Senators aim to ban USG deals with Chinese chipmakers

From: POLITICO's National Security Daily - Thursday Nov 17,2022 09:07 pm
From the SitRoom to the E-Ring, the inside scoop on defense, national security and foreign policy.
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By Alexander Ward and Matt Berg

Sen. John Cornyn joined at right by Senate Majority Leader Chuck Schumer speaks.

Sen. John Cornyn and Senate Majority Leader Chuck Schumer got their proposal added to the Senate NDAA last month in the October managers package. Now they’re looking to finish the job. | J. Scott Applewhite/AP Photo

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With help from Connor O’Brien and Erin Banco

FIRST IN NATSEC DAILY –– Two senators are lobbying hard for a ban on U.S. government business with Chinese chipmakers, further pressuring Chinese Communist Party-tied industries and decoupling the economies of the two world powers.

According to three people familiar with the plan, Majority Leader CHUCK SCHUMER and Sen. JOHN CORNYN (R-Texas) want their colleagues to get their amendment that blocks federal access to semiconductor products and services made by Chinese firms to get into the final version of this year’s National Defense Authorization Act. The measure would broaden provisions in Section 889 that already prohibit government agencies from doing business with Chinese telecommunications companies or contractors who use their technologies.

Schumer and Cornyn got their proposal added to the Senate NDAA last month in the October managers package. Now they’re looking to finish the job.

Section 889, which first passed in the 2019 NDAA, mainly targets Chinese conglomerates like Huawei or ZTE. But the Schumer-Cornyn measure would grow the targeted list to include the Semiconductor Manufacturing International Corp., Yangtze Memory Technologies Corp. and ChangXin Memory Technologies.

The Senate and House are currently wrangling over the final version of the must-pass defense bill. Which amendments get in can launch a bruising fight between lawmakers who all want their priorities featured in the behemoth legislation. It’s unclear if Schumer and Cornyn will succeed in their effort, but there’s bipartisan support for curbing any federal government business with Chinese firms. It also helps that Schumer is the chamber’s top official.

The senators will now work with their colleagues to convince them that their amendment should make the final cut. The three people who detailed their campaign spoke to NatSec Daily on the condition of anonymity to discuss a sensitive internal debate.

YMTC in particular has come under increased scrutiny for violating export controls by continuing to supply chips to Huawei and aiming to do business with Apple . Senators from both parties, including Schumer and Cornyn , railed against the firm’s moves. Apple dropped a plan to use YMTC chips in October under immense bipartisan political pressure.

That same month, the U.S. added YMTC to the “unverified list” — which features companies the U.S. can’t reliably inspect to ensure they follow export rules — starting a 60-day clock for a much harsher penalty. The company is now at risk of going on the Entities List in December , essentially prohibiting YMTC from trade in the U.S.

Representatives for Schumer and Cornyn declined to comment for this story. YMTC and the other Chinese firms have long contended that they are in full compliance not only in the United States but around the world.

American Enterprise Institute Senior Fellow KLON KITCHEN told NatSec Daily that the lawmakers’ move was a “brilliant idea.”

“It demonstrates a bipartisan understanding of the challenges that come from China’s manipulation of markets and extension of the state,” he said, noting that YMTC has ties to the Chinese military . And, per Kitchen, it also proves to the world that the United States is serious about taking the Chinese tech challenge head-on. “These policies now transcend two administrations: One Republican, one Democrat.”

 

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The Inbox

FIRST IN NATSEC DAILY –– SENATORS SAY ERDOGAN WITHDREW FROM HALIFAX: Turkish President RECEP TAYYIP ERDOGAN was scheduled to attend this weekend’s Halifax International Security Forum but withdrew from the program citing the need to keep the Ukraine grain deal alive, two U.S. senators told NatSec Daily.

“He had been on the agenda originally, along with several other Turkish officials,” Sen. JEANNE SHAHEEN (D-N.H.), who is co-leading a congressional delegation to the conference, said in an interview. Russia and Ukraine just agreed to extend the deal , a resolution brokered by Turkey and the United Nations.

However, Sen. JIM RISCH (R-Idaho), the other co-lead and ranking member of the Senate Foreign Relations Committee, said Erdogan likely didn’t want American lawmakers berating him for holding up Sweden and Finland’s accession to NATO. “I suspect he doesn’t want us using the rubber hose on him,” Risch said. In other words, it’s possible the grain deal isn’t the only reason Erdogan is missing out on Halifax’s famous lobster dinner.

The autocratic leader of a NATO country at a conference billed as the world’s foremost democratic conference would’ve been quite the sight in Canada. One could imagine he would’ve used the opportunity to meet with Defense Secretary LLOYD AUSTIN, the U.S. congressional delegation and other foreign leaders while in Halifax.

But, alas, they, the conference goers, and NatSec Daily won’t get to see Erdogan in action.

The Turkish Embassy in the U.S. didn’t respond to an immediate request for comment.

NO PEACE UNTIL CRIMEA, DONBAS RETURNED: The Russian-occupied regions of Crimea and the Donbas must be returned to Ukraine before any Kyiv-Moscow peace deal, Ukrainian President VOLODYMYR ZELENSKYY told the Bloomberg New Economy Forum in Singapore virtually from Kyiv.

“Unless we liberate our whole territory, we will not bring peace,” he said. One of Zelenskyy’s 10 conditions to a brokered agreement is that all Russian-seized Ukrainian lands once again come back under Kyiv’s control.

In the same interview with Bloomberg’s Editor in Chief JOHN MICKLETHWAIT , Zelenskyy softened his insistence that a Russian missile errantly killed two Polish people inside the NATO country. “I don’t know 100 percent — I think the world also doesn’t 100 percent know what happened,” he said, maintaining that it was likely a Russia-fired weapon and not a Ukrainian anti-defense missile launched to bring it down.

Zelenskyy’s comments come after President JOE BIDEN said the evidence points toward the projectile coming from Ukraine, not Russia. National security adviser JAKE SULLIVAN had also been in touch with Zelenskyy’s office shortly after the deadly incident to urge more caution in how Kyiv was speaking about it.

Our own ERIN BANCO confirmed that House Intelligence Committee members have been briefed on the latest developments in Poland. U.S. intelligence says the missile was an SA-10 and fired from Ukraine. There was at least one missile, but possibly more.

The Washington Post’s JOHN HUDSON first reported the SA-10 news .

A U.S. official also told Erin that CIA Director BILL BURNS had previously scheduled meetings with Polish officials on Wednesday, including President ANDRZEJ DUDA. They discussed the current situation and the director reaffirmed the U.S. commitment to providing support to Ukraine, thanking Poland for continued its partnership.

RUSSIA HITS UKRAINIAN ENERGY: Russian missiles struck energy facilities as the first snow of the season fell in Ukraine on Thursday, a foreboding sign of the coming winter as Ukrainian leaders warn Western allies that it can’t manage such attacks anymore.

At least four people were killed and more than a dozen were injured in the missile and drone strikes that bombarded the country, the Associated Press’ JOHN LEICESTER reports . It appeared to be less intense than the nationwide bombardment on Tuesday, which was described as the largest attack during the war yet.

In past weeks, Moscow has increasingly targeted Ukraine’s energy infrastructure, successfully knocking out power and heat to millions of residents. With colder temperatures coming, Ukraine has asked its American and European counterparts for help preparing for a prolonged period with limited electricity and gas — a scenario Kyiv expects to complicate fighting on the ground and displace civilians.

IT’S THURSDAY: Thanks for tuning in to NatSec Daily. This space is reserved for the top U.S. and foreign officials, the lawmakers, the lobbyists, the experts and the people like you who care about how the natsec sausage gets made. Aim your tips and comments at award@politico.com and mberg@politico.com , and follow us on Twitter at @alexbward and @mattberg33 .

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A message from Lockheed Martin:

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Flashpoints

3 GUILTY IN MALAYSIAN AIRLINES CASE: Three men linked to the Russian military were found guilty and sentenced to life in prison today for the downing of Malaysian Airlines flight MH17 over Ukraine in 2014, the Financial Times’ CHRISTOPHER MILLER reports .

The Boeing 777 was headed from Amsterdam to Kuala Lumpur when a Russian surface-to-air missile exploded near the cockpit, causing a crash that killed 298 passengers and crew, including 80 children.

A panel of Dutch judges found Russians IGOR “STRELKOV” GIRKIN, SERGEY DUBINSKY and Ukrainian LEONID KHARCHENKO guilty of murder, while another Russian, OLEG PULATOV, was acquitted due to lack of evidence. The verdict in the two-and-a-half-year trial could set a precedent as Ukraine pursues legal action for crimes committed during Russia’s invasion of the country and its prior annexation of Crimea.

Keystrokes

QATAR OFF THE HOOK: The home squad at the 2022 World Cup is not likely to fare well on the field, but at least when it comes to cyber, the hosts might get lucky off it, our friends over at Morning Cybersecurity (for Pros!) report .

While world sporting events have become a popular target for nation-state and criminal hackers alike, Qatar has few adversaries with a clear motive to disrupt the games, researchers from the cybersecurity firm Recorded Future assess in a report out this morning .

Meanwhile, the Russians, the country most likely to play spoiler in Doha, are likely spread too thin with the war in Ukraine to plan much cyber mischief elsewhere.

The Complex

MOONBOUND: The uncrewed Orion spacecraft is on its way to the moon after it was sent aloft Wednesday by the Space Launch System rocket on NASA’s Artemis I mission, ushering in a new chapter in deep space exploration, our friends at Morning Defense (for Pros!) report .

The Lockheed Martin-built capsule is expected to fly by the moon Monday, “performing a close approach of the lunar surface on its way to a distant retrograde orbit, a highly stable orbit thousands of miles beyond the moon,” the space agency said.

“This successful launch means NASA and our partners are on a path to explore farther in space than ever before for the benefit of humanity,” said JIM FREE , NASA deputy associate administrator for the Exploration Systems Development, in a statement.

On the Hill

‘SPEED DATING’ IN HALIFAX: Before telling NatSec Daily about Erdogan, Shaheen and Risch detailed what they aim to do in Halifax this weekend.

They said they planned to meet counterparts from Canada, Ukraine, Taiwan, Sweden and many other countries. “I view this kind of like speed dating,” Risch said, adding that the senators do more high-level meetings during the weekend than they tend to hold in weeks.

The senators plan to talk about the kinds of weapons and other support Ukraine needs during their conversations. When asked about the errant missile in Poland, both lawmakers said Russia was ultimately at fault for forcing Ukraine to have to launch anti-defense missiles.

“This would not have happened without Russia’s unprovoked, atrocious war in Ukraine. Regardless of whose missile it was, Russia is ultimately at fault,” Shaheen said, echoing a Biden administration line.

 

Tune in as international security leaders from democracies around the world discuss key challenges at the 14th annual Halifax International Security Forum live from Nova Scotia. As an official media partner, POLITICO will livestream the conversation beginning at 3 p.m. on November 18. The full three-day agenda is here .

 
 
Broadsides

BLINKEN: YES, WE TALK TO KYIV: Secretary of State ANTONY BLINKEN lashed back at claims that Washington’s disagreement with Ukraine over the origin of the missile that landed in Poland underscored a lack of communication between the two countries, Hudson also reported for the Post .

“We’ve been in regular contact with our Ukrainian partners throughout. I spoke to my Ukrainian counterpart. … We’re sharing the information that we have and, again, the investigation is ongoing,” Blinken told reporters at the Asia-Pacific Economic Cooperation forum in Thailand on Thursday.

Ignoring a question about whether the disagreement brings the credibility of Ukraine’s claims of a Russian strike into question, Blinken pivoted, blaming Moscow for its ongoing missile strikes against Ukraine, which the smaller nation has scrambled to defend against.

 

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Transitions

— FIRST IN NATSEC DAILY: ANDY OARE has joined the data and cybersecurity startup Shift5 as their head of federal marketing. He most recently was director of digital media at DoD.

— FIRST IN NATSEC DAILY: JASON BEARDSLEY will serve as the senior coalitions adviser for Concerned Veterans for America. He will also work with DAN CALDWELL at Stand Together as director of veterans’ initiatives.

Retired Air Force Major Gen. ERIC HILL is now executive VP of defense programs for J.A. Green & Company. He previously was deputy commander of the U.S. Air Force’s Special Operations Command.

What to Read

— MICHAEL ALLEN, POLITICO: Republicans Don’t Have to Write a ‘Blank Check’ for Ukraine

— STACIE PETTYJOHN and HANNAH DENNIS, Center for a New American Security: Precision and Posture: Defense Spending Trends and the FY23 Budget Request

— JONATHAN GUYER, Vox: Why America can’t seem to quit Saudi Arabia

Tomorrow Today

— The George Washington University Elliott School of International Affairs, 10 a.m.: "Russia's New Emerging State Ideology"

— The Center for a New American Security, 10:30 a.m.: "Recruitment, Retention, and Quality of Life in the Force"

— The American Enterprise Institute for Public Policy Research, 2 p.m.: "The Peacemaker: RONALD REAGAN, the Cold War, and the World on the Brink"

Have a natsec-centric event coming up? Transitioning to a new defense-adjacent or foreign policy-focused gig? Shoot me an email at award@politico.com to be featured in the next edition of the newsletter.

Thanks to our editor, Heidi Vogt, who would ban us from ever writing again if she could.

And we thank our producer, Kierra Frazier, who is welcome anywhere.

A message from Lockheed Martin:

LMXT: Competitive capabilities for America’s next strategic tanker.

The LMXT aircraft delivers proven capabilities for the U.S. Air Force’s increasing aerial refueling missions. One of the LMXT’s discriminating capabilities is its refueling system, which includes a fly-by-wire aerial refueling boom. Learn more.

 
 

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