Biden’s chip sanctions are not effective against China, congressional report says

President Joe Biden’s semiconductor sanctions are not sufficiently preventing China from gaining access to the advanced technology, a Tuesday congressional report asserts.

Chinese firms have been procuring American chip manufacturing machinery to produce cutting-edge semiconductors, which are used in artificial intelligence (AI), according to the report by the U.S.-China Economic and Security Review Commission. Biden administration sanctions have aimed at impeding China’s progress in the semiconductor sector, but it has successfully found ways to circumvent them through dubious claims, self-reliance, and other countries.

The U.S.-China Economic and Security Review Commission today released its 2023 Annual Report to Congress.

Key findings, policy recommendations, executive summaries, and more are available here: https://t.co/WWiD4VObNU pic.twitter.com/U6349k7YN8

— U.S.-China Commission (@USCC_GOV) November 14, 2023

Chinese “importers are often able to purchase the equipment if they claim it is being used on an older production line, and with limited capacity for end-use inspections it is difficult to verify the equipment is not being used to produce more advanced chips,” the report found.

Biden’s 2022 CHIPS and Science Act is designed to advance America’s semiconductor industry while also taking on China, according to a White House fact sheet. The funds provided in the act prohibit the construction of certain factories in China.

“Current restrictions on U.S. semiconductor manufacturing equipment are ineffective because ‘equipment companies … are selling basically every tool they offer to China,’” Semiconductor Analyst Dylan Patel wrote in September, which is cited in the report.

The Biden administration rolled out semiconductor sanctions on Oct. 17, 2023, to further prevent China from acquiring them. They are designed to seal loopholes in previous limitations and reduce the export of equipment required to produce advanced semiconductor chips, according to the rules announced by the Department of Commerce.

“Between January and August 2023, China imported $3.2 billion … worth of semiconductor manufacturing machines from the Netherlands, a 96.1 percent increase over the $1.7 billion … recorded over the same period in 2022,” the report found. “China’s imports of semiconductor equipment from all countries totaled $13.8 billion … over the first eight months of 2023 as Chinese companies built up stockpiles.”

The October restrictions expand upon the Biden administration’s goal of blocking China’s military from using AI in harmful ways, Commerce Secretary Gina Raimondo said, according to Axios.

“China is on pace to more than double its imports of semiconductor equipment from 2019 levels,” the report found.

Since then, China has also ramped up its initiatives to increase domestic chip production, showing its capability to make them regardless of U.S. restrictions, according to the report. Chinese technology company Huawei was able to release a high-tech smartphone as a result of a domestically produced chip that is similar to a U.S.-controlled chip.

The U.S.-China Economic and Security Review Commission, White House, and Commerce Department did not immediately respond to the Daily Caller News Foundation’s request for comment.

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