Three Bills Enter U.S. Defense Package to Restrict China’s Access to Chips
Key Facts
U.S. lawmakers have included three bills to tighten China’s access to advanced chips and chipmaking equipment in a Senate package to manage the fiscal 2027 National Defense Authorization Act, Reuters reported. The proposals include the AI Overwatch Act, the Chip Security Act and the MATCH Act, though their inclusion in the package remains a legislative proposal. The first would give Congress a role in advanced chip exports, while the second would require companies to track chips to combat smuggling. The third targets chipmaking equipment exported to China by pressing U.S. allies to restrict more of it. The measures put supply routes for advanced technology to China at the center of a national security-related legislative debate.
The House Foreign Affairs Committee approved the three bills earlier this year before they moved into the Senate’s National Defense Authorization Act package, Reuters reported. Democratic Senator Elizabeth Warren and Republican Senator Jim Banks said Nvidia Chief Executive Jensen Huang’s confirmation that he had a relationship with someone suspected of spying for Chinese intelligence had heightened the urgency of security concerns. They added that Congress should act to pass bills including AI Overwatch as part of the authorization act, cutting off China’s routes to advanced chips. They said: "It is time for Congress to take decisive action to pass essential bills like the AI Overwatch Act as part of the Defense Authorization Act, cutting off the routes through which China obtains advanced chips." Support from lawmakers in both parties reflects growing political attention to China’s access to these chips.
Representative Bill Foster said Congress has tools to prevent powerful AI chips from reaching the wrong hands, noting that the Chip Security Act, which he introduced with Representative Bill Huizenga, passed the House committee unanimously. The bill would require companies to track their chips in an effort to combat smuggling to unauthorized destinations. In contrast, a spokesman for Americans for Responsible Innovation said the bills’ obstacle was winning White House support. The White House did not comment on the measures, Reuters reported. The administration’s position remains an influential factor in whether the proposals move from the legislative package to implementation.
The effort faces opposition from the Information Technology Industry Council, whose members include Nvidia. The council opposed the measures, saying they could weaken U.S. competitiveness and complicate export-control policy. The warning comes as China’s semiconductor-related trade is growing rapidly: the value of China’s chip exports rose 137.1% in October from a year earlier, according to data reported by the Associated Press. In broader trade, Chinese exports rose 35.2% and imports 41.6% year on year in the same month. China’s trade surplus was $105.3 billion in October, compared with $133.5 billion in September, while the cumulative surplus from January through October reached $1.04 trillion. These figures show the scale of trade flows against which the technology restrictions are being debated, without being a stated reason for the legislative push.
China’s exports to the United States grew 32.9% year on year in October, while its exports to the European Union rose 24.3%, according to the Associated Press. The figures come as Washington considers tightening restrictions on chips and chipmaking equipment, including by pressing allies to restrict more equipment destined for China. U.S. President Donald Trump and Chinese leader Xi Jinping are scheduled to meet the following week on the sidelines of the APEC leaders’ summit in Shenzhen, with trade among the main expected agenda items, the news agency reported. The planned meeting places trade within the broader context of economic relations between the two countries. The fate of the three measures depends on their progress in the Senate and the White House’s position on them.