Much of the trade news focuses on U.S. policies related to Section 232 national security and Section 301 intellectual property import tariffs and ongoing trade agreement negotiations with China, Japan, the European Union (EU) and the United Kingdom (UK). While a lot is happening on these fronts, the United States is also considering policies to limit exports of specific technologies, and these changes could dramatically impact the U.S. automotive industry.
The National Defense Authorization Act for FY 2019 contained a piece of legislation called the Export Control Reform Act (ECRA). Under ECRA, the U.S. government formed an interagency group to review “emerging and foundational technologies that are essential to the national security of the United States.” The Bureau of Industry and Security (BIS) is the Department of Commerce agency responsible for leading the investigations into whether or not to recommend export controls on specific technologies. BIS published an advance notice of proposed rulemaking (ANPR) in November 2018 with regard to the following technologies (technologies listed in bold are those that may include automotive technologies):
Table 1: Emerging Technologies Under Consideration for Export Controls
1. Biotechnology, such as:
- Nanobiology;
- Synthetic biology;
- Genomic and genetic engineering; or
- Neurotech
2. Artificial intelligence (AI) and machine learning technology, such as:
- Neural networks and deep learning (e.g., brain modeling, time series prediction, classification);
- Evolution and genetic computation (e.g., genetic algorithms, genetic programming);
- Reinforcement learning;
- Computer vision (e.g., object recognition, image understanding);
- Expert systems (e.g., decision support systems, teaching systems);
- Speech and audio processing (e.g., speech recognition and production);
- Natural language processing (e.g., machine translation);
- Planning (e.g., scheduling, game playing);
- Audio and video manipulation technologies (e.g., voice cloning, deepfakes);
- AI cloud technologies; or
- AI chipsets.
3. Position, Navigation, and Timing (PNT) technology.
4. Microprocessor technology, such as:
- Systems-on-Chip (SoC); or
- Stacked Memory on Chip.
5. Advanced computing technology, such as:
- Memory-centric logic
6. Data analytics technology, such as:
- Visualization;
- Automated analysis algorithms; or
- Context-aware computing.
7. Quantum information and sensing technology, such as:
- Quantum computing;
- Quantum encryption; or
- Quantum sensing.
8. Logistics technology, such as:
- Mobile electric power;
- Modeling and simulation;
- Total asset visibility; or
- Distribution-based Logistics Systems (DBLS).
9. Additive manufacturing (e.g. 3D printing):
10. Robotics such as:
- Micro-drone and micro-robotic systems;
- Swarming technology;
- Self-assembling robots;
- Molecular robotics;
- Robot compliers; or
- Smart Dust.
11. Brain-computer interfaces such as:
- Neural-controlled interfaces;
- Mind-machine interfaces;
- Direct neural interfaces; or
- Brain-machine interfaces.
12. Hypersonics, such as:
- Flight control algorithms;
- Propulsion technologies;
- Thermal protection systems; or
- Specialized materials (for structures, sensors, etc.)
13. Advanced Materials, such as:
- Adaptive camouflage;
- Functional textiles (e.g., advanced fiber and fabric technology); or
- Biomaterials
14. Advanced surveillance technologies, such as Faceprint and voiceprint technologies
Source: Department of Commerce, Bureau of Industry and Security, 15 CFR Part 744
These types of export controls are generally used to keep sensitive U.S. technologies out of the hands of countries under broad embargo, hostile nations, or states that are deemed to support international terrorism. The current ANPR is broadly scoped and does not specify which countries would be targeted nor what level of technology would potentially be subject to export controls. Given the Administration’s broad use of Section 232 of the Trade Expansion Act of 1962 that has found national security threat in steel and aluminum imports from countries that have long been U.S. allies, it is not clear how wide a net the BIS might cast when proposing export controls. The Administration may also target China with export controls, which could have broad impact on automotive operations in China and trade with that country.
The next step in the process is for BIS to issue a proposed rule with regard to the emerging technologies. BIS is also expected to publish an ANPR for “foundational technologies” in early 2019.