Trump’s administration on Tuesday cut $20 million, or about 10% of the budget, for the Commerce Department’s Bureau of Industry and Security (BIS), a move that some lawmakers say could weaken the nation’s edge in the race against China for advanced technology.
The funding cut is part of a broader effort by the White House to block $3 billion in federal spending approved by Congress.
Democratic Senator Patty Murray, a member of the appropriations committee, said the decision risks undermining US efforts to maintain its lead in artificial intelligence. BIS, which plays a critical role in controlling semiconductor exports and advanced AI chip technology, is seen as a key player in the US-China tech competition.
Capitol Hill lawmakers have voiced strong concerns over the move. In a Wednesday letter addressed to BIS Director Russ Vought, senators led by Senator Elizabeth Warren questioned the national security implications of the funding freeze.
The letter accused the Office of Management and Budget of compromising US security. It said, “It is, in essence, announcing to our adversaries that it is open season on US technology.” The senators have asked for an immediate explanation of the legal basis for the cuts as well as an assessment of the impact on BIS’s operations.
BIS is responsible for writing and enforcing rules that limit the shipment of sensitive American technology to China and other nations.
The agency’s work is part of a larger strategy that began in President Donald Trump’s first term and was significantly intensified under President Joe Biden. The aim is to slow China’s progress in developing advanced AI capabilities, which could eventually be used to gain a military advantage.
Commerce Secretary Lutnick recently sanctioned various Chinese tech groups
Commerce Secretary Howard Lutnick has stressed the need for proper funding and has vowed tougher penalties for companies that break export control rules.
Recently, he imposed sanctions on dozens of Chinese firms accused of helping Beijing’s military technology efforts.
During his confirmation hearing, Lutnick said that steady and adequate funding for BIS is “critical to our export control and enforcement regime.”
Since taking office, Lutnick has overseen the departure of various senior BIS officials. For several weeks, the agency halted processing applications for export licenses, a move that led to significant frustration among technology companies.
Although some approvals have resumed in recent weeks, a Commerce Department official noted that efforts are still underway to “resolve” the broader issues caused by the freeze.
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