Key Public Policy Developments Around the World
January brought several significant, long-awaited developments in the U.S. semiconductor policy space, marking an inflection point in how the Administration is deploying trade tools to advance national security and industrial policy objectives.
On January 14, 2026, the White House issued Presidential Proclamation 11002 (the “Proclamation”) and an accompanying Fact Sheet adopting …
Critical minerals have received a surge of attention recently, much of it tied to China’s dominance of extraction and processing and recent application of export controls on minerals with defense applications. Policy discussions tend to focus on “critical minerals” collectively, but it is important to distinguish those needed for agriculture and transportation from those needed for national security. Every mineral deemed essential for U.S. national security, economic security, and supply chain resilience and included on the official list of critical minerals maintained by U.S. Geological Survey list is important for its own reasons, but there are a few elements whose looming shortage now borders on an emergency, requiring extra focus from policymakers. Certain “heavy” rare earth elements are among them.Continue Reading Heavy Rare Earth Elements: Rising Supply Chain Risks and Emerging Policy Responses
On January 13, 2026, the U.S. Commerce Department, Bureau of Industry and Security (“BIS”) issued a final rule, titled Revision to License Review Policy for Advanced Computing Commodities (the “BIS Rule”), that implements a more favorable license application review policy for exports from the United States of certain advanced computing…
Continue Reading U.S. Commerce Department Revises License Review Policy for Exports of Certain Advanced Computing Commodities to China and MacauAfter passing the House the preceding week, the National Defense Authorization Act for Fiscal Year 2026 (FY 2026 NDAA) passed the Senate on December 17 by a vote of 77-20 and was signed into law by President Trump the following day. As is frequently the case, this annual “must pass”…
Continue Reading New Sanctions Authorities in the FY 2026 NDAAThere is broad consensus among Western policymakers that China’s near monopoly on critical minerals represents an urgent strategic vulnerability for the United States and its allies. China processes over 90 percent of the world’s rare earth elements (REE), a subset of critical minerals, raising concerns that it will use its dominance to advance geopolitical goals. China processes about 80 percent of the world’s lithium and the same percentage of the world’s lithium batteries, at a time when demand for the metal has skyrocketed. As the West looks to reduce dependency on Chinese supply chains, success will require escaping policy silos and pursuing a comprehensive strategy rooted in domestic investment, international partnerships, regulatory reform, and sustained will.Continue Reading Made in America: The Outlook for Critical Minerals
Last month, DeepSeek, an AI start-up based in China, grabbed headlines with claims that its latest large language AI model, DeepSeek-R1, could perform on par with more expensive and market-leading AI models despite allegedly requiring less than $6 million dollars’ worth of computing power from older and less-powerful chips. Although some industry observers have raised doubts about the validity of DeepSeek’s claims, its AI model and AI-powered application piqued the curiosity of many, leading the DeepSeek application to become the most downloaded in the United States in late January. DeepSeek was founded in July 2023 and is owned by High-Flyer, a hedge fund based in Hangzhou, Zhejiang.
The explosive popularity of DeepSeek coupled with its Chinese ownership has unsurprisingly raised data security concerns from U.S. Federal and State officials. These concerns echo many of the same considerations that led to a FAR rule that prohibits telecommunications equipment and services from Huawei and certain other Chinese manufacturers. What is remarkable here is the pace at which officials at different levels of government—including the White House, Congress, federal agencies, and state governments, have taken action in response to DeepSeek and its perceived risks to national security.
Federal Government-Wide Responses
While the details of the bill have not yet been unveiled, any future DeepSeek prohibition could be extended by the FAR Council to all federal contractors and may not exempt commercial item contracts under FAR Part 12 or contracts below the simplified acquisition (or even the micro-purchase) threshold, similar to other bans in this sector. Notably, such a prohibition may leave contractors with questions about the expected scope of implementation, including the particular devices that are covered.Continue Reading U.S. Federal and State Governments Moving Quickly to Restrict Use of DeepSeek
Barely noticed in the firehose stream of presidential activity since the inauguration was a brief Oval Office mention of cutting a deal with Ukraine for access to its critical minerals. Securing steady access to uranium, the rare earth elements, and other critical minerals is a natural priority for an America First agenda, so President Trump’s February 3 statement is unlikely to be his last. Changes to the tax code, permitting reform, regulatory incentives, and partnerships with allies as well as troubled nations are among the actions to watch for.
A Bipartisan Issue
Leaders of both parties agree that action is needed. “Whether it’s critical minerals with China … or uranium from Russia, we can’t be dependent on them,” Secretary of the Interior Doug Bergum asserted in his confirmation hearing. “We’ve got the resources here. We need to develop them.” Virginia Senator Mark Warner (D, VA) recently charged, “China dominates the critical mineral industry and is actively working to ensure that the U.S. does not catch up.” He urged, “The U.S. must, alongside allies, take meaningful steps to protect and expand our production and procurement of these critical minerals.” President Biden’s State Department was even more blunt, asserting that China is intentionally oversupplying lithium to “lower the price until competition disappears.”
Several recent developments have increased U.S. policymakers’ concerns about future supplies of critical minerals. New technologies, including artificial intelligence, promise to dramatically boost demand. China, meanwhile, is using new export control laws to curtail exports to the United States. A resurgent war in the eastern provinces of the Democratic Republic of the Congo (DRC), ostensibly over tribal rivalries, is actually a fight over the country’s rich mineral resources. These include gold and diamonds, but also coltan, an ore from which tantalum is extracted. Tantalum is extremely valuable for its use in the capacitors found in smartphones, laptops, and medical equipment.
The number of minerals in question (51), the usual number of steps in the production chain (4), and the variety of international agreements, public laws, private initiatives, and emerging technologies add up to a dizzyingly complex set of issues. Nevertheless, the bipartisan alignment evident in the above statements signals that impacted industries should watch closely for fast-moving legislative and regulatory developments.
Market Overview
Critical minerals are essential for a long list of industrial and defense-related needs. Attention is often focused on the 17 ‘rare earth elements,’ (REEs) but the U.S. Geological Survey (USGS) has a broader list of 50 mineral commodities that are critical to the nation’s economy and national security. Uranium is excluded by a statutory definition but is often tracked in parallel. Together, these 51 elements are used for a far wider array of products than is often recognized. The 17 REEs alone are also needed for oil refining, guided missiles, radar arrays, MRI machines, computer chips, hydrogen electrolysis, lasers, aluminum manufacturing, cameras, jet engines, satellite manufacturing, and a long list of other advanced applications.Continue Reading What President Trump Might Do on Critical Minerals
On January 29, Senator Josh Hawley (R-MO) introduced the Decoupling America’s Artificial Intelligence Capabilities from China Act (S. 321), one of the first bills of 119th Congress to address escalating U.S. competition with China on artificial intelligence. The new legislation comes just days after Chinese AI company DeepSeek…
Continue Reading Senator Hawley Introduces Sweeping U.S.-China AI Decoupling BillU.S. Secretary of Commerce nominee Howard Lutnick delivered a detailed preview of what to expect from the Trump Administration on key issues around technology, trade, and intellectual property. At his nomination hearing before the Senate Committee on Commerce, Science, and Transportation on Wednesday, January 29, Lutnick faced questions from senators about the future of the CHIPS and Science Act, global trade, and particularly U.S. technological competition with China, including export controls and artificial intelligence after the release of China’s AI model “DeepSeek.” Lutnick, who was introduced by Vice President J.D. Vance, committed to implementing the Trump Administration’s America First agenda.
If confirmed, Lutnick will lead the Commerce Department’s vast policy portfolio, including export controls for emerging technologies, broadband spectrum access and deployment, AI innovation, and climate and weather issues through the National Oceanic and Atmospheric Administration (“NOAA”). In his responses to senators’ questions, Lutnick emphasized his pro-business approach and his intent to implement President Trump’s policy objectives including bringing manufacturing—particularly of semiconductors—back to the United States and establishing “reciprocity” with China in response to what he called “unfair” treatment of U.S. businesses.
Technology Competition with China, Export Controls, and Intellectual Property
Senators on both sides of the aisle asked Lutnick about the threat of Chinese competition in emerging technologies, such as AI. Lutnick stated that it is evident the Chinese used “stolen” and “leveraged” U.S. technologies to develop DeepSeek and that the United States needs to stop China from “using our tools to compete with us.”
Lutnick noted that China has found ways to evade U.S. export controls and that, under his direction, the Commerce Department will reinforce these controls with punitive tariffs to ensure compliance. Lutnick also criticized the Chinese for refusing to respect U.S. innovators’ IP in China, stating that the Chinese should expect the same treatment in the United States under a new policy of “reciprocity.” As Commerce Secretary, Lutnick will oversee the Bureau of Industry and Security (“BIS”) and the U.S. Patent and Trademark Office (“USPTO”), which he noted will carry out the Trump Administration’s America First agenda, including by preventing the Chinese from “abusing” the U.S. patent system. In response to questioning from Senator Marsha Blackburn (R-TN), Lutnick also stated that he would work to reduce the backlog of patent applications pending at the USPTO. Continue Reading What Commerce Secretary Nominee Howard Lutnick’s Confirmation Hearing Tells us about Technology Policy in the Trump Administration
Alert December 19, 2024
As discussed in our prior client alert, President-elect Trump’s second term is expected to bring important changes to U.S. trade policy, including with respect to U.S. tariffs. Among the tools Trump may use to modify existing U.S. tariffs is Section 301 of the Trade Act of 1974 (“Section 301”), which provided the vehicle for imposition of tariffs against China under the first Trump administration. More recently, the Biden administration has initiated new proceedings under Section 301, while also modifying existing Section 301 tariffs against China. This alert provides an overview of Section 301, explores how Section 301 has been used by recent administrations to increase tariffs on imports from China, and surveys other Section 301 actions, including currently pending investigations. This alert also examines how a second Trump administration could reactivate or modify Section 301 tariffs that were previously announced, but have been suspended or terminated.
Section 301 is an investigative tool under U.S. trade law that allows the Office of the U.S. Trade Representative (“USTR”) to pursue unilateral trade retaliation against countries that impose unfair trade barriers against the United States. USTR may launch Section 301 investigations in response to the filing of a petition submitted by an “interested party,” or upon USTR’s own initiative. Once a Section 301 investigation is launched, the statutory deadline for completion is typically between 12 and 18 months. Under the first Trump administration, USTR often did not use the full period provided under the statute, instead completing certain investigations several months before the statutory deadline.
As part of the investigative process, USTR must request consultations with the foreign government whose conduct is at issue, and it will generally also solicit public comments and hold a hearing as part of its investigation. At the end of the investigation, USTR is authorized to impose duties or other trade restrictions where it has determined:
Once imposed, Section 301 tariffs must be terminated after four years unless an extension is requested. As explained below, USTR under certain conditions can also modify existing Section 301 duties or reinstitute previously suspended or terminated Section 301 actions.Continue Reading Section 301 Tariffs and Proceedings: Recent and Potential Developments
