Lawmakers Call for More China, Huawei Controls

Republicans on the House Select Committee on China urged U.S. officials this week to cut off a broader range of exports to China, arguing that trade with China is helping to fund Beijing’s efforts to undermine American national security. Committee chair Mike Galagher, R-Wis., specifically asked witnesses from the Commerce, State and Defense Departments to enact a technology export ban on Huawei that the administration has reportedly been considering for the last year (see 2301310009).

Gallagher, speaking during a July 20 committee hearing, said new export controls and other trade restrictions against China have been “stuck” in “interagency purgatory,” adding that he believes new Huawei controls were sacrificed to ease diplomatic tensions with Beijing. Other lawmakers have also accused the Biden administration of delaying new export controls and sanctions against China to limit damage to the U.S.-China relationship, although a State Department official earlier this week said the agency hasn’t delayed any measures (see 2307190057).

Ely Ratner, the DOD’s assistant secretary for Indo-Pacific Security Affairs, said the administration is still “waiting on data and information about the costs of actions like that,” including an expanded set of export controls against Huawei. “I don't think we have that information yet to have rendered a final decision,” he said.

Thea Kendler, the Bureau of Industry and Security's assistant secretary for export administration, stressed that BIS is already “very clear in our national security approach to Huawei -- absolutely no advanced technology is permitted under our regulations.” She also suggested that BIS’ existing export controls against China’s chip industry, including its Oct. 7 restrictions (see 2210070049), give it the ability to sufficiently restrict tech exports to Huawei.

“Under our advanced computing rule of last October, we've targeted technology used by companies like Huawei,” Kendler said. “And that broad, technology sector approach applies to companies across the [People’s Republic of China], and perhaps in a way, that is even more effective than an entity-specific listing.”

But Gallgher said he wants to see a specific change in Huawei policy. “I hope, Ms. Kendler, that your agency will be submitting to the [End-User Review Committee] a request for a vote on denying all U.S. technology to Huawei,” he said. “It is my view that we can't delay this action any longer.”

Other Republicans took a more hardline stance on U.S. exports to China. Rep. Blaine Luetkemeyer, R-Mo., said “we've got to stop everything going to China,” adding that “they use everything against us.” Rep. Carlos Gimenez, R-Fla., urged the administration to reduce its trade deficit with China, saying “just about everything we do with the Chinese undermines our national security.”

Kendler cautioned against cutting off U.S.-China trade. “There is, in my view, a great deal of room for commercial trade that does not harm national security,” she said. She noted that some U.S. companies rely on their Chinese profits to invest in research and development in America. The U.S. semiconductor industry in particular has urged the administration against imposing broad controls on chip exports to China, saying those sales help feed U.S. innovation (see 2306280038).

Other lawmakers said the U.S. needs to better prepare for Chinese retaliation against U.S. export controls and other trade restrictions. Rep. Mikie Sherrill, D-N.J., pointed to China’s export restrictions on germanium and gallium -- two metals used to produce semiconductors -- and said she expects more retaliation to come (see 2307060053 and 2307050018). “I think we're going to see more and more instances of China putting our supply chain at risk,” she said.

Kendler said China has provided “no clarification” for the national security rationale it relied on to impose the controls, adding that the U.S. is “working very closely with allies and partners on these issues.” But she also said it’s “difficult to predict retaliatory action given the arbitrary nature of China's controls.”

Rep. Michelle Steel, R-Calif, suggested the administration do more to increase trade with Taiwan. She said she’s “happy” with the trade initiative reached earlier this year between the two sides (see 2305190074 and 2307190042) but also said the deal is “very tiny” and should be expanded. She called on the administration to include Taiwan in its Indo-Pacific Economic Framework.

Daniel Kritenbrink, the State Department’s assistant secretary for East Asian and Pacific Affairs, said the administration has no plans to include Taiwan in IPEF. “We're very committed to building our partnership with Taiwan,” he said, but “the way that IPEF is currently configured, it has 14 partners. that's where we're focused.”