Commerce Dept. needs funding to match China challenge, Raimondo says

Commerce Dept. needs funding to match China challenge, Raimondo says

Time Stamp: December 2, 2023 7:09 PM
Source Node: 2990675

Simi Valley, Calif. — The Commerce Department needs a bigger budget to better help the U.S. outpace China on technology.

That was the message today from Commerce Secretary Gina Raimondo at the Reagan Defense Forum, a symposium of government and industry officials in California. She used her speech at the event to give a pitch for more funding from Congress — particularly for the Bureau of Industry and Security, which handles export controls.

“It needs to be funded so we can do what we need to do to protect America,” she said.

Raimondo is the first head of her department to attend the event, and her arrival was itself an emblem of the ways in which Commerce and the Defense Department are increasingly overlapping.

Under the last two administrations, America has intensified its economic and security competition with China. To do so, it’s needed separate departments — such as Defense and Commerce — to work as a team. For example, the Pentagon has built security partnerships in the Indo-Pacific to better counter China, while the Commerce Department has issues export controls on semiconductors meant to hamstring Chinese tech firms.

Out of America’s security-related agencies, the Pentagon has by far the largest budget and is hence relied on to address a host of the nation’s security issues. That can be a problem when other departments are asked to play a larger role in the space.

The Bureau of Industry and Security has the same budget that it did 10 years ago — $200 million — despite the huge climb in export controls aimed at China, Raimondo said.

“We have twice as many license requests today than we did a decade ago but the same number of people doing the work,” Raimondo said in an interview with Defense News.

The upshot is a capacity problem, she argued — one that the Pentagon is often relied on to solve.

Commerce brings in staff members and subject matter experts from the Defense Department to consult with them on relevant national security topics, such as artificial intelligence and chips. Sometimes, due to staffing shortages in Commerce, these visits occur out of need, not only preference, said two former defense officials, speaking on background to talk freely, in interviews with Defense News.

Raimondo didn’t specify the total budget she’s seeking for the Bureau of Industry and Security. The House Foreign Affairs Committee is finishing a review of the office and will soon release a report, according to reporting from Politico.

Meanwhile, as the U.S. tries to deter a possible invasion of Taiwan later this decade, secure export controls have become a top priority for economic and military competition.

“The most high end compute semiconductors, we have in America, they don’t have, and those are the chips that run and train AI models that the PLA would want to operate into their military,” Raimondo told Defense News. “If we can deny them the chips they can’t run the models, then they can’t use that to advance their military capability.”

Denying those chips is a difficult task, Raimondo acknowledged. More than any other adversary, she said, China can evade export controls, forcing her department into a game of “whack a mole” to stop vulnerabilities when the spring up.

“I may be the first commerce secretary here,” she said in her speech. “I’ll certainly not be the last.”

Noah Robertson is the Pentagon reporter at Defense News. He previously covered national security for the Christian Science Monitor. He holds a bachelor’s degree in English and government from the College of William & Mary in his hometown of Williamsburg, Virginia.

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