1 year ago
Trade restrictions meant to block the most advanced technology, like microchips, from flowing into China have a critical flaw: They don’t cover antiquated equipment, according to a former U.S. trade official who spoke at POLITICO’s AI & Tech summit.
“Many of our policies have focused on just the most advanced and they have left open the ability for, especially our equipment makers, to sell to China,” said Sarah Stewart, who served as deputy assistant for environment and natural resources at the Office of the U.S. Trade Representative.
“This is an area where we got to keep an eye out because the red flags are waiving. We’ve seen this before, with solar, with steel, with other sectors. We have an opportunity now to try and address some of this,” added Stewart, who is now the executive director of the Silverado Policy Accelerator, a geopolitical think tank.
While the most advanced semiconductors are getting thinner and more powerful, legacy chips are typically considered those used in technology manufactured more than a decade ago.
President Joe Biden implemented broad export controls designed to hinder China’s ability to secure the kind of advanced chips that power high-end technology like military applications and artificial intelligence models back in October.
China has responded by pouring billions of dollars to shore up factories that produce so-called legacy chips, which are used to power a range of commodities from smartphones to electric vehicles, drawing concerns from officials in the United States and Europe.
Ronnie Chatterji, a former White House official who assisted in implementing chips legislation, reiterated that there is a “huge” push for legacy technologies in China. “And if you look at what's happened in other sectors where we built up supply gluts from one part of the world it can have a disastrous effect on markets,” he said.
English (US)