US Congress Pokes China With Taiwan Defense Support, Chips Ban

Daniel Flatley and Erik Wasson
·3 min read
36

(Bloomberg) -- The US is set to pass legislation ramping up weapons sales to Taiwan and restricting government use of Chinese semiconductors, strengthening the White House’s hand while excluding measures considered most objectionable to Beijing.

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Language in the must-pass annual defense legislation reflects how lawmakers on both sides of the aisle have shown a growing willingness to confront China, despite White House concerns.

The bill, which is set to pass the House as soon as Thursday, authorizes up to $10 billion in weapons sales to Taiwan and would boost ties in ways that some in the Biden administration fear undermines the president’s ability to set foreign policy.

“The China challenge has become the most significant national security issue our nation has faced in a generation,” Senator Robert Menendez, a New Jersey Democrat, said in a statement.

The bill does ease back some of language that would have been more unpalatable to China, including earlier proposals to designate Taiwan a “major non-NATO ally.” That change was made after lobbying by the Biden administration

The Taiwan element in the 2023 National Defense Authorization Act is based on legislation he and Senator Lindsey Graham of South Carolina had circulated earlier. Menendez said that China’s military build-up, including new technologies and weapons that could be used against Taiwan, means the US needs to step up its support for the island to deter an invasion.

Rear more: Taiwan Defense Against China to Get $10 Billion Under US Bill

The legislation lands as Biden seeks to balance forceful policies aimed at China, which the US sees at its top strategic competitor, with efforts to contain their competition from spiraling into confrontation. The Senate will take up the bill next week.

Beijing criticized the bill on Thursday, with the Foreign Ministry saying in a statement that the US should “remove negative content related to China” and “stop using Taiwan to contain China.”

A recent meeting between Biden and President Xi Jinping was seen as a positive development for relations between the world’s top two economies, which had reached a low point earlier this year after House Speaker Nancy Pelosi visited Taiwan, a move that angered Beijing.

In terms of technology, the US has focused in recent years on restricting the kinds of semiconductors China’s companies can procure from the US and its allies, and by boosting its own chip manufacturing.

Washington has also attempted to restrict the use of Chinese-made technology in US devices. To that end, another provision of the NDAA will restrict the use of chips made by certain Chinese companies in items used by the military or other parts of the government.

That section was watered down after a coalition of US businesses objected to language that would have barred the purchase and use of Chinese semiconductors by any federal contractors.

The final version is more permissive regarding the use of semiconductors in equipment unless they are involved in a ‘critical system,’ according to the the text of the bill. The latest version also sets a five year deadline for compliance, and also allows the executive branch to waive the requirement.

Rear more: Senate Panel Approves Taiwan Measure That Makes Biden Uneasy

“Scores of companies and associations shared their concerns with the chamber about the original proposal, and it’s good news that the sponsors made the final version more workable,” said Matthew Eggers, vice president of cybersecurity policy for the US Chamber of Commerce.

Senator John Cornyn, a Texas Republican, said in an interview that the chips provision “definitely sends the signal that we need to not spend” on China for US technology. He said the Taiwan provision was included as deterrence to reduce the chances of China invading Taiwan.

Such an invasion would spark a regional conflict and endanger the semiconductor supply chain as well, he said.

“Anything we can do to deter that is important,” Cornyn said.

--With assistance from Roxana Tiron and Lucille Liu.

(Updates with comment from China’s Foreign Ministry.)

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