American tech companies and lawmakers are worried that rising technological sanctions on China could depress the US tech industry.
The Biden administration believes that China could use American technology to increase its military might and breach the US security systems to pursue its dangerous ambitions.
Now, the US Department of Commerce is planning to introduce new tech sanctions on China that would force some US allies to stop exporting semiconductor manufacturing equipment to Chinese companies. Lawmakers believe that these new sanctions can backfire and end US tech hegemony by sending American tech giants into a “death spiral.”
California Senator Alex Padilla and Congressman Zoe Lofgren wrote a letter to the Undersecretary of Commerce Department, Alan Estevez, and asked him to immediately put these sanctions on hold until the administration can justify that these tech curbs would not damage the competitiveness of American companies worldwide.
Earlier this year, the Biden administration imposed new rules to curtail China’s access to advanced Artificial Intelligence (AI) chips and other state-of-the-art semiconductor technology originally manufactured within the United States.
These American sanctions come at a time when most of the US global allies are hesitant to cut off their tech trade with China, as the country is still the second-largest global economy and can truly disrupt global tech infrastructure using its military prowess in Taiwan, which manufactures almost 90% of advanced global semiconductors that essentially runs the Silicon Valley.
Japan and the Netherlands, two countries that produce top semiconductor manufacturing equipment, are reluctant to impose chronic export sanctions on China, which ultimately enables China to produce advanced semiconductors despite America’s sanctions.
California lawmakers are leading the pushback against rising semiconductor sanctions against China since the state is the home of most US tech companies, including semiconductor manufacturing heavyweights like Applied Materials, KLA, and LAM.
Previously, California Governor Gavin Newsom and Padilla pushed Biden not to proceed with his plan of canceling an R&D program that was supposed to enhance semiconductor research and manufacturing facilities.
The lawmakers want Biden not to sanction China unilaterally at a time when US allies are not willing to follow this path. Instead, the administration should ensure that the actions of every US ally resemble those of the United States, the lawmakers added.
Estevez has recently met tech stakeholders of the Netherlands and Japan to convince them that both countries should increase their efforts to curb tech exports to China.
