US AI Adviser: Trump, Xi Can Fix Miscommunication Stemming From Export Controls
China’s recently issued rare earth export controls were likely a response to the Commerce Department’s 50% rule for the Entity List and highlighted the ongoing communication issues between the two sides, said David Sacks, the White House’s AI policy adviser.
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Speaking on the All-In podcast on Oct. 17, Sacks said he thinks Commerce’s 50% rule -- which extended certain end-user controls to majority-owned affiliates of parties on the Entity List and other lists (see 2509290017) -- was a “perfectly reasonable rule to issue.” He said it addressed the problem of Entity List firms setting up shell companies to avoid U.S. export license requirements.
But China “reacted to that very strongly” by publishing its own set of sweeping export controls on rare earths, Sacks said, including new rules to restrict overseas exports that contain certain levels of Chinese-origin material (see 2510090021).
“There's just such a high chance of the two sides miscommunicating with each other and over-escalating when you just allow the bureaucracies to talk to each other,” Sacks said. What is “most needed right now” is for presidents Donald Trump and Xi Jinping to meet and strike a “grand bargain.”
“That will then calm down the relationship,” he said. “Obviously this is going to be a very competitive relationship for as far as the eye can see, because there's both security and economic competition going on. But I do think that when you have an understanding at the top, it creates conditions for more stability.”