Panamanian President Laurentino Cortizo and Secretary of Commerce, Gina Raimondo (in green), meet in Panama July 20, 2023, accompanied by the commander of US Southern Command, Army Gen. Laura Richardson. (Photo courtesy US Embassy Panama)
REAGAN NATIONAL DEFENSE FORUM — Secretary of Commerce Gina Raimondo today stressed the need to tighten export controls, and even more importantly their enforcement, to prevent China from outpacing the US in emerging technologies like artificial intelligence (AI).
Specifically, Raimondo used a keynote at the annual Reagan National Security Forum in Simi Valley, Calif. to call on Congress for more funds to beef up the department’s enforcement arm, the Bureau of Industry and Security (BIS).
“We’re a couple of years ahead of China. No way are we gonna let them catch up. We cannot let them catch up. So we’re gonna deny them our most cutting edge technology,” she said. “I’ll tell you, this stuff — when I say this stuff, I mean supercomputing, AI technology, AI chips — in the wrong hands is as deadly as any weapon that we could provide. And so we have to be serious if we’re going to meet that threat, serious about enforcement.”
Raimondo reminded the audience that it has long been the case that America’s national security rests upon economic security.
“I think everybody here knows the fact that our national defense is more than guns, missiles, tanks and drones. It’s technology, it’s innovation. … You cannot be a strong nation that defends itself unless you have the most competitive economy in the world,” she said. “Economic prosperity and opportunity matters every bit as much as pure military might. To protect our national security is to stay in our place in the world.”
While that has always been true, Raimondo said advanced modern technology “is more important than ever to our national security,” she said. “So as our military apparatus depends more more on technology — whether that is artificial intelligence, spectrum strategy, supercomputing, cybersecurity, semiconductor — it’s technology that matters more to our national security, and to the Commerce Department.”
Raimondo noted that she has been working hand-in-glove with Secretary of Defense Lloyd Austin and senior military commanders in the field.To that end, in July she traveled to Panama with Gen. Laura Richardson, head of US Southern Command, and is planning to accompany Adm. John Aquilino, head of US Indo-Pacific Command, to the Philippines next year.
“This is game on, game on,” she said, stressing that Commerce is “at the red hot center” of the technology aspect of national defense: running the Biden administration’s AI policy, managing export control and leading on the new White House spectrum strategy.
Raimondo said that the administration is “building a more muscular Commerce Department to take on these challenges,” but lamented the fact that BIS “has the same budget today as it did a decade ago” despite the increasing challenges and workload.
“I have a $200 million budget. That’s, like, the cost of a few fighter jets. Come on! If we’re serious, let’s go fund this operation like it needs to be funded so we can do what we need to do to protect America,” she exhorted the crowd — especially the lawmakers in attendance, who are still in ongoing negotiations about the federal budget.
Raimondo explained that the Commerce Department already has been shifting its strategy from a company-by-company approach towards blocking tech sales, in order to avoid having to play “whack-a-mole” to beat China’s ability to simply clone new firms.
“The nature of the threat is changing. And we need to therefore change our strategy,” she said. “I think we’re getting more serious about countrywide controls” that deny “a certain class of technology” across the board, she said. “We’re taking a very aggressive, innovative approach.”
However, Raimondo stressed that the US cannot win the race against China in militarily relevant technology arenas without getting allies and partners on its side.
“I can’t say it enough: we have to get even more serious about working with our allies. It’s not okay if we deny China something, and the Japanese and the Germans are selling them component parts to make a EUV tool. Not okay,” she said. (EUV, extreme ultraviolet lithography tools, are used to create semiconductor chips.)
CHIPS Act Announcement ‘Really Soon’
On the other side of the technology equation, Raimondo explained, Commerce is working to help strengthen the industrial base and increase domestic capacity to securely support Pentagon needs. She said she is hoping “really soon” to be able to make an announcement about the first grants to US semiconductor manufacturers under the “Creating Helpful Incentives for Producing Semiconductors,” or “CHIPS & Science Act.”
The bill, passed in July, authorized $280 billion for technology and research and development over five years, with $39 billion allocated for increasing domestic manufacturing.
“I’d love to make an announcement for the end of the year. And then [a] continued stream of announcements in the first quarter first half of next year,” Raimondo said.
However, she cautioned that not every company that has applied for the CHIPS Act money will receive awards — stressing that the focus will be on expanding on-shore manufacturing of advanced chips for national security purposes and not just jobs creation.
“I’m going to be in the business of dishing out disappointment. Because there’s just not enough money. We only have $39 billion for these company incentives, and I have a national security mission that I must meet,” she said. “Fundamentally, this is a national security initiative.”
