US export control measures on national security grounds draw pushback

Washington : US export control measures in semiconductor and quantum sectors on the grounds of national security have drawn pushback from industry insiders and observers.

The US Commerce Department's Bureau of Industry and Security (BIS) is implementing export controls on several semiconductor, quantum, and additive manufacturing items "for nationa8956230.l security and foreign policy reasons," according to documents released on Friday.

Authorities will allow 60 days for public feedback before making a final decision.

"Though China is not explicitly named in the documents, the controls are in line with a series of moves the Biden administration has taken to limit Beijing's developments in areas such as AI and computing," a report by CNBC said.

"As the US continues to step up its efforts to limit China's growth, the global industry has shown a degree of reluctance," the report said, adding that Chinese firms remain key clients of many of the world's leading semiconductor companies, including those in the United States, Xinhua news agency reported, quoting CNBC.

In the latest sign of reluctance, Christophe Fouquet, Dutch computer chip equipment supplier ASML's chief executive officer, said on Wednesday that a US-led effort to limit the company's exports to Chinese customers under the guise of national security had become more "economically motivated" over time.

"I think to make the case that this is about national security is getting harder and harder," Fouquet made the remarks at a Citi conference in New York, adding that he expects pushback to grow.

Dick Schoof, the prime minister of the Netherlands, said that the government is weighing the economic interests involved in ASML's decision to restrict exports to China. ASML is the country's largest company.

Since April, the US government has been pressuring the world's leading supplier for the semiconductor industry to cease servicing certain equipment it previously sold to Chinese customers.

South Korean Trade Minister Cheong In-kyo said recently that for countries or companies trying to comply with the United States, there should be some kind of "carrots," Bloomberg reported.

"We have had a closer economic relationship with China than with any country in the era of globalisation," Cheong said, noting that China accounts for roughly half of South Korea's semiconductor sales.

"We'll have to find a way to the extent that the impact on our companies' business is minimised," he said.

Jeffrey Sachs, an economics professor and director of the Center for Sustainable Development at Columbia University, told Xinhua in an earlier interview that although the United States has tried to limit China's growth by restricting China's access to the most cutting-edge microchips and other digital technologies, it's not working according to plan, because China has accelerated its development of these advanced chips.

"So I think the US approach was wrong in principle and not very effective in practice. And I hope that it is reconsidered," said the economist. "There are better ways for the US and China to find a normal relationship than the US unilaterally imposing this kind of technology restriction."

Sachs, also a senior United Nations advisor, argued that the United States should not use economic containment in the name of national security, calling for proper discussions to find better ways.