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Biden signs order to protect U.S. military edge in advanced tech

The White House is restricting certain investment in cutting-edge tech to make sure it keeps its military advantage.
Biden signs order to protect U.S. military edge in advanced tech
Posted at 7:44 PM, Aug 09, 2023

President Biden signed an executive order Wednesday to protect the military edge the U.S. can gain from advanced new technologies, warning that countries like China are always looking for ways to keep up.

The order establishes new guards against countries that "seek to develop and exploit sensitive or advanced technologies and products critical for military, intelligence, surveillance, or cyber-enabled capabilities."

The White House is trying to strike a balance between the benefits of foreign investment, and the risks of compromising national security or the country's military edge. Senior administration officials described the order as a national security action, rather than economic one. 

The order directs the Department of the Treasury to set up a program that will track or prohibit certain investment in foreign countries, as it relates to certain high-security technologies and products.

According to the order, these technologies include "semiconductors and microelectronics, quantum information technologies and certain artificial intelligence systems." The U.S. considers these "critical to military modernization."

In the order, President Biden called out China as an example of a country that's exploiting U.S. investment and the market access it brings to develop its own technologies. While the U.S. already restricts much of the export of sensitive tech to China, the oder would go further and cut off broader investments that might "accelerate the indigenization of these technologies" in China.

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Administration officials said they worked with other countries, including China, to set up the new restrictions. They're aiming for what they call a "small yard, high fence" approach, to keep the new rules focused only on these risky technologies.

"One of the things that we have made clear to [China] repeatedly in all of our engagements with them is that we will continue to say things and we will continue to do things — taking policy actions that they object to," said State Department Spokesperson Matthew Miller. "But we will do that because we believe it is in the national security interest of the United States."

Some Republicans have criticized the measure. Sen. Marco Rubio said the new rules contained too many loopholes, and held the view that it wouldn't do enough to protect national security. Other Republicans like House Financial Services Committee Chairman Patrick McHenry, of North Carolina, indicated they would make new legislative efforts to secure national technology interests.

The Treasury Department will issue advanced notice of proposed rulemaking before its program goes into effect, which will lay out the specifics of its program and give stakeholders and the public time to weigh in. Some exceptions to the final rule are expected, which the Treasury Department said could potentially include publicly traded instruments and intracompany transfers. 

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The order comes on the one year anniversary of President Biden signing the CHIPS and Science Act, which aimed to bolster the supply chain and national security, and lessen reliance on other countries for semiconductors. It came after the U.S. experienced severe disruptions in the supply chain during COVID, impacting the availability of electronics and cars.  

One year in, the White House touts more manufacturing and job creation through it. Biden calls it a key part of his ‘Bidenomics’ agenda, which he is highlighting in a three state tour this week. It comes as the White House continues efforts to show the impact of landmark legislation as it’s implemented, but still faces headwinds in recent polling on the economy.  

"Our plan is working. It's working. The economy has grown since I took office. It grew faster in the last quarter than anyone expected. And, you know, we've created over 13 million brand new jobs since I took office, 13 million in less than three years. 90,000 new jobs right here in New Mexico. 800,000 manufacturing jobs nationwide, 800,000. I know you're tired of hearing me say this but where is it written that America can't lead the world again in manufacturing because we're going to do just that — the leading manufacturer in the world,” said Biden. 

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