Tech Industry 'Concerned' About US Effort to Protect National Security Through Trade Restrictions, Tech Group Says

The U.S. technology industry is worried that upcoming trade restrictions could damage technological innovation and competitiveness, the Information Technology Industry Council said June 8. The U.S. should avoid imposing overboard restrictions in the name of national security, the group said, warning that export controls and other measures could harm the U.S. industrial base and lead to isolation.

The council said the global technology sector is “concerned” the U.S. is “moving to address these very legitimate risks in ways that could create unintended negative consequences for U.S. competitiveness, technological leadership, and -- ironically -- national security.” The comments came after a series of export control actions by the U.S. (see 2004270025, 2004270026, 2004270027 and 2005150058), including threats to impose trade restrictions on Hong Kong (see 2006040038).

In trying to protect U.S. national security, the U.S. could ultimately end up damaging it through measures that hinder technology innovation and exports, the council said. “Access to export markets allows firms to increase sales and profitability, which enables them to further invest in innovation,” ITI said. The same is true for inbound foreign investment, which allows the U.S. to increase tax revenue and invest further in research and development, the group said. “The U.S. government should advance trade and investment policies that allow companies to succeed commercially and thereby contribute to technological leadership,” ITI said. The U.S. has increased restrictions on foreign direct investment due to worries about Chinese technology theft (see 2005200032, 2005110008 and 2003250033).

The “majority” of technology-related business “presents no national security concerns,” the group argued, saying that current policies risk stifling technology sales and development with little payoff. Restrictions, such as export controls, should be based on “factual evidence of concrete risks” and should be “narrowly tailored … rather than applied to entire categories of technology,” ITI said. The group also said the restrictions should not be used to advance trade agendas.

The U.S. should work more closely with allies, ITI said, a concern echoed by a range of companies, industry groups and former government officials (see 1906050070, 1911070014 and 2005060017). The ITI specifically mentioned the European Union, Japan, the United Kingdom, South Korea, Canada and Australia, which all have “common approaches” to technology risks. “It is imperative that the U.S. government closely coordinate its technology-related national security policies with like-minded economies,” the group said. “Multilateral export controls … help keep critical technologies out of the hands of hostile actors and support U.S. economic interests.”

The ITI also said the U.S. should work more closely with industry. Companies should have more of an opportunity to provide input on rulemaking, the ITI said. Trade groups and lawmakers have repeatedly asked the Trump administration for public comment periods before major restrictions take effect (see 2005180032 and 2005070030). “Companies have information that governments do not have about their network operations and how they detect, manage, and defend against risks,” ITI said. “Both policymakers and industry should communicate regularly and robustly.”