Senators Warren and Hawley Agree on China Controls

Sens. Elizabeth Warren (D-Mass) and Josh Hawley (R-Mo) are calling on the Commerce Department to beef up export controls on China.

In a Feb 3 letter to Commerce Secretary nominee Howard Lutnick, the two members of the Banking Committee said the Administration needs to strengthen export controls and close regulatory loopholes that are undercutting US technology leadership against challenges from China.

The two senators offered specific steps to strengthen export controls, including

• fortifying the artificial intelligence diffusion rule,
• restricting H20 and equivalent chips,
• clamping down on chip smuggling and
• adding Changxin Memory Technology to the Entity List.

“While many of the implications of the DeepSeek breakthrough remain unclear, one takeaway is beyond dispute: DeepSeek is an export control failure,” they wrote.

“DeepSeek needed a large cache of advanced US AI chips, including Nvidia’s H800 and possibly the more advanced H100,3 to train its model,” they continued.

“These chips are currently prohibited from the People’s Republic of China (PRC) under US export controls, and DeepSeek should not have been able to acquire them. But because the Commerce Department bowed to corporate lobbying and failed to close an export control loophole in a timely manner, PRC companies like DeepSeek were able to accumulate a large number of these chips to train AI models.”

Proposals for Commerce

The two lawmakers proposed Commerce should:

• Strengthen the AI Diffusion Rule: The rule, published in January, proactively addressed the range of diversionary tactics PRC companies could use to get around our controls, but Nvidia and other tech giants have come out against the rule and are urging the Trump Administration to weaken it or roll it back entirely.
• Restrict the H20 and equivalent chips: Nvidia and other chipmakers continue to sell advanced AI chips for deploying already-trained AI models to the PRC, which are essential to the PRC’s AI ambitions.
• Clamp down on chip smuggling: We must issue commonsense know-your-customer rules so companies in the United States are not doing business with cutout companies that can easily be identified as aliases of already-blacklisted PRC military companies.
• Adding Changxin Memory Technology to the Entity List: Domestic PRC chipmaker CXMT, with the help of US companies, has made breakthroughs in advanced memory, which will allow it to produce high-bandwidth memory, which is a key component in advanced AI chips.

The senators also called on Mr. Lutnick to review the ways that DeepSeek procured advanced US AI chips in spite of US export controls and take necessary steps to close those loopholes.

[Link to letter]