House Republicans Question Raimondo on Semiconductors and China Trade Relations

House Republicans have pushed for reassurances that the Biden administration’s Commerce Department is keeping American interests at the forefront in dealing with technological advancements and the use of semiconductors in national defense technology.

In a Sept. 19 hearing held by the House Committee on Science, Space, and Technology, U.S. Commerce Secretary Gina M. Raimondo was questioned by lawmakers about the Department of Commerce's work in implementing provisions related to semiconductors under the CHIPS and Science Act.

Rep. Michael Garcia (R-Calif.) initiated the discussion, emphasizing the significance of addressing the ongoing trade disputes with China. He underscored China's status as the most significant threat to the United States and stressed the need for a reciprocal trade agreement.

“China is doing to us right now things that we should not tolerate. But if we're going to allow them to do it, we should at least be able to do it to them and have access to their markets, their intellectual property; the agreement should be fair and balanced and reciprocal.”

Ms. Raimondo echoed a similar sentiment, emphasizing the need for reciprocity with China. She cited examples of disparities, such as Alipay and UnionPay doing business in the United States while Visa and MasterCard face restrictions. Additionally, autonomous vehicle companies from China operate on American roads, and U.S. media companies struggle to gain access to the Chinese market.

The commerce secretary conveyed her determination to level the playing field in U.S.-China trade relations, emphasizing that "enough is enough."

She cited the Department issued a proposed rule, “Preventing the Improper Use of CHIPS Act Funding,” which would impose guards by "limiting the expansion of semiconductor manufacturing in foreign countries of concern" and "limiting joint research or technology licensing efforts with foreign entities of concern."

According to Ms. Raimondo, her department intends to finalize the rule later this year.

The discussion also touched on the importance of aligning semiconductor chip production with the defense industrial base. Mr. Garcia raised concerns about ensuring that the semiconductor industry supports defense requirements.

Mr. Garcia said he wanted to “make sure that we're porting over the requirements list to the DoD applications because it would be a terrible thing to build semiconductor chips for refrigerators and cars, only to find out that we have no industrial base to service, the hypersonics—the exotic weapons that we need in a fight against China.”

Ms. Raimondo commended U.S. Treasury Secretary Janet Yellen and her department for their efforts in challenging circumstances. She emphasized that her focus was on export controls and acknowledged the ongoing battle against Russian attempts to circumvent sanctions.

Ms. Raimondo highlighted the vigilance required to counter Russia's efforts.

"The thing I'm focused on is the export controls," Ms. Raimondo said. "I'll be honest, it is a brutal day-to-day fight. Every time we find out that they're going around or export controls. We come down on them, but it's a little like a whack-a-mole.

"Russia has been putting these net global networks together for decades there. They're good at getting around us. And I'd like to think we're even better about stopping it."