China hawks claw at Nvidia deal

Politico

3 days ago

With help from Doug Palmer, Jacob Wendler and Daniella Cheslow
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And with that, to the news at hand.
The Trump administration's potential deal with Nvidia over its chip exports is rankling conservative China hawks, who see it as a bad move for American national security and want a more muscular strategy of economic statecraft against Beijing.
These critical voices are publicly making the case that a potential Trump administration deal to charge Nvidia a 15 percent fee in exchange for permission to export less-advanced semiconductor chips to China undercuts U.S. policy. Analysts argue that the current regime of export restrictions around chips has helped the U.S. gain an edge over the sensitive technologies and artificial intelligence capabilities.
The White House, which didn't respond to NatSec Daily's request for comment, and tech companies have justified loosening export controls by arguing that the windfalls of selling less-advanced technology to China would give Silicon Valley needed capital to finance new investments in AI and computing technologies. There are some legitimate debates about the legality of the potential deal, as first reported by our friends at Morning Trade, which may run afoul of constitutional prohibitions on export taxes.
Yet a notable coterie of Republicans — among them prominent lawmakers and former officials who served in the first Trump administration — aren't convinced. Former Trump officials LIZA TOBIN and MATT POTTINGER took to the pages of The Free Press on Monday to argue the deal 'effectively monetizes what was supposed to be a national security restriction' and equips China to overtake the U.S. on AI technology. They were joined by House China Committee Chair JOHN MOOLENAAR (R-Mich.), who called export controls a 'frontline defense' in protecting U.S. national security.
The American Enterprise Institute's DEREK SCISSORS told NatSec Daily that the deal undercuts one of the Trump administration's main rationales for using coercive economic measures against China and other countries: national security grounds. It also benefits China at the expense of U.S. military capabilities.
'I'm not saying it's a huge risk or it's a completely unacceptable risk, but it's a risk to national security to upgrade Chinese capabilities. And they want more advanced chips,' Scissors said.
Export controls haven't totally prevented China in the past from acquiring advanced chip technology. China often managed to acquire U.S. chips or similar technologies from countries with less stringent export restrictions. Oftentimes companies would ship the chips to third countries and then to China to circumvent the rules. And the chips China's trying to acquire are indeed less sophisticated than the ones Nvidia and other tech giants are currently developing.
But The Foundation for the Defense of Democracies' JOSH BIRENBAUM argued the issues with export controls should motivate the administration to reform, as opposed to abandon, the current system of restrictions. Changes that see the U.S. work with allies to develop better restrictions together may make the difference, as competition and tensions between Washington and Beijing increase.
'We need to now do things not only for the present moment, but for this competition that's evolving,' Birenbaum said. 'That's certainly looking at export controls that are necessary to constrain their military, but also economic power tools that need to be used to constrain their nonmarket economic practices.'
The Inbox
RUSSIA'S BATTLEFIELD MOVES: The Ukrainian military is facing down around 110,000 Russian troops pressing forward in the Donetsk region and making progress breaking through Ukrainian lines less than a week before the summit between President DONALD TRUMP and Russian President VLADIMIR PUTIN is set to take place in Alaska.
The fighting has been fierce at certain points, as small groups of Russian troops have pierced through the front lines. 'Our units are engaged in difficult defensive battles against superior enemy forces,' ANDRII KOVALOV, a spokesperson for the Ukrainian military, told local press. Ukraine has rushed reinforcements to the region and is plugging gaps as best it can.
The outnumbered Ukrainian defenders have used innovative drone units to try and hold large swaths of the front for the better part of the past year, inflicting massive losses on the probing Russian forces. But the newest Russian advance — and Ukraine rushing more infantry into the pocket — has shown that drones alone can't keep the Russians at bay.
Analyst MICHAEL KOFMAN posted on X on Tuesday that the fight in Donetsk 'reflects the broader problematic dynamic, characterized by a lack of cohesive defensive lines, and undermanned units holding terrain, which can result in gradual then seemingly sudden shifts,' as the Russian press their numerical advantage in ground troops.
TRUSTING TRUMP: White House officials are keeping a lid on expectations for Friday's summit between Trump and Putin, portraying the meetup as a step toward a peaceful solution to the Ukraine war and avoiding promises of a ceasefire or any other type of grand bargain, our colleague Dasha Burns reports.
One White House official said that the goal is for Trump to find out if the Russian leader is serious and work toward a trilateral meeting with Ukrainian President VOLODYMYR ZELENSKYY.
PIRRO SKEWERS BARBECUE: U.S. Attorney for the District of Columbia JEANINE PIRRO is citing the same law that the Trump administration is using to impose tariffs on U.S. economic partners as a way to bring criminal charges against a vicious Haitian gang leader.
As our colleague Jacob Wendler writes in, Pirro today accused notorious gang leader Haitian gang leader JIMMY 'BARBECUE' CHERIZIER and an alleged co-conspirator of violating U.S. sanctions imposed on Cherizier in 2020 and cited the International Economic Emergency Powers Act as part of the legal justification for the charges. The co-conspirator is a naturalized American citizen, and Pirro did not rule out denaturalizing them.
The State Department, FBI and Immigration and Customs Enforcement are working together to prosecute Cherizier, who is believed to be in Haiti. The State Department offered up a $5 million reward for information leading to the arrest or conviction of Cherizier, who is the first person sanctioned under the Global Magnitsky Human Rights Accountability Act to be indicted by the DOJ. The efforts come as Haiti's security situation rapidly worsens and a multinational security support mission fails to turn the tide against the well-armed gangs in the country's capital.
'I want to let the public know that anyone who was giving money to Cherizier, also known as 'Barbecue' because of his violent acts in his home country, cannot say, 'I didn't know that he was sanctioned by the U.S. government,'' Pirro said. 'They will be prosecuted, and we will find them, because they are supporting an individual who is committing human rights abuses, and we will not look the other way.'
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The Complex
TRUMP'S REACTION FORCE: There's a memo floating around the Pentagon suggesting a new National Guard Quick Reaction Force that could surge to different U.S. cities quickly in the event of an emergency.
The planning has been going on since at least the start of the summer, according to memos seen by The Washington Post. The memos reportedly call for two hubs for the QRF, with 300 troops to be stationed in Arizona and 300 more in Alabama, comprising a mix of Army and Air National Guard troops. The units would have different levels of readiness, with some being ready to deploy within an hour, and following waves ready to move out on two and 12 hours' notice.
There doesn't appear to be a consensus within the Pentagon about the feasibility of activating groups of guardsmen for 90 days at a time to serve in these specialized units, and the memos show that some military officials fear 'burnout' among Guard units already tasked with plenty of disaster relief and humanitarian missions at home, as well as a steady drumbeat of overseas deployments to keep them busy.
On the Hill
CYBER FUNDING CRUNCH: A Department of Homeland Security program that gave funding for local and state governments to beef up their cyber defenses is expiring at the end of September, and it's unclear if Congress will reauthorize the funding in time.
Sen. RAND PAUL (R-Ky.) is using the reauthorization as an opportunity to neuter the Cybersecurity and Infrastructure Security Agency's disinformation and misinformation programs, our own Maggie Miller reports. Paul chairs the Senate Homeland Security Committee.
Paul didn't respond via a spokesperson, and he's previously cited the deficit as a reason for holding up the legislation. However, a person familiar with the negotiations told Maggie that 'Paul is trying to find some leverage to get his mis- and disinformation policies done.'
Luckily, the bill has a powerful ally in House Homeland Chair ANDREW GARBARINO (R-N.Y.). Garbarino told Maggie the committee 'has been diligently working on legislation to reauthorize and provide sufficient funding for the program to ensure it succeeds in its congressional mandate of effectively strengthening our collective cybersecurity posture.'
By the way, POLITICO Pro subscribers had this reporting first in today's edition of Morning Cybersecurity. Don't want to miss out on sharp, incisive analysis and conversation-driving policy reporting? Sign up here to become a Pro yourself.
Broadsides
HABEMUS HUMAN RIGHTS REPORT: The State Department released the much-anticipated annual human rights report today, and it's a doozy for Brazil, South Africa and European allies.
The report this year concluded that respect for human rights worsened in the U.K., Germany and France and accused officials there of 'significant human rights abuses.' The report highlighted alleged censorship campaigns the department says violated free speech rights in the name of eliminating 'hate speech.' The report also accused the countries of allowing antisemitism to rage without any restraints.
Even harsher accusations were levied against South Africa and Brazil, both of which have seen their leaders tussle with Trump. Brazilian officials were accused of, among other things, 'undermining democratic debate' and South African officials were charged with not protecting racial minorities in the country.
What's not in the report? Any mention of LGBTQ+ rights. The report also sidestepped documented evidence of human rights violations in El Salvador, contradicting last year's report. Criticism of human rights abuses in Russia and Israel were also more muted in this year's report.
Transitions
— Adm. BRAD COOPER is now the top officer at U.S. Central Command, replacing retiring Gen. MICHAEL KURILLA.
— JOE TOMCZAK has joined the Air Force House Liaison Office on Capitol Hill as its new deputy chief. Tomczak, an active-duty special operations pilot, was previously the chief of the Air Force secretary's executive action group at the Pentagon.
— Former Biden Defense Department and Obama Department of Homeland Security spokesperson TODD BREASSEALE is the new chief communications and brand officer at Brighton Marine, Inc., a nonprofit social enterprise providing health care and housing to veterans and military-connected families.
What to Read
— Shira Efron, The New York Times: The Reasons Israelis Have Closed Their Eyes to Gaza
— Megan Messerly, POLITICO: 'They created this impasse': Lula, Trump at a standstill on tariffs
— Nicholas Bariyo and Alexandra Wexler, The Wall Street Journal: Refugees in Africa Fight Over Food as U.S. Aid Cuts Take Hold
— Caroline Rose and Rafaella Lipschitz, New Lines Institute: Sudan's Emergence as a New Captagon Hub
Tomorrow Today
— Henry L. Stimson Center, 9 a.m.: Arakan Army Advances: Implications for Myanmar's Civil War
— Atlantic Council, 10 a.m.: Experts read between the lines of the US Space Force's warfighting framework
— Institute for Critical Infrastructure Technology, 11 a.m.: Advance Deterrence and the Future of Public-Private Cyber Collaboration
— Washington Institute for Near East Policy, 1 p.m.: Arms Sales and the Middle East: Another Arena for Great Power Competition
— Politics and Prose Bookstore, 7 p.m.: A book discussion on 'King of Kings: The Iranian Revolution: A Story of Hubris, Delusion and Catastrophic Miscalculation'
Thanks to our editors, Rosie Perper and Emily Lussier, whose slights against us should be included in next year's State Department Human Rights Report.