/2024/12/01/1733076101965.gif?w=3840)
Illustration: Aïda Amer/Axios
The Department of Commerce on Monday announced it will impose a host of new export controls to try to prevent China from developing advanced AI and weapons systems.
Why it matters: The package of new rules is the most comprehensive yet and hits Beijing on various fronts.
- The export controls aim to prevent the Chinese government from developing a variety of weapons from biological to nuclear and to limit China's ability to surveil people and repress human rights, according to Commerce.
What's inside: Commerce is imposing controls on 24 types of chip manufacturing equipment, three types of chip software tools and high bandwidth memory.
- 140 new entities are being added to the Entity List, including chip fabs, tool companies and investment companies.
Commerce is looking to tackle a major loophole with the establishment of two new foreign direct product rules.
- U.S. firms have managed to circumvent controls by increasingly exporting equipment to China from non-U.S. countries, CSIS's Gregory Allen detailed in a recent report.
- The new FDP rules counter those efforts to offshore production and catch tools exported from third countries because Commerce has now assessed they contain circuits that are subject to U.S. controls.
Behind the scenes: Commerce reached out and consulted with companies and industry groups as it formulated the rules to ensure the U.S. remains competitive, a senior administration official said.
- An updated set of "red flag" guidance will help companies ensure they're in compliance and the CHIPS and Science Act will spur domestic manufacturing.
The big picture: An aggressive approach to China has persisted across recent administrations, and these moves are likely to continue under President-elect Trump and the new Congress.
What they're saying: Commerce Secretary Gina Raimondo during a call with reporters said the package of export controls sets the Trump administration up to continue preserving U.S. security.
- "This Commerce Department has been the most aggressive of any in using export controls to keep America safe."
- "As the current administration comes to a close in the next month or two, we are leaving [the Bureau of Industry and Security] more robust, more strategic, more effective than ever."
What we're watching: BIS regularly updates and builds upon its export controls, and we expect that will continue as China and companies find ways to circumvent the rules in a complex, global supply chain.
