CTT Roundtable: U.S. Can’t ‘Balance National Security with Sales’

Dr. Roslyn Layton hosted a roundtable discussion yesterday, How Should BIS Evolve to Ensure the U.S. Leads in Critical Technologies?

The event—which coincided with news that President Biden plans to nominate Alan Estevez to head the U.S. Department of Commerce Bureau of Industry and Security (BIS)—featured four former BIS undersecretaries: William Reinsch (Clinton), Mario Mancuso (George W. Bush), Eric Hirschhorn (Obama) and Cordell Hull (Trump).

The participants largely applauded Mr. Estevez’s expected nomination, but cautioned that lawmakers on the Senate Banking Committee, which will oversee his confirmation, should be direct in questioning Mr. Estevez about his position on China.

“While the jury is out,” Mr. Estevez’s nomination is “encouraging,” Mr. Mancuso said. “The next BIS undersecretary is going to have to, for the sake of our country… engage in a deep, substantive policy-level [discussion] inside the interagency.”

On the question of how the BIS should evolve, Mr. Hull stated that the agency needs to “pivot from the traditional mission of non-proliferation to being on the frontlines of the great power competition” with China.

Dr. Layton raised recent noise about Chinese chipmaker YMTC, and asked if it’s on a path to be the next SMIC. Participants agreed that semiconductors are critical in the competition between the U.S. and China.

Semiconductors are “clearly at the top of the list” of the Chinese government’s priorities, Mr. Mancuso said. “For a long time there has been an unwillingness to call out out the Chinese government on its activities,” but the BIS’ use of export controls is “evidence of the U.S. showing up in a very important struggle… and just the tip of the iceberg.” 

“China has demonstrated its determination” to “produce their own technologies without relying on U.S. equipment,” Mr. Reinsch said, which “puts a greater burden on our licensing authorities.”

“The dilemma in the semiconductor sector… is that China is simultaneously the biggest threat and the best customer,” Mr. Reinsch added.

“You don’t balance national security with sales—you can’t,” said Mr. Hirschhorn in recorded comments. Multilateralism is key, he added. “It doesn’t do us much good if six countries make something, and we’re the only ones who are refusing to sell it to a China or a Russia. Multilateralism is the only thing that will work. Otherwise, it’s the equivalent of damming half a river.” The panelists agreed on the importance of fostering innovation in the U.S. semiconductor industry to counter the Chinese government’s ambitions. “Export controls are one leg in a whole-of-government approach,” said Mr. Hull.