US closes some tech export control loopholes; Support for private business; DeepSeek

Summary of today’s Essential Eight:

1. US Department of Commerce closes some PRC export control loopholes - In its first significant China export controls-related action since President Trump’s inauguration, this afternoon the US Department of Commerce announced:

Today, the Department of Commerce’s Bureau of Industry and Security (BIS) added 80 entities to the Entity List from China, the United Arab Emirates (UAE), South Africa, Iran, Taiwan, and others for activities contrary to U.S. national security and foreign policy. As part of these measures, BIS is working toward the following objectives:

Restrict the Chinese Communist Party’s (CCP) ability to acquire and develop high-performance and exascale computing capabilities, as well as quantum technologies, for military applications;

Impede China’s development of its hypersonic weapons program;

Prevent entities associated with the Test Flying Academy of South Africa (TFASA) from using U.S. items to train Chinese military forces;

Disrupt Iran’s procurement of unmanned aerial vehicles (UAVs) and related defense items; and

Impair the development of unsafeguarded nuclear activities and ballistic missile program.

The action closes known loopholes remaining from the Biden Administration on sales of chips to Inspur and Sugon, which will hit revenue for big US chip firms. Inspur was entity-listed in 2023 as Inspur Group, but the rules left out subsidiaries. Those have been added with this update, and the whole complex will now be subject to the Foreign Direct Product Rule (FDPR). Sugon subsidiary Suma and effective cutout Nettirx, which was featured in a New York Times article last year talking about how it was exploiting loopholes, is also listed now. Why then-Commerce Secretary Raimondo and her BIS refused to close these known loopholes is a question worth asking.

BIS also added Beijing Academy of Artificial Intelligence and Beijing Innovation Wisdom Technology Co., Ltd. to the Entity List, for “acquiring and attempting to acquire U.S.-origin items in support of China’s military modernization. Specifically, these entities have developed large artificial intelligence (AI) models and advanced computing chips for defense purposes.”