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Yahoo
25-02-2025
- Business
- Yahoo
Trump's US government shake-up hits agency enforcing export controls aimed at China
The indiscriminate shake-up of the US government under President Donald Trump has made headlines for affecting everything from nuclear weapons safety to programmes that fight diseases worldwide. Lost in the headlines about these ruptures is a small corner of the federal bureaucracy that might seem inconsequential by comparison. Yet the work of the US Department of Commerce agency responsible for enforcing export control regulations - the Bureau of Industry and Security - carries implications for America's global trade in what is arguably the country's most important products, including Nvidia's A800 and H800 and Intel's HL-328 and HL-388 AI chips for China. Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team. And amid reverberations in the global hi-tech sector following AI breakthroughs by Chinese start-up DeepSeek and talk of a possible major deal with Beijing, the BIS is undergoing significant personnel and policy changes under the Trump administration. Earlier this month, the BIS unexpectedly paused processing applications for export licenses filed after February 5, without official notification or guidance, according to people familiar with the matter. The hold appeared last week to have ended, as some applicants began receiving licenses amid backlogs. Neither the BIS nor the Commerce Department immediately responded to requests for comment. Export-control and compliance experts pointed to Trump's America-first trade policy memorandum as a potential reason for the freeze. However, some analysts also blamed it on the upheaval across various government agencies, exacerbated by Trump special adviser Elon Musk's rapid push to cut the federal workforce and budget. Signed on January 20, the first day of Trump's second term, the memorandum instructed the Commerce and State Departments to review the US export-control system. It called for assessments and recommendations to maintain America's tech leadership and close "loopholes" in existing export controls. Olga Torres, a trade and national security regulatory lawyer, said the temporary halt could be tied to the memo because BIS was reviewing its export controls "to ensure policy alignment with the new administration". The review ordered by Trump could determine "whether they're going to target more dual-use items, expand the list or change the controls on China", she added. Describing the Trump administration as "pro-business", Torres explained that "if you're a European buyer, for example, and you know your vendor in the US is going to have to get licenses and you know you're hearing that they're not shipping or that there could be delays, that uncertainty will definitely impact businesses". Others speculated that the review could lead to even stricter restrictions on sales to China, given the new leadership at the Commerce and State Departments. US President Donald Trump with US Commerce Secretary Howard Lutnick on Friday. Photo: AFP alt=US President Donald Trump with US Commerce Secretary Howard Lutnick on Friday. Photo: AFP> An analysis by Akin Gump, a Washington-based law firm, said the review "may lead to more robust administration and enforcement of export controls, particularly in the context of activities related to the export of advanced technologies to China". Howard Lutnick, the new US commerce secretary, called for empowering BIS "with tariffs to enforce strict policies" in relation to threats from tech transfers to China and called for export controls to be "backed by tariffs" to have full effect. The Akin Gump paper also noted Landon Heid's nomination to serve as BIS assistant secretary of export administration. A China hawk, Heid played a key role in shaping tougher positions on export controls targeting China at both the State Department and the House Select Committee on China from 2022 to 2024. While still a US senator last year, Marco Rubio, now US secretary of state, urged then-commerce secretary Gina Raimondo to implement a blanket "presumption of denial" for export-license applications involving critical technology bound for Chinese entities. "Any serious effort to deny America's adversaries access to powerful technologies mandates an unwavering export regime," Rubio wrote in a letter to Raimondo. Last month, concerns were raised about the effectiveness of former US president Joe Biden's export-control measures on advanced computing chips, which had been enacted in preceding years. The unease intensified after DeepSeek unveiled open-source large-language models, claiming they were trained with only a fraction of the computing power required for some of the leading US-made LLMs. In recent years, Republican lawmakers have criticised the BIS for failing to prevent sensitive exports to China, especially in allowing case-by-case sales to Chinese firms. After Biden imposed a ban on high-end chip sales to Chinese companies in 2022, American semiconductor giants developed less advanced alternatives to retain access to one of their largest markets. Following Trump's inauguration last month, several politically appointed senior staffers have also left the agency. These positions are expected to be filled eventually following Lutnick's confirmation last week. The new administration has dismissed Matthew Borman, a senior official responsible for overseeing export restrictions on China, according to a Reuters report. Throughout more than a decade of service, Borman played a key role in implementing initiatives aimed at limiting Beijing's access to advanced chips, during Trump's first term and the Biden administration. "You simply cannot replace the expertise and institutional knowledge of someone like Matt Borman," said Scott Jones of the Stimson Centre, a Washington-based think tank. Eileen Albanese, who directed the Office of National Security and Technology Transfer Controls at BIS, was also forced to leave the agency, Politico and Reuters reported, citing sources. With a career spanning nearly three decades, Albanese managed the processing of licenses for semiconductors and other items subject to national-security controls under both Republican and Democratic administrations. Jones did not rule out a loosening of restrictions on tech exports to China as part of a grand deal that some analysts expect Trump to try to strike with Beijing, against the wishes of China hawks. "The entire federal government, arguably, is in a state of disarray and uncertainty," he added. Citing the firing and then rehiring of nearly 180 workers at the National Nuclear Security Administration, Jones believed that even agencies involved in national security were not immune to the tumultuous approach to policy. "I think Commerce is just kind of a victim, not a target, of this chaos," he continued, saying "the White House is announcing its intention to reach an accommodation with the Chinese on a range of trade-related issues". The two issues of interest to Beijing were tariffs and a removal of tech controls, he added. Jones said he would not be surprised "if we heard from the Trump administration that they would be exploring a loosening of technology controls to the Chinese, which will create an interesting dynamic with what we call the China hawks on Capitol Hill". He noted that US Treasury Secretary Scott Bessent recently stated that Russia could win some sanctions relief in negotiations to end the Ukraine war. "I really can't emphasise enough what an unusual set of circumstances we're facing right now," Jones said. This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2025 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2025. South China Morning Post Publishers Ltd. All rights reserved.
South China Morning Post
24-02-2025
- Business
- South China Morning Post
Trump's US government shake-up hits agency enforcing export controls aimed at China
The indiscriminate shake-up of the US government under President Donald Trump has made headlines for affecting everything from nuclear weapons safety to programmes that fight diseases worldwide. Advertisement Lost in the headlines about these ruptures is a small corner of the federal bureaucracy that might seem inconsequential by comparison. Yet the work of the US Department of Commerce agency responsible for enforcing export control regulations – the Bureau of Industry and Security – carries implications for America's global trade in what is arguably the country's most important products, including Nvidia 's A800 and H800 and Intel 's HL-328 and HL-388 AI chips for China. And amid reverberations in the global hi-tech sector following AI breakthroughs by Chinese start-up DeepSeek and talk of a possible major deal with Beijing, the BIS is undergoing significant personnel and policy changes under the Trump administration. Earlier this month, the BIS unexpectedly paused processing applications for export licenses filed after February 5, without official notification or guidance, according to people familiar with the matter. Advertisement The hold appeared last week to have ended, as some applicants began receiving licenses amid backlogs.
