Senator Lays Out Strategy for Targeted Decoupling With China in New Report

Sen. Tom Cotton (R-AR) questions President-elect Joe Biden's nominee for Secretary of Defense, retired Army Gen. Lloyd Austin at his confirmation hearing before the Senate Armed Services Committee at the U.S. Capitol in Washington, on Jan. 19, 2021. Greg Nash-Pool/Getty Images

Sen. Tom Cotton (R-Ark.) is calling for the United States to disentangle from the Chinese regime, as it continues to steal U.S. intellectual property and spy on Americans, according to a new report compiled by his office.

“The will and need to confront communist China is growing. Now it’s time for action,” said Cotton in a speech at the Reagan Institute on Feb. 18, where he also unveiled his report titled, “Beat China: Targeted Decoupling and the Economic Long War.”

He called for the decoupling of U.S. and Chinese sectors that are critical to the economy, “in order to exploit the leverage we have over China and minimize its leverage over us.”

Those areas include artificial intelligence, critical minerals, entertainment, higher education, investment, medicine and medical equipment, telecommunications, and semiconductors.

Cotton explained that the United States needed to now confront the Chinese Communist Party (CCP)—a regime that seeks to replace the United States as “the world’s great power”—because previous administrations had “failed, flawed policies over the last 30 years, pursued by both parties.”

He especially pointed to the United States’ granting of permanent normal trade relations status to China, done under President Bill Clinton. The move paved the way for Beijing to join the World Trade Organization in December 2001.

Cotton said the status should be revoked and an old system adopted whereby “the president and Congress reviewed China’s trade privileges each year in light of its progress on human rights.”

He also praised the former Trump administration for laying the groundwork for targeted decoupling from China through policies that sought to stem Beijing’s malign influence.

“[H]is administration pursued a campaign to harden our defenses against China’s aggressive behavior, and to sound the diplomatic alarm around the world … and it ought to form the starting point for a long-term, bipartisan national strategy,” according to the report.

Targeted Decoupling

At the top of Cotton’s strategy is a focus on semiconductors, which are tiny chips that power everything from smartphones to missiles. The report pointed out that current export bans on certain Chinese firms, including placing Chinese chipmaker SMIC on a trade blacklist, were not enough.

Cotton recommended that the U.S. government “ban the sale of cutting-edge semiconductors developed or produced with U.S. software or technology to all Chinese entities.”

Additionally, to prevent Chinese firms from circumventing the proposed ban, Cotton stated that there should be an export ban on U.S. electronic design automation (EDA) tools to Chinese end-users.

EDAs are software used to design integrated circuits and semiconductors. Currently, EDA development is dominated by American companies such as Cadence and Synopsys.

“Semiconductor machinery and software design tools represent significant choke points which can slow Chinese semiconductor efforts,” according to the report.

“Delaying the progress of China’s semiconductor industry by even a few years would impose immense hardship on the CCP and protect American commercial and military advantages,” the report added.

Cotton also recommended the creation of a “semiconductor trading bloc.” Countries joining the bloc could pool together resources for research and development and establish a “multilateral export-control regime against China,” according to the report.

Protecting US Campuses

“Methodical” Chinese theft of U.S. technology has helped Chinese firms beat American businesses with cheap knockoffs while facilitating the rise of China’s military to become the second-most powerful in the world, according to the report.

Action is necessary to “end China’s ability to freeride off stolen research” from American universities and force China to invest in its own basic research, the report said.

It calls on the United States to bar Chinese funding into U.S. research institutions and require greater transparency on schools’ source of funding; restrict university staff from taking Chinese payouts—whether it be from recruitment programs, grants, or travel—or else withhold federal grants; block Chinese nationals from doing peer reviews on U.S. government-funded research; end joint research ventures with China; and lastly, end the 10-year multi-entry visa program for Chinese nationals and keep Chinese students out of the sensitive STEM (science, technology, engineering, and mathematics) fields.

The 10-year visa program began in 2014 under the Obama administration, despite objections from intelligence officials over its potential for enabling intelligence transfer into China, according to the report. In December last year, the State Department revised visitor visa rules for CCP members and immediate families, cutting their maximum duration of stay from 10 years to one month.

Such measures will likely be met with pushback, the report concedes. Objections to academic decoupling may arise, owing to institutions’ “politically correct culture,” existing dependence on tuition from Chinese students, or lack of funding.

To mitigate potential resistance, the U.S. government should explain the grave threats and reward cooperation, the report recommended.