New Administration Would Approach China Trade Issues With Same Fervor, Clearer Strategy, Former Commerce Officials Say

If President Donald Trump is not re-elected, the next administration will remain focused on China, export controls and Entity List actions but will likely approach China with a more clear, predictable strategy, two former top Commerce Department officials said. “You would see a more well-defined, carefully thought-through approach to issues like Huawei,” Peter Lichtenbaum, who served as Commerce’s assistant secretary for export administration during the Bush administration, said during a March 6 International Trade Update panel at the Georgetown University law school. “Not because it's a Democratic [administration], but because it's a more regular-order administration and less policy made by tweet.”

Lichtenbaum pointed to what he said was disorganization surrounding the White House’s decision to place Huawei on the Entity List last year. “That order came down from the White House with no regular order about what exactly will this mean [or] how are we going to impose it,” he said. “They were just told, ‘do this thing.’ And that's not the way good government should work.” The White House did not comment.

Both Lichtenbaum and Kevin Wolf, Commerce’s assistant secretary for export administration from 2010 to 2017, also pointed to Trump’s February tweet (see 2002180057) that appeared to undercut ongoing efforts within Commerce to expand restrictions of foreign exports to Huawei that contain certain percentages of controlled U.S. content (see 2003050041). “There's a lot of flip-flopping on what the actual policy is,” Wolf said. Although another administration might have a more defined strategy toward China, Lichtenbaum emphasized that companies should expect the U.S. to remain focused on restricting technology sales to China. “China is probably the most bipartisan issue in Congress at this point,” he said.

Lichtenbaum added that there is a “lot of frustration” in Congress that the administration has not “moved faster” to place export controls on emerging and foundational technologies (see 1911190042). Commerce has not yet used the authority it was granted under the Export Control Reform Act of 2018 to issue an export control over an emerging or foundational technology, and officials have not provided a clear timeline (see 2002040057). Commerce’s interim final rule in January that controlled geospatial imagery software was issued under authority that existed before ECRA.

A Bureau of Industry and Security spokesperson said the agency is working on the controls and pointed to the recent scheduling of its first Emerging Technology Technical Advisory Committee meeting in May (see 2002240033 and 2003050004). “The Department has been working diligently to stand up the ETTAC, and shares prospective members' eagerness to begin,” the spokesperson said in a statement.

But Lichtenbaum applauded Commerce’s methodical approach, saying the export controls are “difficult issues” and Commerce may not employ many experts on complex technologies, such as artificial intelligence and quantum computing. “They’ve had to educate themselves,” Lichtenbaum said. “I would give them a lot of credit for taking the time to educate themselves, talk to industry, talk to our international partners and try to move forward in a thoughtful way rather than saying we’re going to control all of A.I. … which would have been very, very disruptive.”

Wolf said industry should expect Commerce’s careful approach to continue, saying its progress so far shows it is trying to control “narrow, specific subsets of those technologies.” Industry originally feared the controls would be overbroad, needlessly stifling sales and innovation (see 1911070014). “With this tweet culture, anything is possible,” Wolf said, “but based on the evidence and the timing before the election, it appears as if it's going to be a more regular-order process.”

Both also added that export controls and national security decisions over Huawei have no place in trade negotiations with China, a view that is in line with comments made by Commerce Secretary Wilbur Ross (see 1911040031) but contrary to predictions made by some observers (see 1907180033). “My personal view and my policy view when I was at the Commerce Department was the two topics should have nothing to do with each other,” Wolf said. “You shouldn't have a national security objective as a tool to be traded off for leverage or compromised to achieve some unrelated economic objective in a trade negotiation.”