[Text/Observer Network Wang Yi] Under the coercion of the previous US Biden administration, Japan and the Netherlands strengthened their control measures on semiconductor exports to China. The current Trump administration is not satisfied with these "minions" while working on formulating stricter control measures.

According to a June 13 report by Nikkei Asia, Jeffrey Kessler (Jeffrey Kessler), deputy assistant secretary for industry and security at the US Department of Commerce, claimed in his testimony before the South Asia and Central Asia Subcommittee of the House Foreign Affairs Committee on June 12 that efforts by the United States and its allies such as Japan and the Netherlands to coordinate export control measures are "not yet complete," and "we cannot allow other countries to undermine our export control measures by exploiting loopholes."

Kessler also threatened that "allies and partners around the world must understand that the U.S. Congress is aware of this issue and hopes they will stand with us when we implement export controls," and if they continue to "exploit loopholes," the U.S. will invoke the foreign direct product rule (Foreign Direct Product Rule). This rule stipulates that products manufactured abroad can be subject to U.S. export controls as long as they use U.S. technology.

Screenshot of US Assistant Secretary for Industry and Security Jeffrey Kessler

According to an analysis of customs data by Nikkei Asia, in 2024, China imported $30.9 billion worth of semiconductor equipment from major source countries, of which nearly $2 billion came from Japan and the Netherlands.

The report stated that last year, China imported $9.63 billion worth of semiconductor equipment from Japan, a year-on-year increase of 28.23%, breaking records for the fifth consecutive year. Since the intensification of tensions between China and the U.S. in 2019, Japan has consistently been the top supplier of semiconductor equipment to China, with annual purchases tripling from 2018 to 2024.

Ranking second, the Netherlands also exported $9.53 billion worth of equipment to China, increasing by 31.6%. Meanwhile, China's total imports of semiconductor equipment from the U.S. only increased by 11.5% to $3.18 billion, down from the record high of $3.69 billion in 2021. Singapore overtook the U.S. last year to become China's third-largest source of semiconductor equipment imports, with import amounts growing by 345% compared to 2018.

In her remarks to Japanese media during her tenure as assistant secretary for export controls at the US Department of Commerce under the Biden administration, Thea Rozman Kendler (Thea Rozman Kendler) said that compared to previous export controls, Kessler took a "radically different approach," adding that "this is not multilateralism; he instructed allies to emulate the U.S."

Since October 2022, the U.S. has gone to great lengths to formulate comprehensive export control measures in the semiconductor sector to curb China's technological innovation. In the final months of the Biden administration, the US Department of Commerce issued four additional measures to further tighten the spread of cutting-edge technologies such as AI and semiconductors globally.

The Trump administration has not formally introduced new control measures, but even if it has many grievances against its allies, it seems intent on continuing to coerce them into pressuring China's semiconductor industry alongside the U.S.

In a statement on May 13, Kessler hinted at a desire to collude with allies, stating that "the Trump administration will take bold and inclusive strategies with trusted nations worldwide to safeguard U.S. artificial intelligence technology while preventing these technologies from falling into the hands of our adversaries."

Bloomberg previously reported that Trump, like his predecessor Biden, intended to pressure key allies to cooperate in upgrading restrictions on China's chip industry, aiming to reach an agreement that the previous U.S. administration failed to achieve. Two senior officials from the Biden administration claimed that they had reached a "verbal agreement" with the Netherlands on restricting semiconductor equipment maintenance in China, but after Trump won the election, the Netherlands changed its stance and opposed the move.

The theme of the June 12 hearing was to discuss the budget of the Bureau of Industry and Security (BIS) of the US Department of Commerce. Kessler requested an additional $303 million budget for the bureau, increasing the number of overseas staff responsible for export controls from 12 to 30 "to strengthen enforcement of export controls." Nikkei Asia noted that this is the largest single investment in BIS history.

Kessler claimed that they process 10,000 to 20,000 licenses per month, "and we need more than one official in every country in the world to effectively enforce these rules."

During the hearing, lawmakers also questioned Kessler about why the Trump administration canceled the "Artificial Intelligence Dissemination Export Control Framework" established by the Biden administration. Kessler responded that this rule was "problematic," adding that it "arbitrarily divides different categories between countries." He "righteously" explained that the rule set by Biden was abolished before it took effect to prevent it from disrupting the global market.

Kessler did not specify what the replacement measure was under the Trump administration, only vaguely praising their so-called "dual strategy," which ensures that U.S. technology does not let China take the lead while guaranteeing that U.S. technology becomes the cornerstone of artificial intelligence infrastructure worldwide.

He did not forget to flatter Trump, claiming that recent deals made by the U.S. president in the Middle East align with this strategy, adding that "he closed markets for other companies, otherwise those companies would replace us."

In fact, related enterprises in Japan, the Netherlands, South Korea, and other countries have always been reluctant to join the U.S. in restricting semiconductor exports to China. They fear that such actions could severely impact their businesses in China. Samsung Electronics and other South Korean enterprises have repeatedly requested exemptions from the U.S. government, and Japanese semiconductor companies dependent on overseas markets also worry about losing the Chinese market. ASML executives from the Netherlands have also repeatedly warned that this U.S. action will backfire.

Regarding Trump's administration's intention to collude with major allies to suppress China's semiconductor industry, the Chinese Foreign Ministry has repeatedly stated that China has repeatedly expressed its firm stance on the U.S.' malicious blockade and suppression of China's semiconductor industry. By politicizing, over-securityzing, and toolizing economic and technological issues, the U.S. continues to escalate export controls on Chinese chips, coercing other countries to suppress China's semiconductor industry. Such actions hinder the development of the global semiconductor industry and will ultimately backfire, harming both others and themselves.

This article is an exclusive piece by the Observer Network and cannot be reprinted without permission.

Original source: https://www.toutiao.com/article/7515332482409955849/

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