Bill Drexel, a Fellow at the Hudson Institute, said that the Chip Security Act aligns with the Trump administration's objective of achieving reciprocity in U.S.-China trade relations by bolstering essential American supply chains. Drexel shared his insights with Federal Newswire.
"Yes, in so far as China routinely weaponizes its supply chain bottlenecks for leverage—the Chips Security Act is aimed at ensuring the United States is able to leverage its own critical supply chain advantages," said Drexel. "That said, the recent news that Nvidia will resume sales of its H20 GPU to China suggests that this administration may be less invested in keeping cutting edge chip capabilities out of China."
According to a press release from the House Select Committee on the Chinese Communist Party (CCP), there is renewed support for the Chip Security Act. The legislation aims to safeguard the U.S. chip industry and prevent chip smuggling into China. The committee highlighted reports indicating that approximately 140,000 U.S. chips were illicitly transferred to Chinese entities in 2024. The CCP allegedly uses these chips to acquire strategic American technology to "serve its techno-authoritarian vision for the world."
The press release further explains that the Chip Security Act would instruct the Department of Commerce to implement location verification measures to ensure advanced AI chips are not redirected to unauthorized locations. Additionally, it mandates American chipmaking companies to report any evidence of AI chips being diverted unlawfully. The Department of Commerce would also be tasked with recommending export controls that emphasize security and flexibility while exploring additional methods to prevent theft and misuse of American chips.
Reuters reported that Jensen Huang, CEO of Nvidia, recently met with President Trump. Following this meeting, Nvidia announced plans to resume sales of its H20 chips to Chinese firms. Due to national security concerns, Nvidia's AI chips have been subject to export controls. Although H20 chips possess less computing power than some of Nvidia's other advanced models, they represent the most sophisticated version legally available for sale in China under restrictions imposed during both President Trump's previous administration and President Biden's administration.
Drexel is recognized as an expert on technology and national security at the Hudson Institute, where his work focuses on AI competition with China and U.S.-India relations. His prior experience includes roles at the Center for a New American Security, the American Enterprise Institute, and the United Nations.
