A coalition of defense, tech and business trade groups is pushing back on an effort by Senate Majority Leader Chuck Schumer (D-NY) and Sen. John Cornyn (R-TX) to include a ban on U.S. government business with Chinese chip makers in the final version of the annual defense policy bill. In a letter Tuesday to the top lawmakers on the Senate Armed Services Committee, Jack Reed (D-RI) and Jim Inhofe (R-OK), the groups argued the amendment is vaguely worded and would impose “tremendous compliance burdens” on government contractors and grant or loan recipients.
The groups included CTIA, NCTA, the Aerospace Industries Association, Defense Industrial Association, and the U.S. Chamber of Commerce, notes Politico. They took issue with how targeting Chinese chipmakers would impact an existing ban on agencies “contracting with a provider that ‘uses’ … any covered equipment or services in its supply chains even if the provider does not know that the covered technology is being used for governmental or commercial work,” the coalition wrote. Members contend there is no federal or regulatory definition for the term and warned there isn’t enough time to fix the issues.
The groups assert the language also “could require entities that do business with the U.S. government to trace their entire supply chain … regarding every item of equipment used anywhere in a contractor’s enterprise.” They say that places burdensome compliance and certification requirements on both contractors and the government.
A Senate source countered that the amendment is a logical next step to the chip R&D subsidies signed into law earlier this year aimed at reducing dependence on foreign-made and especially Chinese-made semiconductors. The letter signatories backed legislation for those subsidies, the source told Politico.
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