Advancing U.S. National Security, Foreign Policy, Supply Chain and Economic Objectives

Quoting National Security Advisor Jake Sullivan, the Honorable Alan F. Estevez, Under Secretary of Commerce for Industry and Security, Bureau of Industry and Security (BIS), US Department of Commerce, explained that, “export controls, if implemented in a way that is robust, durable, and comprehensive, can be a new strategic asset in the US and allied toolkit to impose costs on adversaries and even over time, degrade their battlefield capabilities.” And that, according to Estevez, is exactly what the Department of Commerce is doing.

But deterring adversaries is only one reason the use of export controls is important. “It’s not just the malign actors in the world. It’s actually the pace of technology and the way technology is operating,” said Estevez.

To that end, President Biden had recently signed an executive order that assigned several tasks, such as determining how to utilize export controls on technologies, such as Artificial Intelligence (Al) applications, to Estevez’s office. In addition, Estevez shared he had been utilizing export controls to regulate the pace of mows of semiconductors between the US and China. While these technologies provide great benefit and great risk, ultimately, their use makes the threat environment more dangerous.

BIS has done export controls since its inception in the 1980s. However, until more recent years, it had focused those efforts on weapons of mass destruction—working through multilateral regimes. But those regimes are proving too slow to keep up with the pace of technology. “If you wait a year to do something on artificial intelligence, the genie’s way out of the bottle and you won’t be able to go back,” said Estevez.

As part of its efforts, the Commerce Department employs what it refers to as “offensive programs”, which seek to strengthen the US industrial capacity. This includes working with allies on securing semiconductors, rare earth minerals, and other things for which the US currently relies on other countries. The CHIPS and Science Act which allocated $52 billion to the Commerce Department is a major resource being used to work on these tasks. But, these investments will help to provide assured access to chips for the US, but will not provide sufficient capability. The US will still rely heavily on Korea, Taiwan, and to some extent, China for these items.

Today, 100% of advanced semiconductor production is done overseas, with 90% of that taking place in Taiwan. A Commerce Department study revealed that if conflict caused Taiwan’s major semiconductor company TSMC to disappear, global GDP would drop 3% in the first year and 30% in six years.

While the US has some rare earth minerals, the ecologically unsound mining and processing required leaves the US without the capacity to mine them. The US needs to work with allies to improve its capacity and capability in this space, and to reduce its reliance on China. Currently, when the US implements export controls on China, it has the means to hit back by bans or taking other measures against US interests. While the US wants to maintain dialogue with China, the country’s military-civil fusion requires highly strategic interactions.

Commerce Secretary Gina Raimondo visited China in August for some very frank, productive conversations. But, when those she was meeting with wanted to discuss export controls she put a stop to it. “She said that’s not on the table. We do export controls for national security. National security’s not negotiable,” said Estevez. “So, that’s where we are on that.”

By Sharon Lo Managing Editor, Defense Transportation Journal and The Source