Toomey Says WH Has 'Strong Case' for Semiconductor Export Controls
The top Republican on the Senate Banking Committee, Sen. Pat Toomey, R-Pa., said the administration has "a strong case for what they're doing" in restricting U.S. technology that aids the Chinese semiconductor industry (see 2210070049), but he questions how effective it will be unless the Netherlands and Japan go along.
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"We have a dominant position but we don’t have an exclusive position" in making semiconductor fabrication equipment needed to make advanced chips, Toomey said at an Oct. 12 event at the Council on Foreign Relations.
Toomey said he's not sure where the administration is in the process of trying to get Japan or the Netherlands to stop selling this kind of equipment to China. Officials with the Bureau of Industry and Security have said they are prioritizing discussions with U.S. allies to convince them to impose similar controls.
"Let’s be candid. It’s a significant escalation in the tension back and forth between the United States and China," Toomey said.
Toomey was also asked about how effective sanctions have been in changing Russian President Vladimir Putin's decisions in his invasion and war in Ukraine.
"I think the reality we have to confront is that sanctions have not been able to change Putin's behavior," he said, either to deter the invasion, or after the war began. "Having said that, I think they are necessary," he said.
But, he said, because Russian oil and gas are not part of the Europeans' sanctions package, there is a massive gap in the strategy.
"I am modestly encouraged by the negotiations among the G-7 to have a regime that will attempt to cap the price on [Russian] oil. I hope it works," he said. But he questioned whether it would work without secondary sanctions on companies that facilitate sales outside the G-7 members.
Toomey acknowledged that secondary sanctions are a blunt weapon. "I understand that concern," he said. "I think the circumstances outweigh that."
The senator, who is retiring at the end of the year, said it's problematic that "President Trump significantly undermined what had been the Republican consensus in favor of liberalizing trade."
Because of the political support for protectionism, Toomey said he worries that either an outbound investment screening statute (see 2209290043) or future export controls could be used to protect U.S. firms more than protect U.S. security interests.
"We’ve got a lot of folks in government … who are very openly protectionist," he said, and added that there are senators who would like to ban any American citizen's investment in any company in China.
"I want to make sure that any kind of outbound [Committee on Foreign Investment in the U.S.] power is very narrowly prescribed," he said, adding that he's not sure there's a strong case for doing it at all.