History Offers Some Clues Regarding Export Controls Under the Next Administration

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Nov. 20, 2024
By: Marvin E. McPherson

New leadership across the United States government is beginning to take shape. President- elect Trump has announced nominations for much of his cabinet, Senator John Thune has been selected as the next Senate Majority Leader, and Representative Mike Johnson as Speaker of the House. However, what still looms for this new leadership is the future plan for export controls.

The tension between the export economy and national security represents a persistent problem in policymaking, as government strives to balance economic growth with the imperative to protect sensitive technologies and strategic interests. As detailed in the Department of Commence Strategic Objects, exports are a critical driver of the economy, enabling industries to access global markets, and foster innovation. On the other hand, unfettered trade can inadvertently bolster foreign adversaries or compromise national security by enabling the transfer of advanced technologies. Policymakers face the challenge of crafting export controls that protect national interests without stifling the competitiveness of domestic industries or alienating key trade partners.

This underscores the complex interplay between economic ambition and security priorities that the next administration has to tackle. During President Trump’s first term export controls became a key tool in his strategy to counter China’s economic and technological rise. Between 2017 and 2020, the Department of Commerce significantly increased export controls on items considered critical to China’s military development, including advanced computing technologies, quantum computing, and certain semiconductor manufacturing equipment. Furthermore, BIS added numerous entities from China, Russia, and other countries to the Entity List, restricting their access to U.S. technology and goods.

These measures reflected President- elect Trump’s broader economic strategy that has been characterized by a mix of protectionism and national security imperatives. Export controls were employed not only to prevent U.S. technology from bolstering foreign adversaries but also as leverage in trade negotiations. In a second term, these themes are likely to persist, though the inclusion of Rep. Johnson and Sen. Thune could influence the specific policy directions.

Sen. Thune has historically maintained a businesslike stance on trade and economic policy. Sen. Thune has supported measures to boost U.S. competitiveness in emerging technologies, which could align with stricter export controls on critical technologies like semiconductors and AI. See Global Threats Must Be Met With American Strength. However, Sen. Thune’s history of bipartisan engagement suggests he might seek to build consensus on export control reforms, particularly in areas where national security concerns overlap with economic benefits for American industries, as demonstrated in the Ocean Shipping Reform Act introduced with Sen. Amy Klobuchar (D-MN).

The next Congress will hold a prominent position in shaping export controls. Speaker Johnson has maintained that the U.S. needs to “hold China accountable for its abuses, enhance our national security, and safeguard American interests.” See. Rep. Mike Johnson Press Release “House Fights to Counter the Chinese Communist Party.” The speaker passed over 38 bills in the current session regarding China and national security.

Based on past voting records, proposed bills, and much-discussed potential Presidential orders, the United States’ adversarial stance with China is likely to persist, with expanded export controls targeting Chinese companies and sectors seen as threats to U.S. national security.

Furthermore, given the emphasis on domestic manufacturing and technological self-sufficiency, the next administration may well focus on further restricting the export of advanced technologies. That being said, Sen. Thune does have a record of supporting business in ways that could temper such restrictions when they negatively impact U.S. companies’ global competitiveness.

Finally, it exporters should keep an eye on efforts in Congress to modernize export control laws, possibly expanding their scope to address emerging threats like quantum computing and biotechnology. Both Speaker Johnson and Senator Thune are well-positioned to facilitate such efforts.

Ultimately, export controls under a Trump administration with Sen. Thune and Speaker Johnson in key roles is likely to reflect a blend of familiar themes; protecting American technology, countering China, and prioritizing U.S. interests. The attorneys at Barnes Richardson and Colburn will be keeping a close watch on the first hundred days of the administration which are sure to set the stage for what is to come for the next four years.