-to-strengthen-america-s-protection-against-fraudulent-foreign-companies; and H.R. 4521, The America COMPETES Act of 2022, § 60301, https://rules.house.gov/sites/democrats.rules.house.gov/files/BILLS-117HR4521RH-RCP117-31.pdf.
72 47 U.S.C. § 214; and 47 C.F.R. § 63.18.
73 “Order on Revocation of China Unicom Americas’ Sec. 214 Authority,” Federal Communications Commission (FCC), March 17, 2021, https://www.fcc.gov/document/order-revocation-china-unicom-americas-sec-214-authority.
74 47 U.S.C. §§ 34-35; and Executive Order 10530, “Providing for the Performance of Certain Functions Vested in or Subject to the Approval of the President,” 19 Fed. Reg. 2,709 (May 10, 1954), https://www.archives.gov/federal-register/codification/executive-order/10530.html.
75 “Order on Revocation of China Unicom Americas’ Sec. 214 Authority,” FCC, March 17, 2021, https://www.fcc.gov/document/order-revocation-china-unicom-americas-sec-214-authority; and “Order on Revocation/Termination: Pacific Networks/ComNet 214 Authority,” FCC, March 17, 2021, https://docs.fcc.gov/public/attachments/FCC-21-38A1.pdf.
76 Executive Order 13913, “Establishing the Committee for the Assessment of Foreign Participation in the United States Telecommunications Services Sector,” April 4, 2020, https://www.federalregister.gov/documents/2020/04/08/2020-07530/establishing-the-committee-for-the-assessment-of-foreign-participation-in-the-united-states; and “The Committee for the Assessment of Foreign Participation in the United States Telecommunications Services Sector – Frequently Asked Questions,” Justice Department, December 7, 2021, https://www.justice.gov/nsd/committee-assessment-foreign-participation-united-states-telecommunications-services-sector.
77 “FCC Denies China Mobile Telecom Services Application,” FCC, May 9, 2019, https://www.fcc.gov/document/fcc-denies-china-mobile-telecom-services-application-0. For an overview, see Adam Chan, “CFIUS, Team Telecom and China,” Lawfare, September 28, 2021, https://www.lawfareblog.com/cfius-team-telecom-and-china.
78 “FCC Denies China Mobile Telecom Services Application,” FCC, May 9, 2019, https://www.fcc.gov/document/fcc-denies-china-mobile-telecom-services-application-0; “China Telecom Americas Order on Revocation and Termination,” FCC, October 26, 2021, https://www.fcc.gov/document/china-telecom-americas-order-revocation-and-termination; “FCC Revokes China Unicom Americas’ Telecom Services Authority,” press release, FCC, January 27, 2022, https://www.fcc.gov/document/fcc-revokes-china-unicom-americas-telecom-services-authority; and “FCC Revokes Pacific Networks’ & ComNet’s Telecom Service Authority,” press release, FCC, March 16, 2022, https://www.fcc.gov/document/fcc-revokes-pacific-networks-comnets-telecom-service-authority.
79 “Team Telecom Recommends That the FCC Deny Pacific Light Cable Network System’s Hong Kong Undersea Cable Connection to the United States,” press release, Justice Department, June 17, 2020, https://www.justice.gov/opa/pr/team-telecom-recommends-fcc-deny-pacific-light-cable-network-system-s-hong-kong-undersea.
80 Daphne Leprince-Ringuet, “Facebook and Google Drop Plans for Underwater Cable to Hong Kong After Security Warnings,” ZDNet, September 1, 2020, https://www.zdnet.com/article/facebook-and-google-drop-plans-for-underwater-cable-to-hong-kong-after-security-warnings/; and Adam Chan, “CFIUS, Team Telecom and China,” Lawfare, September 28, 2021, https://www.lawfareblog.com/cfius-team-telecom-and-china.
81 “Equipment Authorization – RF Device,” FCC, https://www.fcc.gov/oet/ea/rfdevice.
82 Joel Griffin, “FCC Moves One Step Closer to Banning Hikvision, Dahua Products,” SecurityInfoWatch.com, June 17, 2021, https://www.securityinfowatch.com/video-surveillance/article/21227289/fcc-moves-one-step-closer-to-banning-hikvision-dahua-products.
83 Joel Griffin, “FCC Moves One Step Closer to Banning Hikvision, Dahua Products,” SecurityInfoWatch.com, June 17, 2021, https://www.securityinfowatch.com/video-surveillance/article/21227289/fcc-moves-one-step-closer-to-banning-hikvision-dahua-products; and “Notice of Proposed Rulemaking and Notice of Inquiry, Protecting Against National Security Threats to the Communications Supply Chain Through the Equipment Authorization Program; Protecting Against National Security Threats to the Communications Supply Chain through the Competitive Bidding Program,” FCC, ET Docket Nos. 21-232 and 21-233, https://docs.fcc.gov/public/attachments/DOC-372818A1.pdf.
84 47 U.S.C. § 302a; and 47 C.F.R. § 2.915.
85 “List of Equipment and Services Covered By Section 2 of The Secure Networks Act,” FCC, https://www.fcc.gov/supplychain/coveredlist.
86 47 U.S.C. § 1601(c); and John S. McCain National Defense Authorization Act for Fiscal Year 2019, Public Law No. 115-232, § 889(f)(3)(A-B).
87 Secure Equipment Act of 2021, Public Law No. 117-55.
88 “List of Equipment and Services Covered By Section 2 of The Secure Networks Act,” FCC, https://www.fcc.gov/supplychain/coveredlist.
89 “Citing National Security Risks, Carr Calls for Starting Process of Adding DJI—a Chinese Drone Company—to FCC’s Covered List,” press release, FCC Commissioner Brendan Carr, October 19, 2021, https://www.fcc.gov/document/carr-calls-review-dji-citing-national-security-risks.
90 8 U.S.C. § 1182(a)(3)(C).
91 “U.S. Imposes Visa Restrictions on Certain Employees of Chinese Technology Companies That Abuse Human Rights,” State Department, July 15, 2020, https://2017-2021.state.gov/u-s-imposes-visa-restrictions-on-certain-employees-of-chinese-technology-companies-that-abuse-human-rights/index.html.
92 8 U.S.C. § 1182(f).
93 Ben Harrington and Theresa A. Reiss, “Presidential Actions to Exclude Aliens Under INA § 212(f),” Congressional Research Service, May 4, 2020, https://crsreports.congress.gov/product/pdf/LSB/LSB10458.
94 Proclamation 10043, “Suspension of Entry as Nonimmigrants of Certain Students and Researchers From the People’s Republic of China,” May 29, 2020, https://www.federalregister.gov/documents/2020/06/04/2020-12217/suspension-of-entry-as-nonimmigrants-of-certain-students-and-researchers-from-the-peoples-republic.
95 Humeyra Pamuk, “U.S. Revokes More Than 1,000 Visas of Chinese Nationals, Citing Military Links,” Reuters, September 9, 2020, https://www.reuters.com/article/us-usa-china-visas-students/u-s-revokes-more-than-1000-visas-of-chinese-nationals-citing-military-links-idUSKBN26039D; and Stuart Anderson, “Biden Keeps Costly Trump Visa Policy Denying Chinese Grad Students,” Forbes, August 10, 2021, https://www.forbes.com/sites/stuartanderson/2021/08/10/biden-keeps-costly-trump-visa-policy-denying-chinese-grad-students/.
96 Remco Zwetsloot, Emily Weinstein, and Ryan Fedasiuk, “Assessing the Scope of U.S. Visa Restrictions on Chinese Students,” Center for Security and Emerging Technology, February 2021, https://cset.georgetown.edu/publication/assessing-the-scope-of-u-s-visa-restrictions-on-chinese-students/.
97 For an overview, see Evan Burke, “Trump-Era Policies Toward Chinese STEM Talent: A Need for Better Balance,” Carnegie Endowment for International Peace, March 25, 2021, https://carnegieendowment.org/2021/03/25/trump-era-policies-toward-chinese-stem-talent-need-for-better-balance-pub-84137; and Evan Burke, “The Right Way to Bring Chinese STEM Talent Back to the U.S.,” ChinaFile, April 27, 2021, https://www.chinafile.com/reporting-opinion/viewpoint/right-way-bring-chinese-stem-talent-back-us.
98 “Establishing a Fixed Time Period of Admission and an Extension of Stay Procedure for Nonimmigrant Academic Students, Exchange Visitors, and Representatives of Foreign Information Media,” Department of Homeland Security, 85 Fed. Reg. 60,526 (September 25, 2020), https://www.federalregister.gov/documents/2020/09/25/2020-20845/establishing-a-fixed-time-period-of-admission-and-an-extension-of-stay-procedure-for-nonimmigrant.
99 “Strengthening Wage Protections for the Temporary and Permanent Employment of Certain Aliens in the United States,” Department of Labor, 86 Fed. Reg. 3,608 (January 14, 2021), https://www.federalregister.gov/documents/2021/01/14/2021-00218/strengthening-wage-protections-for-the-temporary-and-permanent-employment-of-certain-aliens-in-the.
100 Proclamation 10052, “Suspension of Entry of Immigrants and Nonimmigrants Who Present a Risk to the United States Labor Market During the Economic Recovery Following the 2019 Novel Coronavirus Outbreak,” 85 Fed. Reg. 38,263 (June 22, 2020), https://www.federalregister.gov/documents/2020/06/25/2020-13888/suspension-of-entry-of-immigrants-and-nonimmigrants-who-present-a-risk-to-the-united-states-labor.
101 Evan Burke, “Trump-Era Policies Toward Chinese STEM Talent: A Need for Better Balance,” Carnegie Endowment for International Peace, March 25, 2021, https://carnegieendowment.org/2021/03/25/trump-era-policies-toward-chinese-stem-talent-need-for-better-balance-pub-84137.
102 “Establishing a Fixed Time Period of Admission and an Extension of Stay Procedure for Nonimmigrant Academic Students, Exchange Visitors, and Representatives of Foreign Information Media,” Department of Homeland Security, 86 Fed. Reg. 35,410 (July 6, 2021), https://www.federalregister.gov/documents/2021/07/06/2021-13929/establishing-a-fixed-time-period-of-admission-and-an-extension-of-stay-procedure-for-nonimmigrant; “Biden Admin Proposes 18-Month Delay in Calculating Prevailing Wages of H-1B, Other Visas,” Economic Times, March 24, 2021, https://economictimes.indiatimes.com/nri/work/biden-admin-proposes-18-month-delay-in-calculating-prevailing-wages-of-h-1b-and-other-visas/articleshow/81646252.cms; and “Biden Lets Trump Era H-1B Visa Bans Expire; Indian IT Professionals to Benefit,” Economic Times, April 1, 2021, https://economictimes.indiatimes.com/nri/work/biden-lets-trump-era-h-1b-visa-bans-expire-indian-it-professionals-to-benefit/articleshow/81813752.cms.
103 Abby Lemert and Eleanor Runde, “New U.S. Visa Rules Prompt Scrutiny of CCP Members,” Lawfare, December 11, 2020, https://www.lawfareblog.com/new-us-visa-rules-prompt-scrutiny-ccp-members.
104 Chad P. Bown and Cathleen Cimino-Isaacs, “Will Trump Invoke National Security to Start a Trade War?,” Peterson Institute for International Economics (PIIE), July 5, 2017, https://www.piie.com/blogs/trade-investment-policy-watch/will-trump-invoke-national-security-start-trade-war.
105 19 U.S.C. § 1673.
106 19 U.S.C. § 1671.
107 Chad P. Bown, “Steel, Aluminum, Lumber, Solar: Trump’s Stealth Trade Protection,” PIIE, June 2017, https://www.piie.com/system/files/documents/pb17-21.pdf.
108 “Understanding Antidumping & Countervailing Duty Investigations,” USITC, https://www.usitc.gov/press_room/usad.htm.
109 19 U.S.C. §§ 1671, 1673.
110 19 U.S.C. § 1337. For a discussion of how Section 337 relates to China, see Yiqing Yin, “Section 337 of the Tariff Act of 1930 and Its Impacts on China,” Catholic University Journal of Law and Technology 25, no. 2 (2017), https://scholarship.law.edu/cgi/viewcontent.cgi?article=1038&;context=jlt.
111 “Certain Two-Way Radio Equipment and Systems, Related Software and Components Thereof; Commission Decision to Affirm-in-Part, Modify-in-Part, Reverse-in-Part, and Strike Certain Portions of a Final Initial Determination Finding a Violation of Section 337; Issuance of Limited Exclusion Order and Cease and Desist Orders; and Termination of the Investigation,” USITC, 83 Fed. Reg. 59,415 (November 23, 2018), https://www.federalregister.gov/documents/2018/11/23/2018-25463/certain-two-way-radio-equipment-and-systems-related-software-and-components-thereof-commission.
112 “Federal Indictment Charges PRC-Based Telecommunications Company With Conspiring With Former Motorola Solutions Employees to Steal Technology,” press release, Justice Department, February 7, 2022, https://www.justice.gov/opa/pr/federal-indictment-charges-prc-based-telecommunications-company-conspiring-former-motorola.
113 “Certain Unmanned Aerial Vehicles and Components Thereof; Final Determination Finding a Violation of Section 337 and Issuance of Remedial Orders; Suspension of Enforcement of the Remedial Orders Pending Final Resolution of a Final Written Decision by the Patent Trial and Appeal Board; and Termination of the Investigation,” USITC, 85 Fed. Reg. 52,640 (August 26, 2020), https://www.federalregister.gov/documents/2020/08/26/2020-18695/certain-unmanned-aerial-vehicles-and-components-thereof-final-determination-finding-a-violation-of.
114 Qingyu Yin et al., “Latest Development in the DJI-Autel Disputes,” Finnegan, August 24, 2020, https://www.finnegan.com/en/insights/ip-updates/latest-development-in-the-dji-autel-disputes.html; “Certain Unmanned Aerial Vehicles and Components Thereof; Commission Determination to Institute a Rescission Proceeding and Rescind Permanently a Limited Exclusion Order and Cease and Desist Orders; Termination of Rescission Proceeding,” USITC, 86 Fed. Reg. 51,676 (August 16, 2021), https://www.federalregister.gov/documents/2021/09/16/2021-19977/certain-unmanned-aerial-vehicles-and-components-thereof-commission-determination-to-institute-a; and Ishveena Singh, “DJI, Autel Settle Years-Long Patent Dispute Days Before Jury Trial,” DroneDJ, August 19, 2021, https://dronedj.com/2021/08/19/dji-autel-settle-years-long-patent-dispute-days-before-jury-trial/.
115 “Anti-dumping, Subsidies, Safeguards: Contingencies, Etc.,” World Trade Organization (WTO), https://www.wto.org/english/thewto_e/whatis_e/tif_e/agrm8_e.htm; and Chad P. Bown, “Steel, Aluminum, Lumber, Solar: Trump’s Stealth Trade Protection,” PIIE, June 2017, https://www.piie.com/system/files/documents/pb17-21.pdf.
116 “DS186: United States — Section 337 of the Tariff Act of 1930 and Amendments Thereto,” WTO, https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds186_e.htm; and Joel W. Rogers and Joseph P. Whitlock, “Is Section 337 Consistent With the GATT and the TRIPs Agreement?,” American University International Law Review 17, no. 3 (2002), https://digitalcommons.wcl.american.edu/cgi/viewcontent.cgi?article=1220&;context=auilr.
117 For a general overview, see Brock R. Williams et al., “Trump Administration Tariff Actions: Frequently Asked Questions,” Congressional Research Service, December 15, 2020, https://crsreports.congress.gov/product/pdf/R/R45529; and Chad P. Bown and Melina Kolb, “Trump’s Trade War Timeline: An Up-to-Date Guide,” PIIE, October 31, 2021, https://www.piie.com/sites/default/files/documents/trump-trade-war-timeline.pdf.
118 Another example is Section 201 of the Trade Act of 1974, which authorizes the ITC to investigate surges of foreign imports in “such increased quantities” that are or threaten to become “a substantial cause of serious injury” to U.S. industry. (The import surge need not be unfair in any way.) A USITC finding then allows the President to impose temporary “global safeguards,” such as tariffs or other import restrictions, on the imported item from all countries. Trump instituted safeguards for solar panels and washing machines, following the first new investigations under this authority since 2001. 19 U.S.C. § 2251; “Understanding Safeguard Investigations,” USITC, https://www.usitc.gov/press_room/us_safeguard.htm; “President Trump Approves Relief for U.S. Washing Machine and Solar Cell Manufacturers,” press release, U.S. Trade Representative (USTR), January 22, 2018, https://ustr.gov/about-us/policy-offices/press-office/press-releases/2018/january/president-trump-approves-relief-us; and Chad P. Bown and Junie Joseph, “Solar and Washing Machine Safeguards in Context: The History of US Section 201 Use,” PIIE, October 31, 2017, https://www.piie.com/blogs/trade-and-investment-policy-watch/solar-and-washing-machine-safeguards-context-history-us.
119 19 U.S.C. § 2411.
120 19 U.S.C. § 2411(c)(3)(B).
121 “Addressing China’s Laws, Policies, Practices, and Actions Related to Intellectual Property, Innovation, and Technology,” Presidential Memorandum for the USTR, 82 Fed. Reg. 39,007 (August 14, 2017), https://trumpwhitehouse.archives.gov/presidential-actions/presidential-memorandum-united-states-trade-representative/.
122 “Findings of the Investigation Into China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation Under Section 301 of the Trade Act of 1974,” USTR, March 22, 2018, https://ustr.gov/sites/default/files/Section%20301%20FINAL.PDF.
123 Chad P. Bown and Melina Kolb, “Trump’s Trade War Timeline: An Up-to-Date Guide,” PIIE, October 31, 2021, https://www.piie.com/sites/default/files/documents/trump-trade-war-timeline.pdf; Chad P. Bown, “US-China Trade War Tariffs: An Up-to-Date Chart,” PIIE, March 16, 2021, https://www.piie.com/research/piie-charts/us-china-trade-war-tariffs-date-chart; and Andres B. Schwarzenberg, “Section 301 of the Trade Act of 1974: Origin, Evolution, and Use,” Congressional Research Service, December 14, 2020, https://sgp.fas.org/crs/misc/R46604.pdf.
124 “USTR Issues Tariffs on Chinese Products in Response to Unfair Trade Practices,” press release, USTR, June 15, 2018, https://ustr.gov/about-us/policy-offices/press-office/press-releases/2018/june/ustr-issues-tariffs-chinese-products; USTR, “USTR Finalizes Tariffs on $200 Billion of Chinese Imports in Response to China’s Unfair Trade Practices,” September 18, 2018, https://ustr.gov/about-us/policy-offices/press-office/press-releases/2018/september/ustr-finalizes-tariffs-200; and Brock R. Williams et al., “Trump Administration Tariff Actions: Frequently Asked Questions,” Congressional Research Service, December 15, 2020, https://crsreports.congress.gov/product/pdf/R/R45529.
125 Andres B. Schwarzenberg, “Section 301 of the Trade Act of 1974: Origin, Evolution, and Use,” Congressional Research Service, December 14, 2020, https://sgp.fas.org/crs/misc/R46604.pdf; and Brock R. Williams et al., “Trump Administration Tariff Actions: Frequently Asked Questions,” Congressional Research Service, December 15, 2020, https://crsreports.congress.gov/product/pdf/R/R45529.
126 Joseph L. Barloon et al., “USTR Relaunches Exclusion Process for China Section 301 Tariffs,” Skadden, Arps, Slate, Meagher & Flom, October 12, 2021 https://www.skadden.com/insights/publications/2021/10/ustr-relaunches-exclusion-process.
127 Chad P. Bown and Cathleen Cimino-Isaacs, “Will Trump Invoke National Security to Start a Trade War?,” PIIE, July 5, 2017, https://www.piie.com/blogs/trade-investment-policy-watch/will-trump-invoke-national-security-start-trade-war.
128 19 U.S.C. § 1862.
129 19 U.S.C. § 1862(d).
130 Chad P. Bown and Melina Kolb, “Trump’s Trade War Timeline: An Up-to-Date Guide,” PIIE, October 31, 2021, https://www.piie.com/sites/default/files/documents/trump-trade-war-timeline.pdf.
131 Chad P. Bown, “Trump’s Long-awaited Steel and Aluminum Tariffs Are Just the Beginning,” PIIE, March 26, 2018, https://www.piie.com/blogs/trade-and-investment-policy-watch/trumps-long-awaited-steel-and-aluminum-tariffs-are-just; and Chad P. Bown and Melina Kolb, “Trump’s Trade War Timeline: An Up-to-Date Guide,” PIIE, October 31, 2021, https://www.piie.com/sites/default/files/documents/trump-trade-war-timeline.pdf.
132 19 U.S.C. § 1307.
133 “Withhold Release Orders and Findings List,” Customs and Border Protection (CBP), https://www.cbp.gov/trade/forced-labor/withhold-release-orders-and-findings.
134 “DHS Cracks Down on Goods Produced by China’s State-Sponsored Forced Labor,” press release, CBP, September 14, 2020, https://www.cbp.gov/newsroom/national-media-release/dhs-cracks-down-goods-produced-china-s-state-sponsored-forced-labor; and “The Department of Homeland Security Issues Withhold Release Order on Silica-Based Products Made by Forced Labor in Xinjiang,” press release, CBP, June 24, 2021, https://www.cbp.gov/newsroom/national-media-release/department-homeland-security-issues-withhold-release-order-silica.
135 Uyghur Forced Labor Prevention Act of 2021, Public Law No. 117-78, § 3, https://www.govinfo.gov/content/pkg/PLAW-117publ78/pdf/PLAW-117publ78.pdf.
136 “Sanctions Programs and Country Information,” Treasury Department, https://home.treasury.gov/policy-issues/financial-sanctions/sanctions-programs-and-country-information.
137 “Reference Sheet on Economic Sanctions,” Brookings Institution, December 2020, https://www.brookings.edu/wp-content/uploads/2020/12/ReferenceSheet_EconomicSanctions.pdf.
138 50 U.S.C. § 1701.
139 50 U.S.C. § 1701, 1702.
140 As of March 11, 2022. “Declared National Emergencies Under the National Emergencies Act,” Brennan Center, December 15, 2021, https://www.brennancenter.org/our-work/research-reports/declared-national-emergencies-under-national-emergencies-act.
141 50 U.S.C. §§ 1601-1651.
142 “Reference Sheet on Economic Sanctions,” Brookings Institution, December 2020, https://www.brookings.edu/wp-content/uploads/2020/12/ReferenceSheet_EconomicSanctions.pdf.
143 As of March 27, 2022, based on author’s analysis of the Treasury Department’s Sanctions List Search and SDN spreadsheet, available at https://sanctionssearch.ofac.treas.gov/ and https://home.treasury.gov/policy-issues/financial-sanctions/specially-designated-nationals-list-data-formats-data-schemas (primary names). Figures exclude all entries with exact duplicate names; however, they may include entries for close variations of names, aliases, subsidiaries, and affiliates. “China” here refers to mainland China plus Hong Kong and Macau. China-based actors include some third-country entities that maintain a presence in China.
144 For the purpose of these figures, China-specific reasons refer to human rights abuses and corruption (Executive Order 13818) and Hong Kong repression (Executive Order 13936).
145 “Treasury Sanctions CEIEC for Supporting the Illegitimate Maduro Regime’s Efforts to Undermine Venezuelan Democracy,” Treasury Department, November 30, 2020, https://home.treasury.gov/news/press-releases/sm1194.
146 Executive Order 13818, “Blocking the Property of Persons Involved in Serious Human Rights Abuse or Corruption,” 82 Fed. Reg. 60,839 (December 20, 2017), https://www.federalregister.gov/documents/2017/12/26/2017-27925/blocking-the-property-of-persons-involved-in-serious-human-rights-abuse-or-corruption.
147 As of March 27, 2022, based on author’s analysis of the Treasury Department’s Sanctions List Search, available at https://sanctionssearch.ofac.treas.gov/. Figures include China, Hong Kong, and Macau-based actors, excluding duplicate entries associated with more than one of these jurisdictions. Rob Berschinski, “Trump Administration Notches a Serious Human Rights Win. No, really.” Just Security, January 10, 2018, https://www.justsecurity.org/50846/trump-administration-notches-human-rights-win-no-really/.
148 Uyghur Human Rights Policy Act of 2020, Public Law No. 116-145, § 6, https://www.govinfo.gov/content/pkg/PLAW-116publ145/pdf/PLAW-116publ145.pdf; and Uyghur Forced Labor Prevention Act of 2021, Public Law No. 117-78, § 5, https://www.govinfo.gov/content/pkg/PLAW-117publ78/pdf/PLAW-117publ78.pdf.
149 As of March 27, 2022, based on author’s analysis of the Treasury Department’s Sanctions List Search, available at https://sanctionssearch.ofac.treas.gov/. Executive Order 13936, “The President’s Executive Order on Hong Kong Normalization,” 85 Fed. Reg. 43,413 (July 14, 2020), https://www.federalregister.gov/documents/2020/07/17/2020-15646/the-presidents-executive-order-on-hong-kong-normalization.
150 S.1260, “United States Innovation and Competition Act of 2021,” §§ 3211, 5202, https://www.congress.gov/bill/117th-congress/senate-bill/1260/text.
151 S.1260, “United States Innovation and Competition Act of 2021,” §§ 5203-5204, https://www.congress.gov/bill/117th-congress/senate-bill/1260/text.
152 H.R. 4521, The America COMPETES Act of 2022, https://rules.house.gov/sites/democrats.rules.house.gov/files/BILLS-117HR4521RH-RCP117-31.pdf.
153 Executive Order 13942, “Addressing the Threat Posed by TikTok, and Taking Additional Steps to Address the National Emergency With Respect to the Information and Communications Technology and Services Supply Chain,” 85 Fed. Reg. 48,637 (August 6, 2020), https://www.federalregister.gov/documents/2020/08/11/2020-17699/addressing-the-threat-posed-by-tiktok-and-taking-additional-steps-to-address-the-national-emergency; and Executive Order 13943, “Addressing the Threat Posed by WeChat, and Taking Additional Steps to Address the National Emergency With Respect to the Information and Communications Technology and Services Supply Chain,” 85 Fed. Reg. 48,641 (August 6, 2020), https://www.federalregister.gov/documents/2020/08/11/2020-17700/addressing-the-threat-posed-by-wechat-and-taking-additional-steps-to-address-the-national-emergency.
154 Executive Order 13873, “Securing the Information and Communications Technology and Services Supply Chain,” 84 Fed. Reg. 22689 (May 15, 2019) https://www.federalregister.gov/documents/2019/05/17/2019-10538/securing-the-information-and-communications-technology-and-services-supply-chain.
155 “Identification of Prohibited Transactions to Implement Executive Order 13942 and Address the Threat Posed by TikTok and the National Emergency With Respect to the Information and Communications Technology and Services Supply Chain,” Commerce Department, 85 Fed. Reg. 60,061 (September 24, 2020), https://www.federalregister.gov/documents/2020/09/24/2020-21193/identification-of-prohibited-transactions-to-implement-executive-order-13942-and-address-the-threat.
156 Executive Order 13971, “Addressing the Threat Posed by Applications and Other Software Developed or Controlled by Chinese Companies,” 86 Fed. Reg. 1249 (January 5, 2021), https://www.federalregister.gov/documents/2021/01/08/2021-00305/addressing-the-threat-posed-by-applications-and-other-software-developed-or-controlled-by-chinese.
157 Robert Chesney, “TikTok, WeChat, and Biden’s New Executive Order: What You Need to Know,” Lawfare, June 9, 2021, https://www.lawfareblog.com/tiktok-wechat-and-bidens-new-executive-order-what-you-need-know.
158 Executive Order 13920, “Securing the United States Bulk-Power System,” 85 Fed. Reg. 26595 (May 1, 2020), https://www.federalregister.gov/documents/2020/05/04/2020-09695/securing-the-united-states-bulk-power-system.
159 Department of Energy, “Prohibition Order Securing Critical Defense Facilities,” 86 Fed. Reg. 533 (January 6, 2021), https://www.federalregister.gov/documents/2021/01/06/2020-28773/prohibition-order-securing-critical-defense-facilities.
160 “Notice of Request for Information (RFI) on Ensuring the Continued Security of the United States Critical Electric Infrastructure,” Department of Energy, 86 Fed. Reg. 21,309 (April 22, 2021), https://www.federalregister.gov/documents/2021/04/22/2021-08482/notice-of-request-for-information-rfi-on-ensuring-the-continued-security-of-the-united-states.
161 “Securing the Information and Communications Technology and Services Supply Chain,” Commerce Department, 86 Fed. Reg. 4909 (January 19, 2021), https://www.federalregister.gov/documents/2021/01/19/2021-01234/securing-the-information-and-communications-technology-and-services-supply-chain.
162 “Fact Sheet: Executive Order Protecting Americans’ Sensitive Data From Foreign Adversaries,” press release, White House, June 9, 2021, https://www.whitehouse.gov/briefing-room/statements-releases/2021/06/09/fact-sheet-executive-order-protecting-americans-sensitive-data-from-foreign-adversaries/; and Executive Order 14034, “Protecting Americans’ Sensitive Data From Foreign Adversaries,” 86 Fed. Reg. 31,423 (June 9, 2021), https://www.federalregister.gov/documents/2021/06/11/2021-12506/protecting-americans-sensitive-data-from-foreign-adversaries.
163 “U.S. Secretary of Commerce Gina Raimondo Statement on Actions Taken Under ICTS Supply Chain Executive Order,” press release, Commerce Department, March 17, 2021, https://www.commerce.gov/news/press-releases/2021/03/us-secretary-commerce-gina-raimondo-statement-actions-taken-under-icts; Alexandra Alper, “Exclusive: U.S. Examining Alibaba’s Cloud Unit for National Security Risks – Sources,” Reuters, January 19, 2022, https://www.reuters.com/technology/exclusive-us-examining-alibabas-cloud-unit-national-security-risks-sources-2022-01-18/; and Ben Brody, “A Secretive US Security Program Has Its Sights on DiDi,” Protocol, March 23, 2022, https://www.protocol.com/policy/didi-commerce-icts.
164 Haye Kesteloo, “Department of Defense Bans the Purchase of Commercial-Over-the-Shelf UAS, Including DJI Drones Effective Immediately,” DroneDJ, June 7, 2018, https://dronedj.com/2018/06/07/department-of-defense-bans-the-purchase-of-commercial-over-the-shelf-uas-including-dji-drones/; and National Defense Authorization Act for Fiscal Year 2020, Public Law No. 116-92, § 848, https://www.govinfo.gov/content/pkg/PLAW-116publ92/pdf/PLAW-116publ92.pdf.
165 “Secretary Bernhardt Signs Order Grounding Interior’s Drone Fleet for Non-Emergency Operations,” press release, Department of Interior, January 29, 2020, https://www.doi.gov/pressreleases/secretary-bernhardt-signs-order-grounding-interiors-drone-fleet-non-emergency.
166 Executive Order 13981, “Protecting the United States From Certain Unmanned Aircraft Systems,” 86 Fed. Reg. 6,821 (January 18, 2021), https://www.federalregister.gov/documents/2021/01/22/2021-01646/protecting-the-united-states-from-certain-unmanned-aircraft-systems.
167 John S. McCain National Defense Authorization Act for Fiscal Year 2019, Public Law No. 115-232, § 889(f)(3)(A-B).
168 John S. McCain National Defense Authorization Act for Fiscal Year 2019, Public Law No. 115-232, § 889(f)(3)(D).
169 Angela B. Styles, Scott M. Heimberg, Robert K. Huffman, and Chris Chamberlain, “Section 889(a)(1)(B): Five Things to Know About the Interim Rule and a Roadmap for Compliance,” Akin Gump, August 5, 2020, https://www.akingump.com/en/news-insights/section-889a1b-five-things-to-know-about-the-interim-rule-and-a-roadmap-for-compliance.html.
170 Author’s analysis of the Treasury Department’s Federal Contract Explorer spreadsheet, available at https://datalab.usaspending.gov/unstructured-data/contract-explorer/awards_contracts_FY18_v2.csv. This figure excludes all entries with exact duplicate names; however, they include entries for close variations of names, aliases, subsidiaries, and affiliates.
171 47 C.F.R. §§ 54.9–54.11; and “Protecting Against National Security Threats to the Communications Supply Chain Through FCC Programs,” FCC, 86 Fed. Reg. 46,995 (August 23, 2021), https://www.federalregister.gov/documents/2021/08/23/2021-17279/protecting-against-national-security-threats-to-the-communications-supply-chain-through-fcc-programs.
172 Matt Kapko, “Rural US Carriers Secure $1.9B to Rip Out Chinese Equipment,” SDxCentral, December 23, 2020, https://www.sdxcentral.com/articles/news/rural-us-carriers-secure-1-9b-to-rip-out-chinese-equipment/2020/12/; and Mike Dano, “Verizon, CenturyLink, Windstream Still Using Huawei, ZTE Equipment,” September 4, 2020, https://www.lightreading.com/security/verizon-centurylink-windstream-still-using-huawei-zte-equipment/d/d-id/763705.
173 As of December 1, 2021. Eileen Guo, Jess Aloe, and Karen Hao, “We Built a Database to Understand the China Initiative. Then the Government Changed Its Records.” MIT Technology Review, December 2, 2021, https://www.technologyreview.com/2021/12/02/1039397/china-initiative-database-doj/.
174 “Chinese Telecommunications Conglomerate Huawei and Subsidiaries Charged in Racketeering Conspiracy and Conspiracy to Steal Trade Secrets,” press release, Justice Department, February 13, 2020, https://www.justice.gov/opa/pr/chinese-telecommunications-conglomerate-huawei-and-subsidiaries-charged-racketeering.
175 “Information About the Department of Justice’s China Initiative and a Compilation of China-Related Prosecutions Since 2018,” Justice Department, November 19, 2021, https://www.justice.gov/nsd/information-about-department-justice-s-china-initiative-and-compilation-china-related.
176 “Chinese Telecommunications Conglomerate Huawei and Subsidiaries Charged in Racketeering Conspiracy and Conspiracy to Steal Trade Secrets,” press release, Justice Department, February 13, 2020, https://www.justice.gov/opa/pr/chinese-telecommunications-conglomerate-huawei-and-subsidiaries-charged-racketeering.
177 As of September 15, 2021. Ellen Nakashima and David Nakamura, “China Initiative Aims to Stop Economic Espionage. Is Targeting Academics Over Grant Fraud ‘Overkill’?,” Washington Post, September 15, 2021, https://www.washingtonpost.com/national-security/china-initiative-questions-dismissals/2021/09/15/530ef936-f482-11eb-9738-8395ec2a44e7_story.html.
178 Ellen Nakashima and David Nakamura, “U.S. Drops Cases Against Five Researchers Accused of Hiding Ties to Chinese Military,” Washington Post, July 23, 2021, https://www.washingtonpost.com/national-security/us-drops-cases-against-five-researchers-accused-of-hiding-ties-to-chinese-military/2021/07/23/54a8b268-ec04-11eb-8950-d73b3e93ff7f_story.html; and Elizabeth Redden, “A Retreat From China Collaborations in the Face of U.S. Scrutiny,” Inside Higher Ed, October 29, 2021, https://www.insidehighered.com/news/2021/10/29/survey-finds-chilling-effect-china-initiative.
179 George P. Varghese, Benjamin Conery, Hyun-Soo Lim, and Christina Luo, “DOJ’s ‘China Initiative’ Falters,” Wilmer Hale, August 5, 2021, https://www.wilmerhale.com/en/insights/client-alerts/20210805-dojs-china-initiative-falters.
180 Ellen Nakashima and David Nakamura, “U.S. Drops Cases Against Five Researchers Accused of Hiding Ties to Chinese Military,” Washington Post, July 23, 2021, https://www.washingtonpost.com/national-security/us-drops-cases-against-five-researchers-accused-of-hiding-ties-to-chinese-military/2021/07/23/54a8b268-ec04-11eb-8950-d73b3e93ff7f_story.html; Associated Press, “Tennessee Professor With Ties to China Acquitted by District Judge,” Washington Post, September 10, 2021, https://www.washingtonpost.com/national/tennessee-professor-with-ties-to-china-acquitted-by-district-judge/2021/09/10/30d32e74-0c64-11ec-aea1-42a8138f132a_story.html; and Ellen Barry and Katie Benner, “U.S. Drops Its Case Against M.I.T. Scientist Accused of Hiding China Links,” New York Times, January 20, 2022, https://www.nytimes.com/2022/01/20/science/gang-chen-mit-china-initiative.html.
181 “Harvard University Professor Convicted of Making False Statements and Tax Offenses,” press release, Justice Department, December 21, 2021, https://www.justice.gov/usao-ma/pr/harvard-university-professor-convicted-making-false-statements-and-tax-offenses.
182 Matthew Olsen, “Assistant Attorney General Matthew Olsen Delivers Remarks on Countering Nation-State Threats,” Justice Department, February 23, 2022, https://www.justice.gov/opa/speech/assistant-attorney-general-matthew-olsen-delivers-remarks-countering-nation-state-threats.
183 Matthew Olsen, “Assistant Attorney General Matthew Olsen Delivers Remarks on Countering Nation-State Threats,” Justice Department, February 23, 2022, https://www.justice.gov/opa/speech/assistant-attorney-general-matthew-olsen-delivers-remarks-countering-nation-state-threats.
184 The canvas is not entirely blank, as Congress has made it difficult for the executive branch to rescind certain China-tech restrictions. In this way, Congress is contributing to the risk (discussed later) of feedback loops that entrench and accelerate technological decoupling.
Choosing a Strategy
The dozens of new U.S. government technology controls aimed at China in recent years did not all have a single, unified objective. Some sought to counter national security threats, some were more economically motivated, and some had ancillary purposes (like domestic or diplomatic gamesmanship) unrelated to technology itself. Yet in public discourse, and even in policy circles, distinct objectives are often left undifferentiated or undefined. Too frequently, U.S. leaders and analysts speak of “countering” or “reining in” Chinese technology threats and risks—highly general formulations that elide key goals and trade-offs.
Untangling this jumble of U.S. objectives is an important first step in developing a coherent strategy. Table 5 describes nine apparent rationales for recent U.S. technology restrictions aimed at China.
The existence of so many distinct policy rationales is not surprising. The United States has many different concerns with China, and technology plays a significant part in nearly all of them. Technology is rightly at the heart of America’s China policies. (The corollary idea, that China should be at the heart of U.S. tech policy, is more debatable.) In many cases, these policy rationales overlap and reinforce each other. For example, potential Chinese influence over U.S. telecommunications networks raises multiple fears simultaneously: theft of commercial secrets, tracking of U.S. government officials, injection of disinformation, or subversion of critical infrastructure in a crisis, among other possibilities. Hence the U.S. telecommunications sector was an early target for American restrictive measures, and the global telecoms marketplace remains a central preoccupation of Washington’s tech diplomacy.
The Need for Better Strategy
However, a long list of policy aims is not the same as a strategy. In fact, it can be anathema to one. Many of these goals are vague and have no clear limiting principle. They can also come into conflict with each other, or with other U.S. national priorities. A good strategy would clarify key objectives and prioritize them. It would also proffer a theory of success—a realistic basis for determining which forms of technological decoupling will actually achieve U.S. aims. So far, Washington has struggled to articulate such a strategy.
A long list of policy aims is not a strategy. Washington has struggled to clarify key objectives, prioritize them, and proffer a theory of success.
Without more strategic clarity, decoupling can become overaggressive or incoherent and contrary to U.S. interests. For example, the U.S. military does not need (and cannot achieve) unlimited advantages over China’s military in every place, time, and domain. The United States must define its desired “military edge” over China in more specific terms. Likewise, if Washington seeks to rebalance the terms of bilateral economic competition, it should have a desired model of the global economy in mind. Are U.S. policymakers aiming for two largely separate international economic systems, or would China remain integrated within a modified global economy? And is the point to maximize U.S. prosperity and technology leadership, or to minimize China’s (which are not the same thing)?
Without a sense of strategic priorities, decoupling can cause havoc as one objective smashes into another. Barring Chinese graduate students helps to reduce illicit technology transfer, but it also hampers U.S. technological competitiveness by spurning a key source of skilled labor.1 Which goal takes precedence? Technological decoupling is fraught with these kinds of costs and risks—and unfortunately, their ripples can spread far beyond the technological realm, affecting seemingly unrelated U.S. goals. For example, harsh U.S. measures against Huawei and TikTok have helped convince many in Beijing that Washington seeks wholesale economic containment. In climate change talks, China may now be even more liable to view proposed emissions reduction targets as a stealth means of stifling its economic growth.
Finally, without a strategic theory of success, decoupling may fail to accomplish much of anything good. U.S. efforts to prevent the flow of sensitive technology into China—for example, equipment for manufacturing 5- and 7-nanometer node microchips—require cooperation from many other countries that participate in the supply chain or have access to the same sensitive technology. Without this cooperation, technology controls can be futile and ultimately self-defeating. Which countries, or multilateral institutions, would belong to the U.S. “side” of trusted partners in a given technology area? What mixture of inducement, pressure, and persuasion could succeed in bringing those countries on board and/or reshaping multilateral institutions for this purpose? And when are these diplomatic efforts really worth the payoff?
The Current U.S. Strategy Debate
After the chaos and inconsistency of the Trump years, Biden will need a more rational approach—clearly defining U.S. objectives for decoupling and articulating a strategy to achieve them. This is a high stakes challenge. Technology is a key determinant of American national well-being and power, and a central arena of U.S.-China strategic competition. It is also fraught with risk and uncertainty. Too much interdependence with China could leave the U.S. economy, society, and national security apparatus vulnerable to espionage or subversion, and make America complicit in Chinese technological abuses. Yet too much decoupling could impair the U.S. tech ecosystem, further destabilize the bilateral relationship, and alienate U.S. allies and trading partners caught in the crossfire.
There is heated debate about how the United States should thread this needle. To grossly oversimplify, one can define three general camps (see Table 6).2
Restrictionists. First, what might be called a “restrictionist” camp calls for dramatically curtailing U.S.-China technology ties. The harshest proposals come from China hawks like Matt Pottinger (who has advocated expanding U.S. outbound investment restrictions “by at least an order of magnitude”), Derek Scissors (who has recommended far tougher export controls and an “outbound version of CFIUS”), and Senator Tom Cotton (who has proposed a “research blockade” on China, sweeping export controls on high-end semiconductors, secondary sanctions amounting to a “death sentence” for China’s “national champions,” and revocation of Permanent Normal Trade Relations).3
Some human rights advocates also have restrictionist leanings: twenty-four NGOs including Human Rights Watch, Freedom House, and PEN America have called for “a series of escalating actions against technology companies found to be contributing to China’s mass surveillance, including by imposing Global Magnitsky sanctions,” while New York Times columnist Farhad Manjoo suggested that technological and economic integration with China “isn’t worth the moral cost.”4 And restrictionist sensibilities seem fairly common within U.S. national security officialdom, particularly in the military and the Intelligence Community (IC). In 2019, Chairman of the Joint Chiefs of Staff General Joseph Dunford expressed “great concern” that U.S. tech firms provide “indirect benefit” to the PLA when they operate and conduct research in China.5
Restrictionists tend to define bilateral tech ties as zero-sum: China gains long-term strategic advantages while America reaps only marginal and transitory gains.
As these examples indicate, restrictionists have varied diagnoses of the problems they seek to solve and the appropriate U.S. policy response. One common view holds that Beijing is successfully executing a long-term plan to sap American global strength and attain regional or even global hegemony.6 Technology is seen as central to China’s plans, allowing Beijing to steal U.S. secrets, leapfrog U.S. military capabilities, bolster its own and other countries’ repressive capabilities, and more. Restrictionists therefore tend to define bilateral tech ties as zero-sum: China gains long-term strategic advantages by exploiting U.S. tech industries and systems, while America reaps only marginal and transitory gains, like paying lower prices for China-derived tech goods. Accordingly, restrictionists favor broad-based technological decoupling aimed at denying China meaningful opportunities to draw support from, or establish influence within, the U.S. tech ecosystem. Hal Brands, for example, has proposed that Washington “work with allies to slow Chinese innovation through technological denial policies.”7 Some restrictionists go beyond mere decoupling and argue that U.S. tech controls should be designed to harm and ideally destroy major Chinese tech companies, such as Huawei.
Cooperationists. At the other end of the spectrum, a range of what might called “cooperationist” voices have opposed major elements of Washington’s technological decoupling agenda. U.S. business interests often tout the economic and technological importance of maintaining global supply chains and market access to China. For example, Google warned that Huawei’s Entity List designation could create cybersecurity vulnerabilities, and the Semiconductor Industry Association has argued that “America’s longstanding leadership in semiconductors is put at risk by broad restrictions on U.S. exports of commercial chip technologies to China.”8 Meanwhile, some independent technologists and tech activists—including key pioneers of the early internet—remain vocally committed to techno-globalist ideals and view decoupling as anathema. The World Wide Web Foundation (joined by Amazon, Facebook, Microsoft, Twitter, and others) has warned against “internet fragmentation” and “techno-protectionist initiatives,” while the Internet Society believes that “having a government dictate how networks interconnect according to political considerations rather than technical considerations, runs contrary to the very idea of the Internet.”9
Cooperationists often posit that the United States would be well positioned to lead and benefit from a twenty-first-century system of open technology collaboration.
Cooperationists often posit that a twenty-first-century system of open technology collaboration would reproduce the waves of innovation and widely shared global progress said to characterize the late twentieth century. And the United States—with its historically dynamic innovation system—would be well positioned to lead within and benefit from such an environment. They also argue that many technology controls are simply unworkable, given the practical difficulties of predicting technological change and regulating cross-border flows in an already globalized, digitized world.
Another strain of cooperationism exists among progressives, who caution against overinflating Chinese (and other foreign) threats. Senator Bernie Sanders, for example, has argued that “the growing bipartisan push for a confrontation with China” fuels wasteful spending, militarism, bigotry, and authoritarian populism at home while reducing the likelihood of cooperation on key global issues.10 Applying this critique to U.S. tech policy, Sanders has described proposed federal investments in semiconductors as a form of corporate welfare.11 Others have blamed the China Initiative for fomenting xenophobia and racism toward U.S.-based academics of Chinese nationality or ethnicity.12 In addition, some progressives cite climate change as an area where U.S.-China technology cooperation must greatly increase, not decrease. More than forty activist groups—including MoveOn, the Sunrise Movement, and the Union of Concerned Scientists—have urged the Biden administration to “speed the [global] transition away from dirty energy economies” by marrying U.S. clean tech with Chinese industrial capacity.13 (On the other hand, progressive concerns about Chinese human right abuses and untrammeled free trade lead some on the left to favor more tech restrictions.14)
Centrists. Between the poles of restrictionism and cooperationism lies what might be called a “centrist” camp, which seeks to incorporate the best insights of each side while making more room for complexity and uncertainty. Centrists agree with restrictionists that Beijing poses unique long-term challenges to the United States and that technology is a central risk factor. But, echoing cooperationists, they think that some Chinese tech threats are exaggerated, offset by the benefits of cooperation, and only partially addressable via China-focused governmental restrictions. Centrists generally endorse the overall U.S. shift toward partial technological decoupling and accept that decoupling must progress further to protect U.S. national security and economic security. However, they want new technology controls to be carefully scrutinized; they doubt the viability or wisdom of dividing the world into sealed geo-technological blocs. Centrists view Chinese military aggression as a major possibility and question Beijing’s willingness to partner on global issues like climate change and pandemics. Yet they insist that co-existence and collaboration on urgent challenges must still be tried, and so they hope to avoid a technological confrontation that would take bilateral relations to a breaking point. Some centrists emphasize how much we still do not know about China’s long-term path and the ultimate impacts of emerging technologies, and therefore recommend hedging strategies to account for multiple possible futures.
A leading centrist statement is the China Strategy Group report co-led by Eric Schmidt and Jared Cohen. It argues that “some degree of disentangling is both inevitable and preferable,” yet “we [should] seek to avoid unnecessary and counterproductive levels of separation.”15 Many other centrists can be found in technocratic bastions such as mainstream Washington think tanks and academic policy centers. Stephanie Segal of the Center for Strategic and International Studies developed a cost-benefit framework to assess U.S.-China interlinkages; she found that “existing [U.S. government restrictions] go a long way in protecting national security” and that further decoupling should be “targeted” and rigorously evaluated.16 Richard Danzig and Lorand Laskai, summarizing a body of research on technological decoupling commissioned by the Johns Hopkins University Applied Physics Laboratory, advocated “an incremental approach rooted in the indeterminacy of the current moment and recognition of the fact that interdependence is likely to continue.”17 Samm Sacks of New America and others have promoted the “small yard, high fence” concept.18 This popular metaphor, attributed to former U.S. secretary of defense Robert Gates, conveys that technology controls should be the exception instead of the rule, applying only to the most sensitive and strategic areas.19
Centrists have promoted the “small yard, high fence” metaphor to convey that technology controls should apply only to the most sensitive and strategic areas.
The centrist approach to technological decoupling has been embraced by some moderate political figures as well. Senator Chris Coons has also endorsed the “small yard, high fence” metaphor and has proposed “safeguard[ing the] crown jewels of technology” while “strik[ing] the right balance to avoid [full-scale] decoupling of global tech industries between the United States and China.”20 A quiet centrism may also exist at the state and local level. The Carnegie report “Making U.S. Foreign Policy Work Better for the Middle Class,” published in 2020, drew on interviews of state and local government, business, labor, and community leaders and middle-income workers in Colorado, Nebraska, and Ohio. Most interviewees “want[ed] the United States to push back more effectively against unfair Chinese trading practices and make investments at home to compete more successfully with China. But otherwise they tend[ed] to see China pragmatically and [were] not inclined to view the geopolitical rivalry as an organizing principle of U.S. foreign policy.”21 (More recent surveys by the Chicago Council on Global Affairs found that the general American public has become “dramatically” more hostile to U.S.-China trade since 2019.22)
Like the other camps, centrists have diverse policy ideas but tend to unite around a few general principles. First, centrists say that U.S.-China technological decoupling should be selective and targeted. Second, they want decoupling to be coordinated multilaterally. Centrists observe that the United States is a leading, but not exclusive or indispensable, player for many technologies. This means that unilateral U.S. controls are often ineffective, resulting only in self-imposed competitive disadvantages and friction with international partners. Therefore, Washington should work with so-called like-minded countries (in particular, technologically advanced liberal democracies) to create shared policy frameworks.23
Third, centrists insist that “defensive” efforts to curb or thwart Chinese technology threats cannot distract from a core “offensive” program to strengthen U.S. and allied technology ecosystems. Washington has only so much influence over the course of Chinese technological advancement, centrists argue, but there is far more the United States can do to improve its own technological strength. Moreover, many of the problems commonly framed as Chinese technology threats are partially, or even mostly, the result of domestic American challenges. For example, supply chain insecurity (a central focus of China-oriented technology controls) stems in part from industrial consolidation and workforce shortages in the United States; disinformation targeting Americans (a growing concern of China tech watchers) is a largely homegrown problem. According to the centrist view, U.S. policy should primarily focus on supporting America’s own technology leadership, competitiveness, and resilience. Countering China would be a secondary priority.
Implications. This three-camps taxonomy is admittedly crude. Individual people and institutions do not self-identify with these labels and may not agree with them. Each camp is internally diverse and their boundaries overlap and shift. Still, the taxonomy helps to reveal some of the major questions and choices facing U.S. policymakers.
It is clarifying, for example, to compare what each camp sees as the greatest risks for U.S. policy. Restrictionists most fear U.S. complacency during a brief window when China’s tech-driven dominance can still be prevented. Cooperationists most fear U.S. overreaction resulting from inflated perceptions of Chinese tech threats and excessive confidence in restrictive measures. Centrists, hoping to avoid both these perils, most fear U.S. incapacity to achieve a successful balance. Key capacity challenges include securing public-private coordination, mapping complex supply chains, and overcoming Washington gridlock, polarization, and bureaucratic clumsiness. Ultimately, U.S. leaders must choose which fears (and hopes) they most identify with.
Restrictionists fear U.S. complacency toward Chinese tech threats, while cooperationists fear U.S. overreaction. Meanwhile, centrists fear U.S. incapacity to navigate between both perils.
This taxonomy also gives a rough guide to the changing direction of U.S. thought and policy. Cooperationism was the dominant view when Obama took office, and it still had some currency by the time he stepped down. The Trump administration’s policies and rhetoric became increasingly restrictionist over four years—though it sent contradictory signals, and Trump departed before a fully restrictionist vision could be realized. The Biden administration has so far retained much of the Trump policy architecture, while speaking a language that sounds more centrist. For now, the center of gravity in Washington seems to lie somewhere between the centrist and restrictionist positions.
A Case for a Centrist Strategy
The debate among restrictionists, cooperationists, and centrists cannot be resolved by a policy paper. Part of what separates these camps are divergent worldviews and values—deep-seated disagreements about American priorities and purposes. The three camps also disagree about more tangible questions, such as how to understand China’s capabilities and intentions, what kind of political economy will produce the most innovation in the coming decades, and how much influence the United States will have in shaping global technological choices. The answers to these questions will not be known for decades. For now, strategists and policy experts can only venture their best assessments based on incomplete data and personal beliefs—and, for some, perceived political advantage. Indeed, the biggest drivers of real-world U.S. strategy will probably be political: partisan dichotomies, public sentiment, business interests, media attention, and civil society advocacy.
Despite these limitations, expert analysis can still help to inform and guide political and public dialogues about U.S.-China technological decoupling. Analysts can present the strongest, clearest versions of each strategic position, and continually sharpen and disseminate their ideas in the face of critiques and evolving evidence. In that spirit, below are two brief arguments in support of the centrist position. First, narrow and targeted China-focused technology restrictions can buy time for more positive U.S. investments to bear fruit, while reducing the costs and risks of decoupling. And second, a clearly articulated centrist strategy can help Washington maintain control of the pace and course of technological decoupling, thereby helping to prevent a runaway cycle that moves faster and further than U.S. leaders want.
Buying Time
The very existence of a heated debate among restrictionists, cooperationists, and centrists is itself an argument for the careful incrementalism that centrists espouse.24 We are still in the early years of a radically new phase in U.S.-China relations, and we are only at the cusp of far-reaching global transformations promised by AI and other emerging technologies. These coming changes, while undoubtedly significant, remain difficult for present-day observers to assess. How will China’s strategic intentions and technological capabilities change as the country further develops? How will cross-border data flows, new energy tech, or quantum computing reshape the global economy and security environment? How will countries of the world (and multinational companies) align themselves in a more fractured geo-technological landscape? How will the familiar costs and benefits of U.S.-China technological interdependence shift in the coming decades? There is simply no reliable way to answer these questions today. Policymakers should therefore play for time—preserving and expanding American options while the future comes into sharper focus.
Offense and defense. The primary effort should be a positive program to strengthen U.S. and allied technology ecosystems from within (the so-called “offensive” agenda). An offensive program would include new investments and incentives to bolster and diversify innovation pathways, supply chains, talent pipelines, and revenue models in strategic technology areas.
Such investments make sense regardless of how U.S.-China technology relations develop over time. If the United States ultimately concludes that full-scope technological decoupling has become necessary, then offensive investments will have prepared America to separate with fewer costs and risks. But if American leaders eventually decide to maintain substantial tech ties with China, then the offensive measures will have positioned U.S. firms to compete more effectively in a globalized technology marketplace. Moreover, many offensive investments are worth making for their own sake, irrespective of the China challenge. Even if China did not exist, concerted efforts to strengthen the U.S. technology base would still help boost American productivity and economic dynamism.
Offensive investments like education and R&D take a long time to pay off. Conversely, “defensive” measures—government restrictions aimed at thwarting Chinese technological advancement or influence—are fast-acting and readily implemented. They should therefore be used to buy time for the offensive agenda to bear fruit. Specifically, Washington should impose new controls in technology areas where China seems close to securing unique, strategically significant, and long-lasting advantages. In such circumstances, defensive measures can help to forestall Chinese breakthroughs long enough for the United States to regroup and regain technological momentum.
Fast-acting and readily implemented “defensive” restrictions can buy time for “offensive” investments, like education and R&D, to bear fruit.
Defense is not risk-free, however. U.S. tech controls can be costly (harming U.S. industries and innovators), imprecise (chilling more activity than intended or desired), and even futile (failing to substantially remedy the relevant Chinese tech threats). And these side effects can be hard to predict, measure, and control. That is why restrictive tools should be confined to a secondary, supporting role and only used in compelling circumstances. Restrictive tools by themselves are incapable of ensuring U.S. technological preeminence over the long haul, but they can and should be used to frustrate Chinese dominance in the short run. The right U.S. technology controls can help to preserve competitive opportunities while American offensive efforts better position the country to succeed and lead in key technologies.
Comparing technology areas. Consider 5G telecommunications equipment. The United States and many other countries have been in the process of purchasing large-scale 5G infrastructure that will likely operate for many years, providing the supplier country with a long-lasting technological beachhead as well as durable economic and political influence. Until 2019, Huawei and ZTE appeared set to secure Chinese dominance of the global 5G telecoms marketplace—occupying, for the foreseeable future, some of the most strategic terrain in cyberspace.25 Although no U.S. company competed on a one-for-one basis with Huawei or ZTE, multiple U.S. national security and economic interests were nevertheless at risk: protecting secrets, preventing sabotage, blunting the global influence of an adversary, and more. This was a closing window of opportunity if there ever was one, and a clear impetus for defensive measures.
In response, the United States imposed a barrage of restrictions on ZTE and even more on Huawei: the Entity List, the Covered List, the Non-SDN Chinese Military-Industrial Complex Companies List, the Section 889 blacklist, the special foreign direct product restrictions, the “remove and replace” rule, federal indictments of Huawei and its CFO, and visa bans for certain employees, among other actions.26 Washington also waged a unique diplomatic campaign (branded for a time as “The Clean Network”) to dissuade third countries from buying Huawei and ZTE 5G equipment.
These moves were reasonably successful: several major countries opted not to purchase Chinese 5G gear, improving the market position of European competitors.27 Most important, an open 5G architecture called O-RAN was given precious time to develop as a serious alternative, reducing the prospects of Chinese vendor lock-in and creating new openings for U.S. firms.28 Meanwhile, Washington took active steps to manage the costs of its telecoms decoupling efforts. It has paid for small U.S. carriers to replace Huawei and ZTE equipment, helped finance certain third-country purchases of Western-made 5G gear, allowed U.S. chipmakers to retain some Huawei business, and drafted legislation to infuse the U.S. semiconductor sector with new federal funds.29
5G telecommunications equipment provided an especially compelling case for U.S. restrictions, because the United States faced a closing window of opportunity to prevent Chinese dominance of a strategic technology. But each technology area has a different strategic profile, and few of them will present as clear-cut a case for so many restrictive measures. AI software, social media platforms, smartphones, drones, Internet of Things devices, routers, advanced batteries, semiconductors, cloud services: they all have distinct national security implications, economic impacts, marketplace dynamics, supply chains, and innovation trajectories. In many cases, strong new U.S. government technology controls could do more harm than good.
Balancing global challenges. One reason for caution is the existence of other urgent crises, beyond Chinese tech threats, that compete for Washington’s resources and attention and can sometimes clash with technological decoupling. Even as the United States engages in bilateral power struggles with China (and other state adversaries), it faces global and domestic challenges that are arguably still more daunting and have their own closing windows of opportunity. At a global level, COVID-19 exemplifies the perils of today’s interconnected world. Contagions—in the form of infectious diseases, financial crises, or cyber catastrophes—loom on many fronts, requiring new forms of collective action across geopolitical divides.30 The most obvious of these enormous threats is climate change.
While decoupling might seem like a solution to excess interconnectedness, global challenges cannot be solved without deep global cooperation. If Washington and Beijing cannot come together with others to address shared risks, then any U.S. national accomplishments may be washed out by a rising tide of global calamity. It is imperative that U.S. government policies toward China—including tech policy—address these larger problems and avoid making them worse.
Even as the United States engages in bilateral power struggles with China, it faces global and domestic challenges that are arguably still more daunting and urgent.
For example, Washington should think twice before walling itself off from Chinese clean energy technology such as solar cells, wind turbines, and advanced batteries. Granted, some Chinese clean tech companies have benefited from unfair practices like intellectual property theft, and the United States has powerful motivations to protect and nurture its own industries in these emerging strategic sectors.31 Yet the world has years, not decades, to avoid catastrophic and irreversible climate damage; any delays in the deployment of low-carbon-intensive infrastructure would require powerful justifications.32 By the same token, U.S. sanctions on Beijing’s national tech champions should avoid inflicting so much Chinese economic pain that bilateral climate cooperation breaks down. In September 2021, China’s climate envoy made the not-unreasonable case that climate “cannot possibly be divorced” from other friction points: “The U.S. side hopes that climate cooperation can be an ‘oasis’ in China-U.S. relations, but if that ‘oasis’ is surrounded by desert, it will also become desertified sooner or later.”33
Balancing domestic challenges. Domestically, the U.S. political system is floundering, its social cohesion fraying, and its economic promise hollowing for too many people. These trends have complex, multi-decadal causes but have dangerously accelerated in recent years. It was only a year ago that the United States suffered an abortive insurrection, and most experts believe that American democracy remains unstable. U.S. policymakers must therefore focus much of their attention on the home front, even at some risk to traditional national security priorities such as addressing Chinese tech threats.34 For example, the U.S. government’s ongoing crackdown on Chinese graduate students and researchers cannot be allowed to trigger a mass exodus of Chinese undergraduates, who pose little security risk yet pay billions of tuition dollars, in effect subsidizing educational opportunity for many Americans.
In sum, an overaggressive technological decoupling can set back other national priorities that may matter more or come to a head sooner. This does not negate the risks of U.S.-China technological interdependence, which are real and will likely grow in years ahead. But the United States must balance the troubling possibilities of tomorrow against the lethal dangers of today. This means buying additional time for U.S. leaders to assess geo-technological developments, juggle domestic and global crises, and implement long-term investments in American technological strength. Select defensive measures can extend these timelines—helping to lay the groundwork for greater technological independence in the future, should it become needed, even as most U.S.-China tech ties are allowed to endure for now. Balancing in this way can help hedge against multiple scenarios, from full-scope decoupling to relative technological integration.
Maintaining Control
Time is one of two decisional resources that Washington must conserve as it manages technological decoupling. The other key resource is control over the decoupling process—the ability to set its pace and scope so that decoupling aligns with American needs. Granted, the U.S. government has never had total control. Beijing maintains its own long-standing limits on foreign technology; other governments have significant influence on global supply chains and markets; and companies around the world make private calculations about cross-border investments and deals. Nevertheless, the distinct wave of technological decoupling that began in the mid-2010s was initially of Washington’s design—set in motion by the U.S. government’s purposeful, albeit ill-coordinated campaign of China-oriented restrictions. Other actors have been comparably reactive (maneuvering in response to U.S. policy) and cautious (often seeking to conserve the status quo ante). This kept the U.S. government in the driver’s seat, letting American officials advance decoupling as they saw fit while stopping short wherever they perceived risks to U.S. interests.
That privileged position could not last for long. As decoupling progresses, various foreign and domestic actors have increasingly sought to seize initiative for themselves—seeking to shape the decoupling process rather than remain at the mercy of U.S. government policy. These dynamics, explored below, create a risk of feedback loops: each new U.S. technology control strengthens the incentives for others to retaliate in kind, or to get ahead of the next Washington restriction, which accelerates decoupling beyond what U.S. officials intend. If Washington fails to monitor and manage these escalatory dynamics, it could accidentally set in motion a frenzied, ever-intensifying cycle of decoupling that races well past what America can afford.
Preemptive action by outside actors. The first kind of feedback loop involves outside actors seeking to anticipate and preempt future rounds of U.S. technology restrictions. Now that U.S.-China technology decoupling is well underway, companies, universities, investors, and other actors around the world want to avoid being caught in the maelstrom. This means not making significant long-term commitments that could be vulnerable to collapse if the U.S. government decided to impose new technology controls. In essence, these actors could “self-decouple” now, on their own terms, rather than risk a more abrupt and forceful U.S. government mandate later. The more restrictive measures that Washington imposes, the more outside actors will look to stay ahead of the curve. The consequences could potentially snowball, causing much more extensive technological decoupling than the U.S. government intends.
Companies and foreign governments could “self-decouple” now, on their own terms, rather than risk a more abrupt and forceful U.S. government mandate later.
A vivid example came in July 2020, when the Justice Department announced the indictment of six Chinese researchers for hiding their affiliations with the PLA. Following these six indictments, more than one thousand other Chinese researchers reportedly left the United States. “The breadth and depth of the exodus was not expected,” an anonymous U.S. official told the Washington Post.35 James Mulvenon, who has written extensively on China tech threats, told the newspaper that “he does not believe there were 1,000 active PLA-linked researchers in the United States but said it is possible many researchers affiliated with state institutes and universities left over the last year because they feared they might lose their fellowships.” In other words, the U.S. government failed to anticipate that its small action would trigger a huge counterreaction, disrupting vast amounts of legitimate research activity. In the end, the Justice Department dropped charges against five of the six defendants. Still, it claimed to have “advanced our deterrence objectives,” citing the mass exodus of Chinese researchers as a positive development.36 The whole episode casts significant doubt on Washington’s ability to predict and adequately weigh the collateral consequences of its China-tech actions.
Chilling effects from vague restrictions. The episode also illustrates a more general problem: vague or opaque U.S. government restrictions can chill far more technological activity than policymakers intend. There are many impediments to designing precise U.S. controls. Major “technologies” that Washington seeks to protect (such as AI, 5G, microelectronics, and drones) are really high-level constructs and systems-of-systems built from multiple interlinked technology families. Their smaller subelements (for example, advanced batteries that might power drones or electric cars) have complex global supply chains and innumerable uses and users. Agencies struggle to divvy up this mass of technological interconnections into clean administrative categories. And their criteria for doing so—premised on such notions as “national security” and, increasingly, “economic security”—are poorly conceptualized and highly contested. Early-stage technologies pose particular regulatory challenges because their future impact can only be guessed.
In the face of these uncertainties and administrative dilemmas, U.S. government agencies often take what they view as a cautious approach. They announce broad, open-ended authorities that would permit—but not require—a sweeping range of new government technology restrictions. The government can then apply these authorities on a case-by-case basis, deliberating in secret and weighing a host of variables. This approach maximizes flexibility: enforcement can be dialed up or down based on new data, circumstances, and political imperatives. Its ambiguity also makes it harder for adversaries to identify and exploit loopholes in Washington’s decisionmaking framework. Examples of this approach include CFIUS reviews, enforcement of the Commerce Department’s new ICTS supply chain security rule, the licensing process for many export-controlled items, and designations under many sanctions authorities.
U.S. agencies often announce broad, open-ended restrictive authorities they can then apply on a case-by-case basis, deliberating in secret and weighing a host of variables.
However, too much discretion can ultimately be self-defeating. A major risk is that outside stakeholders see these opaque technology control regimes as risky and unpredictable, thereby chilling activity that could otherwise benefit the United States. Consider the Trump administration’s visa ban for Chinese graduate students and researchers affiliated with Beijing’s “military-civil fusion” programs; the ban left many key terms undefined, including what affiliations would be disqualifying. The policy’s ambiguity generated widespread confusion about its scope and impact. A rigorous analysis by Georgetown’s Center for Security and Emerging Technology tentatively “suggest[ed] 3,000 to 5,000 as a reasonable range for the annual number of students affected,” calling this “a low-confidence estimate” and warning that the real number “would be much larger” if “military-civil fusion” was interpreted more broadly than the report assumed.37 (The study was “unable to assess” the impact on Chinese nonstudent researchers due to a lack of publicly available data.) Today, more than eighteen months after the policy was announced, there is still no official public account of its key parameters.
Confronting this uncertainty, many Chinese graduate students and researchers can be expected simply to avoid applying to U.S. universities. Many U.S. universities will likewise avoid admitting or hiring certain Chinese applicants—even in cases where there was no national security risk and a visa might actually have been granted. (U.S. officials have offered rough estimates of visa revocations and denials, but have not yet publicly addressed potential chilling effects.)38 Moreover, such dynamics can become self-reinforcing. Chinese graduate students and researchers diverted from the United States will go somewhere else instead, and eventually these alternate academic paths could become popular or even default options. The net result could be large, long-term reductions in American access to top academic talent.
Chinese government retaliation. Another feedback loop stems from Beijing’s retaliation against U.S. technology controls aimed at China, which creates a risk of lengthy tit-for-tat reactions or escalatory spirals. So far, Beijing’s responses have generally been reciprocal.39 For example, it established an “unreliable entities list” following increased U.S. use of the Entity List, and Beijing imposed new technology export controls after related moves by Washington.40 But future responses could be more damaging. Many in Beijing believe that the United States is intent on destroying the Chinese technology ecosystem, and Chinese domestic narratives about tech competition have become increasingly nationalistic.41 A particularly harsh U.S. restriction, or the overall accumulation of controls, may cause China to step up its responses or broaden them into new areas. Alternatively, Beijing might overreact due to misperceived U.S. intentions.
Retaliation by China could put pressure on Washington to respond in kind, risking a repetitive cycle that takes decoupling further or faster than the United States initially envisioned. For example, the U.S. order for ByteDance to divest from TikTok was followed, less than a year later, by China’s pressure on ride-hailing company DiDi to de-list from the New York Stock Exchange.42 Although Beijing probably had multiple motivations for reining in DiDi, it publicly cited data security concerns, mirroring Washington’s main justification for the TikTok order. Beijing’s abrupt exercise of power over DiDi aggravated U.S. leaders’ worries that Chinese companies fail to disclose regulatory (and other) risks and are in Beijing’s thrall. Several senators seized upon the episode to promote an accelerated timeline for de-listing all Chinese companies from American exchanges under the Holding Foreign Companies Accountable Act.43 These moves and countermoves illustrate how easily escalatory spirals could be set in motion.
China has many cards to play if it chooses to step up its retaliation for U.S. tech restrictions. For example, it could dissuade or bar Chinese undergraduates from attending U.S. universities, depriving the United States of billions of dollars in tuition revenue at a time when many American institutions of higher learning are struggling financially.44 It could impose controls on the rare earth metals required for many important technologies, which China nearly monopolizes.45 It could further limit the activities of U.S. tech companies operating in China, bar or unwind U.S. investments and joint ventures, or ban the purchase of certain U.S. tech products. And if Beijing seeks to respond outside of the technology domain, the possibilities are open-ended.
These Chinese retaliation options illuminate vulnerabilities that U.S. leaders should try to address over time. For now, however, they are realities of interdependence. They highlight the damage America could suffer if decoupling gets out of hand and is no longer being controlled by Washington. Granted, China would also suffer in the process, so a measure of deterrence almost certainly exists. Nevertheless, history is replete with examples of destructive, seemingly irrational cycles of international escalation. A responsible U.S. strategy for technological decoupling must account for and mitigate this risk.
Domestic political dynamics. Finally, U.S. technology controls can shape domestic politics in ways that encourage ever-stronger restrictions in the future. Politically speaking, China-related controls—like other kinds of U.S. sanctions and restrictions targeting adversaries—are easy to impose and hard to reverse. Congress has also repeatedly stepped in to turn discretionary executive measures into permanent statutory requirements. The result is a one-way ratchet, gradually limiting the policy space of each successive administration.
Biden, for example, has so far opted to retain many Trump policies that were highly controversial when first instituted—including the China tariffs and the unique foreign direct product rule applied to Huawei. Biden also allowed Trump’s sweeping ICTS regulation to come into effect, surprising multiple business groups that had called the rule unworkable. Although Biden may actively support some of these measures, politics are probably a factor in others. The Wall Street Journal reported that “administration officials [were] concerned that blocking or diluting the [ICTS] rule would send the wrong message about the new administration’s approach to China, potentially fueling criticism that it [was] taking a weaker approach.”46
The economic impact of U.S. government technology restrictions can also ripple into the political arena. For example, a U.S. import ban on certain Chinese tech products could economically weaken the American resellers of those products. If those resellers ultimately exit the marketplace, that would mean fewer voices advocating for bilateral tech cooperation. Conversely, hawkish voices tend to thrive in a restrictive and securitized environment. Palantir, whose data products are used by the U.S. national security establishment, has emerged as a strong advocate of technological decoupling.47 Washington’s drive to counter China tech threats creates business and political opportunities for companies like Palantir, potentially fueling the rise of a well-connected decoupling lobby. There is already a long American tradition of defense and national security contractors exerting influence over public policy—for example, by supporting political candidates and thinkers who warn of foreign threats and advocate muscular U.S. responses. Technology controls aimed at China could unleash similar dynamics, as a subset of U.S. tech companies will benefit from such restrictions and work to entrench or expand them.
In sum, Washington might aim for a moderate level of technological decoupling but end up with something broader, faster, and messier. The risks are serious and demand a strategic response. The United States must preserve the ability to adjust the decoupling process upward or downward—keeping its pace and scope aligned with American needs. That means U.S. technology restrictions should be kept as targeted and precise as possible to minimize the risk of unwanted escalation. Moreover, Washington must communicate its intentions clearly and convincingly to multiple audiences. It should openly clarify its strategic objectives, and even some specific policy criteria, to reassure companies, universities, and foreign governments—including China—of its intentions. This degree of clarity cuts against the American grain: U.S. political and national security leaders like to preserve their own discretion, and they struggle to make credible commitments across presidential administrations. But in a complex and interdependent global technology landscape, too much silence or ambiguity may actually cede control to others.
Notes
1 Evan Burke, “Trump-Era Policies Toward Chinese STEM Talent: A Need for Better Balance,” Carnegie Endowment for International Peace, March 25, 2021, https://carnegieendowment.org/2021/03/25/trump-era-policies-toward-chinese-stem-talent-need-for-better-balance-pub-84137.
2 For a more sophisticated taxonomy that is not tech-specific, see Ganesh Sitaraman, “Mapping the China Debate,” Lawfare, May 26, 2020, https://www.lawfareblog.com/mapping-china-debate. For a robust synthesis of decades of expert debates on geo-technological competition and controls, see Adam Kline and Tim Hwang, “From Cold War Sanctions to Weaponized Interdependence: An Annotated Bibliography on Competition and Control Over Emerging Technologies,” Center for Security and Emerging Technology, September 2021,