The U.S. Department of Commerce (Commerce) recently announced a new set of sweeping export controls—focused on semiconductors and advanced computing—with the goal of stunting the growth of China’s technology industry and protecting U.S. national security and foreign policy interests. The announcement comes on the heels of a major speech made by National Security Advisor Jake Sullivan at the Special Competitive Studies Project Global Emerging Technologies Summit in mid-September, in which he laid out, in part, the Biden administration’s approach to U.S. export controls. Though couched in terms of national security, the Commerce announcement is the most significant economic policy development in the bilateral relationship between Washington and Beijing since the ill-advised trade war that roiled markets between 2018 and 2020.

A battle for technological supremacy in the 21^st century lies at the heart of the competition between Washington and Beijing. In theory, export controls can be powerful tools to protect U.S. national security and technological considerations. For example, it makes sense to prohibit the export of materials necessary to make nuclear weapons. Yet it is a much more challenging calculus where the product in question has both civilian and military applications, as is the case with semiconductors and their component parts. Commentators have provided excellent technical analysis about the new export controls, the economic and geopolitical effects of which are still unclear. Nevertheless, some initial words of caution—if not outright concern—are appropriate.

First, the export controls apply to both military as well as commercial technology and artificial intelligence and bleeding edge products. This is a significant departure from the status quo, in which the United States tried a bifurcated approach to leading technology exports to China: a ban on military sales but permitted commercial sales. As Gregory C. Allen of the Center for Strategic & International Studies noted, “High-end AI chips can no longer be sold to any entity operating in China, whether that is the Chinese military, a Chinese tech company, or even a U.S. company operating a data center in China.” Indeed, as Alan Beattie recently observed in his terrific Financial Times column on the export controls, “[T]he prohibitions on US citizens and green card holders working in China’s semiconductor industry meant hundreds of employees, including from the world-leading Dutch manufacturer ASML, stopped work within days.” Perhaps these changes are necessary given China’s military/​civilian fusion, but—based on public information, at least—the scope seems too broad at this point. A scalpel is almost always better than a hatchet.

Second, the new export controls were unilaterally imposed pursuant to the Export Control Reform Act of 2018 (ECRA) and its corresponding regulations. Yet when Congress passed ECRA, it wisely stated in Section 102 (4), “Export controls should be fully coordinated with the multilateral export control regimes. Export controls that are multilateral are most effective…” That is exactly right. As former China director on the National Security Council and current Brookings Senior Fellow Ryan Hass noted on Twitter, “Multilateral controls tend to be more effective than unilateral controls. The US seems to have decided that it needed to move first and accept costs for doing so to signal to others the seriousness of its concerns.” It remains to be seen whether other countries will join the U.S. or whether the move will antagonize the very allies the U.S. should be partnering with to pressure Beijing to raise its commercial standards.

As I’ve previously explained, unilateral export controls raise major concerns regarding both efficacy and effect. Evasion of unilateral sanctions is common. If China can eventually source these products either domestically or from third party countries (home to U.S. firms’ competitors), the United States has not enhanced its own national security while at the same time simply denied sales to domestic companies. Needlessly denying U.S. tech companies revenue is no way to ensure that those same companies remain atop the global tech food chain. Indeed, as Eric Hirschhorn, under secretary of commerce and industry during most of the Obama administration noted in the China Business Review, “when we unilaterally control any technology too tightly, there’s a good chance we will drive research and development, and ultimately production, offshore.” An increasingly stringent export control ecosystem might also dissuade new firms from setting up operations in the United States—or incentivize offshoring of existing firms.

Third, the timing of the export control announcement raises numerous questions. Did it need to occur close to the recently concluded 20^th National Congress of the Chinese Communist Party, potentially embarrassing (and thus antagonizing) Beijing? Did the painful controls need to be implemented right now, just as the global economy, and China’s economy in particular, is faltering? Coming right before the U.S. midterm elections, was this more about U.S. political urgency, rather than about sound policy? Or was it really intended to amplify U.S. industrial policy—namely, the just-passed Chips and Science Act of 2022—by further encouraging the “re-shoring” of semiconductor resources? (Cato scholars have expressed skepticism of new semiconductor subsidies). Maybe there are good, classified reasons for why the sanctions were urgently needed today, but so far we haven’t heard them.

Fourth, the objectives of the new export controls are risky. Overnight, the policy hobbled China’s semiconductor industry and significantly damaged its technology industry. Meanwhile, Taiwan is a leading producer of semiconductors. Now that China is being cut out of the semiconductor supply chain and its own production has been kneecapped, the new policy could arguably hasten Beijing’s attempts to take control of Taiwan in order to secure the technological prowess it wants and needs to fuel its rise. At the very least, the policy—which Biden administration officials have expressly acknowledged is intended to thwart China’s technological progress—will further convince leadership in the Chinese Communist Party of the necessity of its quest for technological self-reliance as stated in its Made in China 2025 industrial policy. This sort of foreign discrimination and isolationism is a major irritant to firms in the United States and other market-oriented democracies around the world, and it could foster even more isolation and belligerence among the Chinese people (as past U.S. protectionism has done).

Too often Washington has treated sanctions as costless to the United States, but that is clearly not always the case. Aside from prioritizing multilateral over unilateral controls, policymakers should consider some simple steps to ensure a proper calibration between national security and economic considerations. For example, a tighter definition of “national security” is needed. The Trump administration’s bogus invocation of national security to restrict imported steel and aluminum is a perfect example of disguised protectionism. Though semiconductors are clearly a component of a country’s national security given their importance to weapons systems, the government should still explain how the controlled products in question are undermining U.S. national security (within reason; obviously certain intelligence must remain classified).

Likewise, policymakers should ensure that export controls are not unduly burdensome over the long term. A simple sunset with judicial scrutiny would be appropriate for export controls, particularly for products in which the technology is rapidly evolving. A high-end semiconductor needed for surveillance or a weapons system today may not be fit for that purpose tomorrow, yet such product could still be useful in commercial and civilian contexts. The government should be required to periodically show that the control is still necessary to protect national security or other vital U.S. interests. Finally, Commerce should be required to consult closely with affected businesses to determine if there are ways to mitigate potential national security risks without damaging commercial considerations.

There’s little doubt that China represents a major economic and geopolitical challenge for the United States and the rest of the world’s market-oriented democracies. Beijing is increasingly illiberal and repressive at home and bellicose abroad. Its brand military-civilian fusion is a unique challenge, particularly with respect to technology. Perhaps the Biden administration’s export controls will prove wise, but more caution—and official justification—are needed.