On March 5, news outlets reported that the U.S. government is drafting new export control regulations for AI chips. A copy of the draft regulations is not publicly available. According to reports, the draft regulations would cover most high-end processors sold by U.S. companies, positioning the U.S. as a gatekeeper for the global AI industry.
In recent weeks, the Trump administration has taken several actions to implement its policy toward the export of advanced AI commodities to China. These include the Department of Commerce (Commerce) Bureau of Industry’s (BIS) final rule implementing a case-by-case review policy (changed from a presumption of denial policy) of exports of certain advanced computing commodities to end users in China (including Macau), and a Proclamation following an investigation under Section 232 of the Trade Expansion Act of 1962 (Section 232) of imports of semiconductors, semiconductor manufacturing equipment and derivative products, which narrowly targets the advanced AI commodities covered by the BIS export control policy action. The Section 232 Proclamation further provides broad tariff exceptions for in-scope commodities used in domestic applications. These twin actions come on the heels of an investigation under Section 301 of the Trade Act of 1974 (Section 301) of China’s acts, policies and practices (APPs) related to targeting of the semiconductor industry for dominance in which the Administration found that the Chinese APPs were actionable under Section 301, but deferred action.
Below we discuss the BIS final rule, the Section 232 action, and potential next steps for both AI export controls and import restrictions on semiconductors.
On September 29, 2025, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) issued a long-anticipated interim final rule (IFR) amending the Export Administration Regulations (EAR) to extend Entity List and Military End User (MEU) List restrictions to majority-owned affiliates. Known as the “Affiliates Rule,” the IFR establishes a 50 Percent Rule comparable to how the Treasury Department’s Office of Foreign Assets Control (OFAC) enforces sanctions on affiliates of blocked parties.
Two days before its scheduled effective date, the Department of Commerce’s Bureau of Industry and Security (BIS) announced the rescission of the Biden administration’s Artificial Intelligence (AI) Diffusion Rule on May 13. The Framework for Artificial Intelligence Diffusion, issued as an interim final rule on January 15, 2025, established new requirements under the Export Administration Regulations (EAR) for the export, reexport and in-country transfer of advanced computing integrated circuits (ICs). These requirements created new licensing and quota regimes for advanced AI chips, as well as a tiered framework for assessing export restrictions to diverse jurisdictions (discussed in our previous post here).
On January 13, 2025, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) issued an Interim Final Rule (IFR), establishing new export controls targeting advanced artificial intelligence (AI) chips and model weights for advanced AI models to protect against national security risks associated with AI while promoting American AI technological leadership. This framework is a tailored strategic initiative designed to regulate the spread of advanced AI models and prevent their access by malicious actors. It enables “secure and responsible foreign entities and destinations” to utilize leading U.S. AI models and the powerful IC clusters needed for their training. Entities that do not comply with established safety and security protocols will not be granted access.
On January 15, 2025, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) released an interim final rule (IFR) updating export controls on advanced computing semiconductors. This IFR seeks to ensure that customers of “front-end fabricators” and Outsourced Semiconductor Assembly and Test (OSAT) companies cannot evade controls on advanced computing ICs by misrepresenting the performance capabilities of their integrated circuit (IC) designs.
On September 23, 2024, the Department of Commerce’s Bureau of Industry and Security (BIS) released for public inspection a Notice of Proposed Rulemaking that seeks to prohibit the sale or import of connected vehicles (CVs) with certain hardware and software that have a sufficient nexus to the People’s Republic of China (PRC) or Russia. If the Vehicle Connectivity System (VCS) hardware and the VCS and Automated Driving System (ADS) software are designed, developed, manufactured or supplied by persons owned by, controlled by, or subject to the jurisdiction or direction of the PRC or Russia, the transactions outlined below would be prohibited.
On September 5, 2024, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) issued an interim final rule imposing significant new export controls on quantum computing, cryocooling systems, semiconductor equipment, and additive manufacturing technologies. These controls are meant to align U.S. regulations with recent regulations adopted by several close U.S. allies and are intended to address national security concerns related to the proliferation of sensitive technologies. BIS is currently accepting comments on the interim final rule until November 5, 2024.
On April 30, 2024, the Department of State proposed an amendment to the International Traffic in Arms Regulations (ITAR) intended to facilitate exports of defense articles, the performance of defense services, and brokering activities between or among authorized users in the United States, United Kingdom (UK) and Australia.
On April 19, 2024, the Department of Commerce Bureau of Industry and Security (BIS) issued an interim final rule reducing export control licensing requirements for Australia and the United Kingdom (UK) as a means to further strengthen the AUKUS trilateral security partnership between the three countries. With this rule, Australia and the UK will have nearly the same liberal licensing treatment under the Export Administration Regulations (EAR) as Canada. For example, many Commerce-controlled items, including certain military, aerospace and satellite-related items, will now be eligible for export or reexport to Australia and the UK without a license.
Global Trade & Sanctions Law