While the Trump administration is likely to remake much of the Biden administration’s economic policy, with a renewed focus on broad tariffs, it is unlikely to roll back the Commerce Department’s evolution.
“I’m truthfully not terribly worried that the Trump administration will undo all the great work we’ve done,” Commerce Secretary Gina Raimondo said in an interview. “Number one, it’s at its core national security, which I hope we can all agree on. But two, it is the direction that they were going in.”
It was the first Trump administration that took the initial steps toward the Commerce Department’s evolution, Raimondo noted, with its decision to put the Chinese telecommunications company Huawei on the “entity list.” Companies on the list are deemed a national security concern, and transfers of technology to them are restricted.
Raimondo came into the commerce job focused on confronting the challenge of China by building upon the Trump administration’s actions.
She has overseen a significant expansion of US economic and technology restrictions against China. The Biden administration transformed the tough but sometimes erratic actions the Trump administration had taken toward China into more sweeping and systematic limits on shipping advanced technology there.
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The department now imposes export controls on critical artificial intelligence chips in order to slow China’s military modernization. The Commerce Department has also been involved in examining apps and software for national security risks, banning Chinese electric vehicles from U.S. roads out of concerns they will collect Americans’ data, and regulating AI to prevent the spread of misinformation.
The expanding role of the department is a recognition of how much economics, intelligence and defense have become intertwined.
Raimondo contended that much of the national security establishment remains stuck in a Cold War mindset. Intelligence on Russia, she said, is exquisite. But to reorient to a challenge from China, she said, military, intelligence and economics must be more closely tied together.
“One of my biggest takeaways from my four years in the Cabinet is that we all in the U.S. government need to fundamentally broaden the way we think about America’s national security,” Raimondo said.
Raimondo was speaking on the sidelines of the Reagan National Defense Forum, an annual security conference in Simi Valley, California, where she had delivered remarks on competition with China and the importance of rebuilding U.S. semiconductor manufacturing through the $39 billion in federal funding that Congress authorized under the 2022 CHIPS and Science Act.
The Commerce Department has faced some criticism about whether it is the agency best equipped to restrict and regulate companies for national security ends.
In a report issued late last year, the Republican chair of the House Foreign Affairs Committee cited complaints by current and former officials that the Bureau of Industry and Security, the division in the Commerce Department that oversees export controls, “struggles to achieve its national security mission because it sits within the Department of Commerce, which is designed to increase exports.”
Other critics have pushed the Biden administration to take even more stringent actions against China, arguing that the Chinese government’s access to advanced chips that can create artificial intelligence, crack codes and develop new weaponry poses a significant security threat. Some analysts said the export controls the Biden administration issued Monday continued carve-outs that might allow U.S. businesses to continue to ship some products to companies in China that are involved in efforts to develop advanced chips.
Raimondo acknowledged that the balance between promoting exports and controlling exports critical to national security was difficult.
But she said calls for more expansive controls ignored the views of allies. She said it was critical to work in concert with partners who may have equivalent technology to the United States, to make sure U.S. businesses are not cut off from trading with China if other countries continue their exports.
“We should think of export controls as a precision strike,” she said. “And in the same way that we wouldn’t go into battle without our allies, export controls aren’t effective unless you do it in concert with allies.”
Raimondo’s assertion that economic issues are core to national security is increasingly the common wisdom in Washington. China’s control over global supply chains for minerals has given it a powerful weapon it can wield against the U.S. And some national security experts say China’s work on technologies such as AI and supercomputing could allow it to leap ahead of the U.S. in certain military capabilities.
While it is not entirely clear what Trump’s policy toward China in his second administration will be, some of the people he has tapped for his administration have been China hawks.
A policy brief published this week by researchers at the Peterson Institute of International Economics argued that the U.S. government had dramatically increased its use of export controls and related tools in recent years. Trump added three times as many Chinese entities to national security-related lists in his first administration than the total of presidents over the previous 16 years. And the Biden administration added even more Chinese entities to those lists than Trump did, the brief said.
There are few moves by the U.S. that can get China’s attention more quickly than placing restrictions on the kinds of high-end chips it can access.
In diplomatic meetings, Chinese officials have repeatedly pressed their U.S. counterparts to relax the export controls. The answer during the Biden administration has been that while the U.S. wanted to cooperate on trade, it would not budge on the highest-end AI chips.
Raimondo said the Trump administration should continue that posture. AI has changed the game, and U.S. dominance of that technology over China is a key advantage, she said. The strategy is to ensure that the U.S. and its allies keep control of the most dangerous technology, and deny it to China, at least for a time.
“You can’t make a deal that deals away our national security,” she said. “That would be extraordinarily dangerous and reckless.”
