Semiconductors are a key focus within the technology trade war going down between the U.S. and China.
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The Senate overwhelmingly backed laws Tuesday that may require U.S. firms to notify the Treasury when investing in advanced Chinese technology on national security concerns.
That is a toned-down version of the initial Outbound Investment Transparency Act introduced two years ago, which called for restricting investment — and attracted a good amount of pushback, in line with a Senate aide.
The most recent laws, which doesn’t require review or investment curbs, still faces a process before it might turn out to be law. It’s one in all several measures in a protracted backlog of proposed laws policymakers on the Hill are rushing to clear ahead of a month-long recess in August.
The bill comes as President Joe Biden has long been expected to issue an executive order that may restrict U.S. investment in high-end Chinese tech.
The aide told CNBC that this executive order might be more far-reaching than what legislators are in a position to pass at the moment.
The White House didn’t immediately reply to a request for comment after office hours.
The most recent laws passed the Senate 91-6 in a rare bipartisan agreement, underscoring U.S. worries over China’s development of advanced technology in an intensifying global battle for technological supremacy.
The bill is an amendment co-sponsored by Sens. Bob Casey, D-Pa., and John Cornyn, R-Texas, as a part of the broader National Defense Authorization Act. The Senate is predicted to vote on the defense act by the tip of the week, with each the Senate and the House more likely to discuss their versions of the act early in the autumn, the aide said.
“When American firms put money into technology like semiconductors or AI in countries like China and Russia, their capital, mental property, and innovation can fall into the mistaken hands and be weaponized against us,” Cornyn said in a press release.
“This bill would increase the visibility of those investments, which can help the U.S. gather the data needed to higher evaluate our national security vulnerabilities, confront threats from our adversaries, and remain competitive on the worldwide stage.”
Escalating technological war
In October, the U.S. launched sweeping rules aimed toward cutting off exports of key chips and semiconductor tools to China, lobbying major chipmaking nations to do the identical.
On Sunday, Japan became the most recent country to align with the U.S. after equipment used to fabricate semiconductors were included amongst 23 fresh additions to Tokyo’s export control list.
Last month, the Netherlands, home to ASML, one of the crucial necessary semiconductor firms on the planet, announced recent export restrictions on advanced semiconductor equipment. Corporations within the Netherlands might want to apply for a license to export certain advanced semiconductor manufacturing equipment overseas, under rules that can come into effect on Sept. 1.
U.S. Treasury Secretary Janet Yellen had assured her Chinese counterparts two weeks ago that any curbs on U.S. outbound investments could be “transparent” and “very narrowly targeted.” It was not clear whether she was referring to specific laws or an executive order.
Just days before Yellen’s Beijing visit, China had responded by slapping export curbs on chipmaking metals and their compounds — which China’s Ministry of Commerce claimed to have given the U.S. and Europe advance notice of.
