US seeks to involve allies in assault on Chinese chip industry. Financial Times report
Some experts argue that Washington's export control campaign will be penalized without the participation of Japan and the Netherlands. The deepening of the Financial Times
In his first public statements after the US targeted China's chip industry with tough unilateral export controls, a Commerce Department official said America hoped to strike a deal with allies for more controls. "short term". Writes the Financial Times .
Speaking at the think-tank Center for a new American Security three weeks after the Oct. 7 measures were introduced, Alan Estevez, the undersecretary of commerce for industry and security, cited talks with the Netherlands and Japan on 'imposition of export restrictions on chip- making tools in China.
The Biden administration has been trying to reach a trilateral agreement with its allies for more than a year, as part of its strategy to make it much more difficult for China to develop advanced semiconductors needed for military purposes.
Some were surprised that the US persisted with its October 7 checks before reaching a trilateral deal with Tokyo and The Hague that would have completed its broader effort to slow down China's chip industry.
The chip manufacturing tools market is dominated by three US companies – Applied Materials, Lam and KLA – as well as Tokyo Electron in Japan and ASML in the Netherlands. Estevez said the unilateral action, which will target US groups, demonstrates how seriously Washington is taking the issue.
“We were willing to go it alone as an advance and show that we were in the game while talking to our allies,” he said.
The three countries have yet to reach an agreement, in part because Japan and, in particular, the Netherlands want to make sure their companies are not disadvantaged.
Asked if the United States had given the allies a deadline for an agreement before moving unilaterally, Estevez replied: “We do not approach these discussions in a coercive way. They are our allies. I like sake and also Dutch beer”.
Commerce Secretary Gina Raimondo later said the Netherlands and Japan would "follow our lead," but Bloomberg reported that she told the industry it could take as long as nine months.
Estevez and Tarun Chhabra, the White House national security official who spearheaded the Oct. 7 policy, will visit the Netherlands this month to push for a deal, according to several people familiar with the plan.
Earlier this year, nations were close to a tentative deal that would have banned exports of tools capable of making 10-nanometer chips. But The Hague proved less forthcoming after the United States stressed the need for a lower limit of 14nm – a less advanced chip – which partly corresponds to the October 7 checks.
Another source familiar with the matter said Washington felt more urgency to set the 14nm threshold after Semiconductor Manufacturing International Corp, China's top chipmaker, developed a 7nm chip. Imposing a 14nm threshold would make it more difficult for SMIC to develop more advanced chips, especially with cost-effective manufacturing yield.
Another person said The Hague became frustrated in September when National Security Advisor Jake Sullivan said the US should abandon its current "sliding-scale" approach, which involves keeping two generations of chips ahead of their rivals and instead try to “maintain as large an advantage as possible”. His comments suggested that Biden intends to take a more aggressive approach than some allies expected.
The US Commerce Department and the Dutch government declined to comment. Japan's trade minister, Yasutoshi Nishimura, recently said Tokyo was in discussions with the US about how to "respond appropriately".
Martijn Rasser, an expert on technology and national security at the CNAS, said he was "optimistic" about a deal. "Japan and the Netherlands have the same strategic interests at stake and it is in their long-term interests to coordinate with Washington to manage the challenge of China and the specific military threats involved," he said.
Biden's team has been successful in convincing previously nervous European and Asian allies to take a stronger stance on China. But it's not clear whether Tokyo and The Hague, or other allies, will be willing to go as far as US officials have suggested they can.
"Because of the boldness and scale of these new controls and the allusions to more maximalist US goals to substantially contain China's technological development, these controls will challenge this theory," said Jon Bateman, technology expert at the Carnegie Endowment for International Peace.
Emily Kilcrease, a trade and security expert at the CNAS, agreed that it is unclear whether US allies will agree with the new approach outlined by Sullivan. “One wonders whether partners or allies will implement controls consistent with the new US strategy of keeping China as far behind as possible,” he said. "Does anyone else agree with this aggressive strategy?"
Masahiko Hosokawa, a former Japanese trade ministry official, said the US, Japan and EU countries, including the Netherlands, had been discussing a common framework for months before the US took its allies by surprise with a unilateral move. US officials stress that they informed allies in advance.
"The United States took the lead due to internal political circumstances and because the negotiations with Europe were taking longer than expected," said Hosokawa, who is also a professor at Meisei University.
Hosokawa went on to add that Tokyo is aligned with Washington on the bigger picture, but warned that Japanese legal constraints make it difficult for Tokyo to implement controls without international consensus.
State Department official Jim O'Brien recently told the FT that the US is "entering in-depth discussions" with Japan, Korea, the EU, Canada and the UK on the appropriate approach to addressing the China.
Another question is whether Washington will try to persuade allies to impose other controls, such as replicating the US-imposed ban on its own companies and citizens providing services to Chinese chip makers.
“The new bans will be counterproductive and even ineffective, unless the United States can convince, at the very least, the Dutch and Japanese governments to use their 'catch-all' authorities to prohibit their citizens and companies from supplying the same kinds of services and items,” said Kevin Wolf, export controls attorney at Akin Gump.
Wolf said Tokyo and The Hague would have the legal authority to impose such controls because of the link the US government has made between advanced chips and China's weapons of mass destruction programs.
“All you need is the political will to use them.”
(Excerpt from the foreign press review by eprcomunicazione )
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/gli-stati-uniti-cercano-di-coinvolgere-gli-alleati-nellassalto-allindustria-cinese-dei-chip-report-financial-times/ on Sun, 20 Nov 2022 06:38:21 +0000.