An Export Control Chat with Jeannette Chu

Summary

The Trade Guys – "An Export Control Chat with Jeannette Chu" (June 10, 2025)

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Episode Overview

This episode of The Trade Guys delves deep into the evolving landscape of U.S. export controls, focusing on policy shifts under the current Trump administration, their impacts on U.S. businesses and China, and how these measures fit into larger geopolitical and economic strategies. Host Scott Miller and Bill Reinsch interview Jeannette Chu, Vice President for National Security issues at the National Foreign Trade Council (NFTC) and former BIS official in China. They discuss the increase in export control activity, recent regulatory changes (such as the AI rule rescission and novel items like ethane), and the strategic, bureaucratic, and practical realities of U.S.-China trade tensions.

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Key Discussion Points and Insights

1. Export Controls: Then and Now (02:19 – 04:22)

• Jeannette Chu compares the Trump administration’s approach to that of the Biden team, noting that today’s policymakers are much savvier and act faster:
  • “I almost see it as a disco ball. They know so, so much more than they did during the first term...Every agency has multiple facets.” (03:15, Jeannette Chu)
• The “disco ball” metaphor illustrates a multi-pronged, rapid-response use of policy tools across various agencies and types of controls.

2. The AI Diffusion Rule Rescission (05:04 – 07:54)

• The Trump administration quickly rescinded the Biden-era AI diffusion rule, citing industry concerns about complexity and lack of consultation.
• Jeannette details NFTC’s advocacy for rescission due to poor rulemaking practices:
  • “There was no ANPRM, there wasn’t even a notice of proposed rulemaking, no opportunity for public comment, very limited industry engagement.” (06:29, Jeannette Chu)
• A new, simpler, but possibly more stringent, rule is expected soon, but timelines for “imminent” announcements remain fluid.

3. Surprising Export Controls: The Case of Ethane (07:55 – 13:40)

• Bill and Scott probe the rationale for controlling ethane exports—a basic chemical building block—alongside advanced tech items.
  • Scott covers what ethane is and why it’s so essential in global supply chains (08:24).
  • Jeannette suggests its selection is simply about maximizing pressure: “...when the administration was contemplating pressure points...this just happened to be one of them.” (10:35, Jeannette Chu)
• The move is seen as leverage against China’s lack of natural gas, not a traditional national security concern.
  • “This sounds like leverage to me toward a better deal with China on a whole range of issues.” (12:17, Scott Miller)

4. Broadening the Toolkit and Effects on U.S. Firms (14:01 – 15:57)

• The “disco ball” approach extends beyond export controls: tariffs, Section 232 investigations, outbound investment controls, and efforts to accelerate U.S. critical minerals all play a part.
• Jeannette emphasizes the complexity for companies:
  • “It’s a tough flow to follow...One of the features of this disco ball approach is that any tool is a good tool.” (14:01, Jeannette Chu)
• The administration’s reshoring efforts (like the new executive order on critical minerals) form the flip side of controls on China.

5. China’s Countermoves and Bureaucratic Realities (15:57 – 20:17)

• China is also using economic tools, including export controls on critical minerals.
• Jeannette: “They have been steadily building...to be able to weaponize fundamentally their very fortuitous access to critical minerals.” (17:11, Jeannette Chu)
• Both sides are navigating complex bureaucratic processes, and China’s government mirrors U.S. tactics in learning how to use its own levers for pressure or retaliation.

6. Resilience, Indigenization, and the Risk of Escalation (20:17 – 23:31)

• Both U.S. and China are recalibrating in the face of trade and regulatory conflict. Each is boosting self-sufficiency—China with indigenization strategies, the U.S. with reshoring:
  • “It continues to be volatile, continues to be confusing, but I think we’re just going to have to live with that.” (21:30, Scott Miller)
• On U.S. export controls accelerating Chinese tech development: Jeannette comments this path was set years ago, but controls may further accelerate China’s goals.
  • “All Americans are affected by policies. And I struggle to think of an industry that is not affected.” (22:17, Jeannette Chu)

7. Consultations and Rulemaking: Is the Process Working? (25:02 – 27:55)

• Bill raises concerns about lack of consultation with business in the Trump administration; Jeannette sees no change so far and says access is still available.
  • “I’ve not actually seen a diminution in terms of access, and our members have not reported that either.” (25:02, Jeannette Chu)
• However, she is worried about overly short comment periods for complex new Section 232 investigations (e.g., semiconductors, pharmaceuticals): “It’s hard to provide fulsome enough impact in that short period of time.” (26:45, Jeannette Chu)

8. Section 232: Widening the Scope, Shrinking the Process (27:55 – 34:36)

• The hosts note the expansion of national security investigations into industries (semiconductors, pharmaceuticals, aircraft) that don’t fit the classic mold—often not even requested by U.S. industry.
• Scott on the risk: “This seems to me to be one of those situations where all you have is a hammer, everything looks like a nail.” (29:03)
• Jeannette and Bill worry truncated investigations and interim final rules may mean pre-decided outcomes, not meaningful inquiry.
  • “The signal to me is that these may not be serious investigations and they may be, you know, pre decided. And the investigation...is actually, let's just construct a rationale for what we want to do anyway.” (33:55, Bill Reinsch)

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Notable Quotes and Memorable Moments

• Jeannette Chu: “I almost see it as a disco ball…where every agency has multiple facets. Every single facet is looked at as something that is this something that we can bring to bear upon a situation…” (03:15)
• Scott Miller: “This sounds like leverage to me toward a better deal with China on a whole range of issues.” (12:17)
• Bill Reinsch: “Consultation means that you have to agree with us. And the government's view tends to be consultation means we’ll let you know what we decide.” (26:13)
• Jeannette Chu: “All Americans are affected by policies. And I struggle to think of an industry that is not affected.” (22:17)
• Scott Miller: “This seems to me to be one of those situations where all you have is a hammer, everything looks like a nail.” (29:03)
• Bill Reinsch: “The investigation, quote, unquote, is actually, let's just construct a rationale for what we want to do anyway. Not the way government’s supposed to work, but there you go.” (33:55)

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Timestamps for Key Segments

• Export Controls: Biden vs. Trump, the “Disco Ball” – 02:19–04:22
• AI Diffusion Rule Rescission and Industry Concerns – 05:04–07:54
• Ethane Controls and U.S.-China Leverage – 07:55–13:40
• Broader Economic Tools and Effects on U.S. Companies – 14:01–15:57
• China’s Retaliation and Regulatory Learning – 15:57–20:17
• Indigenization and Escalation Risks – 21:30–23:31
• Consultation, Access, and Accelerated Rulemaking – 25:02–27:55
• Section 232: Process Shortcuts and Policy Risks – 27:55–34:36

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Conclusion

The episode provides a candid, inside-baseball look at how export controls are being wielded today as strategic tools, not just technical bureaucratic measures. Both the U.S. and China are accelerating their efforts to secure supply chains, tighten rules, and apply pressure, making the global trade environment ever more complex—and uncertain. The "disco ball" metaphor recurs: every facet of national security trade and economy is now on the table, with shifting rules and short timelines leaving industry scrambling to keep up. Throughout, Bill, Scott, and Jeannette offer sober but wry observations about the practical effects and the risks of policy being driven more by pressure and political leverage than by careful strategy or stakeholder input.

Transcript

[A]

I'm Scott.

[B]

I'm Bill and we're the Trade Guys.

[A]

You're listening to the Trade Guys, a.

[B]

Podcast produced by CSIS where we talk.

[A]

About trade in terms that everyone can understand. I'm H. Andrew Schwartz and I'm here with Scott Miller and Bill Reinsch, the CSIS Trade Guys. This is Trade Guy Scott. Thanks for listening to the Trade Guys. On this week's episode, Bill and I speak with Jeanette Shue, who vice President for National Security issues at the National Foreign Trade Council. And we discuss all things export controls, all this and more on this episode of the Trade Guys.

[B]

Well, hello everybody. This is Trade Guy Bill along with Trade Guy Scott and a special guest which I'm happy to introduce because I've known her for a very long time and that's Jeanette Chu. Jeanette spent a long career at my former agency bis, where for a good part of it, she was our person in China dealing with export control enforcement efforts. From her office in Beijing and traveling all over the country, she's got great stories which I'd love to get to, but we're trying to be policy topical. We'll probably avoid the stories, but she's got a lot of them. After she left bis, she went to PWC and ran their export control consulting practice for a number of years. And now she's at another one of my former places at the National Foreign Trade Council, which has always had a strong emphasis on export controls and sanctions, certainly when I was there, but even before that, and now Jeannette is helping represent those companies, which are large multinationals, on export control and sanctions issues as well, along with some other things. It looks like export controls are now moving back on screen. I thought the joke in Trump 1.0 was it took him at least two years to figure out what they were or that they even existed. But once he discovered them, they became a thing and a big thing. And it looks like they're now becoming a big thing again. And so maybe Jeanette, let's start with you talking a little bit about, you know, what's he doing and in particular, how is what he's doing different from Biden or is it just more of the same?

[C]

Thanks so much, Bill and Scott, it's great to be here on the Trade Guys, a podcast that I have followed for a very, very long. Bill, there's no better career than just to follow you around Washington. And as you know, I also followed you to CSIS through a non resident affiliation with Scott Kennedy's trustee chair for Chinese Business and Economics So it's even more of an honor to be able to merge all of these things for the next couple of minutes to chat through some of the trade issues. So with respect to what's going on, I think that the prevailing answer that I think will hold for the remainder of this term is a lot. There will always be something going on and typically many things going on all at the same time. Think the last week, for example, is ample evidence of that. But in terms of how this administration differs from its predecessor and even in some ways from the first Trump administration is I almost see it as a disco ball. They know so, so much more than they did during the first term. And while President Biden's administration tried to take a, quote, unquote, whole of government approach, that occasionally felt a little bit more cumbersome. Whereas here, because I think the priority of the current administration is on being able to move quickly, to react quickly, and to execute its policy agenda quickly, I liken this to much more like a disco ball, where every agency has multiple facets. Every single facet is looked at as something that is this something that we can bring to bear upon a situation, whether to try to force an outcome or to make a statement or to perhaps get a concession or whatever.

[B]

My immediate reaction is mostly we've talked that Trump is lost in the 50s. You're now suggesting he's lost in the 70s, disco and Saturday night Fever. But either way, what the actual controls, though, that we're talking about here, what do you see as the direction? He rescinded Biden's AI rule, for one example, but seems to be expanding the scope of other controls. What do you make of the AI rule rescission? Is that was that a good idea? A lot of the complaints about it came from the private sector that said it was way too complicated. And there were a number of countries that were very upset about being placed in the lowest tier. Was it smart to get rid of it and do you have any inside poop about what's going to replace it?

[C]

Well, I think you all also took note of Secretary Lutnick's testimony yesterday before the Senate Appropriations Committee, where he promised that a new AI diffusion role was imminent coming out soon.

[B]

You said that a month ago. So fair.

[C]

And I was just about to say that I hope that it's a little bit more imminent than the outbound investment rule was in the previous administration. It seems that the term imminent is pretty flexible. But he did say very near future. And what I had heard in other contexts was about 30 days so, you know, perhaps before July 4th, end of June, early July would be a possibility. With regard to timing in terms of substance, I understand that the administration is seeking something that is simpler, yet able to be more stringent where necessary. So those would be the parameters. It's hard for me to say that I don't support the rescission of the AI diffusion rule since NFTC let them. Two multi association letters, right. The first one was when the AI diffusion rule was first being talked about as a literally imminent announcement within days and there was a purported draft circulating. And we just had the concern that this did not go through the regular rulemaking process. There wasn't really time to form an opinion around a second substance. It was more that there was no anprm, there wasn't even a notice of proposed rulemaking, no opportunity for public comment, very limited industry engagement. And also this rule was sent through to OMB as not economically significant, which is very, very hard to consider. And it just seemed to run afoul of some of the basic tenets of good rulemaking. We followed that up on January 28 with a letter to President Trump and designees that had been announced at that time, including now confirmed Secretary Lutnick, to say, hey, look, we raised these concerns a few weeks ago. We just want to make sure that this doesn't fall through the cracks as we don't believe that perhaps the rescission of certain executive orders or rules might necessarily capture this because this originally, if you'll recall, did have some delayed implementation dates. So we just wanted to make sure that the current administration was aware of it and certainly very pleased to see that they have noted that.

[B]

Well, and they rescinded it before, technically before it went into effect, right?

[C]

That's right.

[B]

By one day or something. I want to come back to the consultation issue, but I also want to ask Scott a question related to this and then get your comment. Jeanette, One of the new controls that has come in that kind of piqued our interest is ethane, which came as a surprise, I think, to a lot of people. It's not usually on the export control screen. Scott, maybe can you tell everybody what ethane is and why it matters? And then, Jeanette, maybe you can explain why it's on the export control list using the disco ball example.

[A]

Ethane is the basic building block of a lot of organic chemistry, but especially plastics. Polyethylene, the ethyl part of polyethylene is reflection of ethane. That molecule is stuck together with long chains of similar molecules to make most of what we know of as plastics. Now the US is a large producer of ethane because of our massive supplies of natural gas. A very low cost natural gas. The thanks to unconventional drilling technologies that cheap natural gas goes into ethane. And ethane is that building block product. But it's such a basic component of so many advanced products. It's unusual to see it on an export control list with something like electronic design automation groups. Design automation is basically AI applied to software. And I get why you might want to control that but. Well, I said you couldn't control ethane. It's like controlling coal would you know what am I missing here?

[C]

I don't think you're missing a thing, Scott. You know, when they sent out my understanding is that included in that and I have not seen the is informed letter that went to I believe it was enterprise products. I don't know if any other producers received this. That's the only one that I've seen reported in the news is that it covered ethane and butane but not propane. So.

[A]

Well. Okay.

[C]

And it's been a very, very long time. But certainly when I was in China a great way to have crippled the people would have been to cut off propane because we all used it for cooking fuel. And you know, you would see gentlemen on bicycles delivering huge not one tank at a time, like a dozen tanks at a time on the back of their tri wheel bicycles and two homes. So it seemed a little odd, but. So I don't think I'm a child of the 70s necessarily, but I will cop to the 70s being one of the decades for which I was around for let's put it that way.

[B]

We won't press you too hard on this. Go ahead.

[C]

Thank you. So with that in mind, I'm going back to my disco ball to say that I think that when the administration was contemplating pressure points and how to apply maximum pressure from as many different directions as possible. Right. Think of my disco ball example that this just happened to be one of them.

[A]

I see. Well, it certainly is important to China because they don't have the resource the natural gas resources that the US does. And so this is something that's probably a fairly important element and it would be hard to replicate the. The technology that converts natural gas to ethane at any short time frame. It's not a complicated process. But doing it at scale takes investment. So. And time.

[B]

So sounds like what you're. You're both saying is that to the extent there's a strategy here, it's More of everything.

[A]

Squeeze China.

[B]

Yeah, more squeeze China. More pressure. We're so used in the export control context to talk about chips and, you know, soft, advanced design and lithography equipment and very advanced technologies, all of which have clear, I think, military applications. And then this one rolls around. When it comes to plastics, we get most of our toys from China. So my grandchildren are going to be very unhappy about this if the, if the consequence is that we starve them of ethane and that means the cost of Nerf guns and plastic toys and things like that goes up. But it doesn't strike me as a security issue. It just strikes me as a pressure issue. So. Comments, anybody?

[A]

That's probably the best way to look at it. I don't know of another approach, but there's, you're right, this guy's a real estate gambler basically, and looking for, looking for ways to, he's always looking for collateral and always looking for leverage. So this sounds like leverage to me toward a better deal with China on a whole range of issues. Is that fair? Jeannette?

[C]

So I was going to ask you this question, actually, Scott, I started wondering, do you think that they picked this because it was the closest analogy or mirror image? Continuing on my analogy here to a critical mineral, that's one way to think about it.

[A]

It is an element that, you know, the modern world is basically made up of concrete, steel, ammonia, and plastics. And natural gas is key to generating both of those last two. It's used for the fertilizers, as a feedstock, ammonium and ammonia products. And it's clearly natural gas is the feedstock for plastics through ethane. So that is one way to look at it. And we tend to think of critical minerals as these rare earths or scarce materials. And, and while there's not much scarce about natural gas, it is not evenly distributed across the planet and it's hard to move. You gotta act on it where it is. So that could be right.

[B]

Jeanette, looking at the expanded controls, let's talk not just about how this affects the Chinese. Jeanette, can you say a few words about how this is affecting American companies, not just on ethane, but on the other controls? Is anybody really being hurt by this, meaning American companies being being hurt by this, or is everybody just sort of going with the flow?

[C]

Well, it's a tough flow to follow for sure. And one of the things that I would say is I think we should take a step back here and look at all of these tools. One of the features of this disco ball approach is that any tool is a good tool. Whereas I think when you, Scott, and I think about these tools, we take a very differentiated approach. To US an export control is a specific thing. Sanctions are different. Foreign investment security is yet again, something different. Look at the tools that have been most commonly applied or applied thus far still within the first six months of this administration, terrorists especially ramp up abuse of Section 232 national security investigations. The outbound investment security program is well underway now with its first announced investigation, export control measures, including holding licenses in order for them to receive review. The is informed letters on EDA software as well as the ethane that we just talked about and suspending already approved export licenses for jet engines to certain civil aircraft parts. When going again, to Scott's Point, China, C919 commercial narrow body passenger jet. There's also, however, been efforts on the other side, and I think we should include these as economic tools. The administration is absolutely laser focused on reshoring manufacturing. So last week we saw the executive order on critical minerals production. Right. And again, that includes waiving certain Defense Production act provisions, doing everything we can to accelerate critical mineral extraction as well as production discovery.

[B]

Let's pursue that for a minute because one of the things we're seeing about export controls is that they work both ways. And China has imposed export controls on a variety of stuff, particularly critical minerals. This has been in the news this week because supposedly one of the consequences of the meeting in Geneva was, was that China agreed to start issuing licenses for the export of those minerals that had been held up. And Trump, relatively recently, several days ago, was complaining that they hadn't done that. And so there was this odd spat about, you know, both sides accusing the other of breaking the deal. And there was apparently a Trump Xi Jinping conversation last night that produced, at least on both sides, some semblance of happy noise. But there does seem to be some sense that the Chinese are beginning to actually issue the licenses. So maybe, Jeanette, you could give us some insight on what's going on on the Chinese side. My reaction in part was, you know, they have a bureaucracy just like we do, and when they say they're going to issue licenses, that that doesn't mean that tomorrow you can export. It means that there's a process. Is that what's going on here? Or are the Chinese in essence playing the same kind of pressure game that.

[C]

We'Re playing, you know, without actually sitting in their offices? I think it's just speculation. Right. But my speculation, after having spent a lot of time with them, is yes, they absolutely have a process. That doesn't mean that they would not necessarily be using this too for pressure reasons as well. But you know, it is a bureaucracy and everything needs sign off from multiple places. Right. So it's not simple. Also, China has not been idle during the last four years. They learned and they learned that, oh, we should start thinking about our own economic security tools. And so we need an export control law, which they've had. But, oh, perhaps we should also develop a dual use list because of course China is not a member of the wasana, thus does not have any interest or obligation necessarily in adopting either the munitions list or the dual use list, which is what our commerce control list is based on. And they came out with an anti foreign sanctions law. They came out with an unreliable entities list, their own version of an entity list. They have been steadily building all of this and they have taken special steps to be particularly focused on building the infrastructure to be able to weaponize fundamentally their very fortuitous access to critical minerals and the fact that to Scott's point, there is just such reliance on this right now.

[B]

How difficult are they making our lives?

[C]

I think it may be less about how difficult they make our lives than number one, how much more difficult they can be because we haven't even thought about things like currency and all of that stuff. Stuff, Right. What could happen in the financial markets? I think they're too consumed with their own domestic economic woes at the moment. Possibly not sure. But I think this conversation needs to include China's ability to withstand U.S. pressure. I mean, we talk about both sides having these economic tools. We've seen the Trump administration throw what they have at it or what they've decided to throw at it. Very recently I have in fact, for another CSIS program, analyzed several articles that looked inward in China by Chinese academics and think tanks saying what we think we can withstand in terms of things like tariffs or other pressures or export controls. And one of the things that China has tried to do is to double down on its own indigenization. Just as I mentioned, the efforts that we're doing to reshore manufacturing, the President's executive order, you know, China's doing the same thing. They're trying to run faster too.

[A]

Well, it seems to me that's what really happened when there was a first the big escalation in tariffs and then the withdrawal and the meetings in Switzerland where Secretary of Assent and Ambassador Greer represented the US and they decided and they backed out. They backed off for a of time. Period, period of time. That looked to me like two combatants who had some knowledge of their own strengths. But it was only when conflict became real that they realized their own strengths and weaknesses. And there was a moment for recalibration. I wouldn't be surprised if both sides were doing that. Now look, we have a huge consumer economy and that's both a strength and a weakness in these situations. Much like China has a huge export led component of their economic performance that makes them a trade surplus country. And usually when trade deficit countries stop buying, the trade surplus country has lots of unemployment problems to deal with. So there are pressures both ways and probably some surprises both ways. My guess is people on both sides are trying to sort through that and determine what's the best next step. But it's a little. I mean, it continues to be volatile, continues to be confusing, but I think we're just going to have to live with that.

[B]

One of the criticisms of US Export control policy, particularly on semiconductors and the subject of an ongoing research project here at the Shoal Chair, has been that the effect of what we're doing has really accelerated what you were just talking about, Jeanette, accelerated their indigenization programs, that it's accelerated their efforts to develop their own technology, which they hope will eventually surpass ours. We haven't finished the project yet. We've concluded that the Chinese made a policy decision to try to do that longer ago than we might think, probably 10 to 15 years ago. But the question of whether they're what we've done has accelerated them, what they're doing anyway. It's an interesting one. Do you have any thoughts about that?

[C]

So when I talk to people about this, and particularly people that either are in the administration or influential to the administration, everyone says China is going to indigenize anyway. That should not prevent us from trying to control that which is most critical, our crown jewels, so to speak, to borrow an even older term, right, to keep them out of the hands of those that would use them potentially against us. And certainly I think it's a fairly uniform position in D.C. that everyone sees China for an adversary or potential adversary, whether that's in an economic sense, a strategic sense or a military sense. And you know, Bill, you asked earlier what industries are affected. My first thought really goes to, well, what people are not affected? I think all Americans are affected by policies. And I struggle to think of an industry that is not affected. To Scott's point. You know, think about retail and what you said earlier, Bill, about your grandkids perhaps being a little bit disappointed to not have quite so many plastic toys.

[B]

According to Trump, they don't need them. It'll be fine with just, you know, one toy water pistol rather than four toy water pistols. Of course, everybody who's ever been five years old knows you can't really have a squirt gun war without an armada of squirt guns. I mean, you know, one is not nearly enough if you want to launch an attack. One of our great days in our neighborhood was when we did that with the neighborhood kids. We had a giant water balloon fight. And it took a lot of plastic balloons, that's for sure, to, you know, to make that work. Ultimately, I believe my side won because I discovered the hose, which was sort of the nuclear weapon of water fights.

[A]

You had a supply chain strength that you turned into the tactical advantage.

[B]

That would be the sophisticated way to put it. Yes. At the time, we just got them all wet and it worked very well. Coming back to something you said much earlier, what I promised we would get back to, Jeanette, is the consultation question. One of the things that was rumored from people leakage from the current undersecretary at Biscuit initial all hands meeting was a comment that he didn't intend to consult so much with business, which I found, if true, very worrisome. What's your impression of the kind of consultation that we've had with the Trump people, particularly now that, you know, the officials are getting in place? You comment on the inadequacy of that in Biden. Is it any better under Trump?

[C]

I don't think it's a better or worse. I think you're always going to go through periods where for a number of factors, none of them nefarious. Right. Whether it's staffing gaps, whether it's just timing issues, access can be harder or easier to get. I've not actually seen a diminution in terms of access, and our members have not reported that either. I think companies are getting access not only to Undersecretary Kessler and other BIS staff, but also to Secretary Lutnick, to Ambassador Greer, maybe some other folks in other parts of the administration as well. I would also note that I have seen Under Secretary Kessler and other BIS staff, career staff, continuing to conduct outreach to industry groups, speaking at conferences and things like that. Under Secretary Kessler himself was recently spoke at the U.S. chamber of Commerce's China Conference. So, you know, dialogue does continue.

[B]

Well, all good news. I think. It's good to hear that. I think the rubber will meet the road, if that's the right term. When they actually start issuing regulations. Consultation is one of these elastic concepts. I think there's a tendency on the part of the affected parties in this case business to say consultation means that you have to agree with us. And the government's view tends to be consultation means we'll let you know what we decide. You know, there's a big gap between the two. I hope you know we're heading in the right direction on this.

[C]

I agree. I am still worried though, Bill, for example, on the Section 232 investigation announcements, there are currently seven pending Section 232 investigations out there. Right. Comments have closed for quite a few, for about half of them, I think. And the comment periods were all uniformly 21 days on industries as complex as semiconductor manufacturing equipment and semiconductors themselves, including derivative products. And if you think your grandkids will be unhappy about not having enough plastic toys, think when they don't have enough toys that move because of that chip inside of them. Right. Trucks, pharmaceuticals, critical minerals. Again, these are big vast categories. And now we have one on civil aircraft and jet engines and aircraft parts. The earlier ones on paper, timber, not paper, but lumber and timber and their derivative products. These short timelines concern me because it's hard to provide fulsome enough impact in that short period of time.

[B]

Let me ask both of you a question about that. For the classic 232s, steel, aluminum, lumber would be another example. You have a domestic industry that is at least by some account struggling and certainly a domestic industry that wants protection. I mean, all three of those have been calling for it in various forms. Aluminum a little bit less than the other two for some time with the investigations that you mentioned. Kind of a different situation. You know, if you talk to the aircraft people, this is not an investigation they sought and it's not an investigation they want. Partly because all commercial aircraft, the United States have so many foreign component parts, including engines. The same I think is true for pharmaceuticals. I think people, they're very concerned about this and I think the same is true with semiconductors. Do you think that A, we've gotten away from the, the typical kind of 232 and B, do you think that in these other kinds of cases, aircraft chip, that tariffs are a rational remedy if they decide that there's a problem?

[A]

Well, this seems to me to be one of those situations where all you have is a hammer, everything looks like a nail. The Trade act of 1962 with its section 232 had a very specific element in mind for national security protections and that seems to me to not fit very well for some of these new categories. I think it was a use that then Canada Trump in 2016 campaigned on. So he was going to use it on steel and aluminum. And as you point out, Bill, those are industries. The steel industry is one that has sought protection and often gets it in the form of Buy America or some other element of policymaking. But these other industries are quite global in their nature. They're diversified in their product mix and in just the composition of the products themselves. And while there may be an interest in returning US Production of, say, pharmaceutical precursor chemicals, fine chemistry is by no means unique in terms of its, you know, where the capital is installed and where the technology and know how to make those products lies. They're quite global industries. So I don't, I just don't know how, how they're going to square the circle. I'm even more concerned with Jeanette's comments that the short comment periods on very complicated industries, 21 days, is barely, barely time to, to write the one on one textbook, let alone to really examine all the elements of the industry itself. And it's the dimensions that are far exceed any single producing nation. So I think it's, I think we're headed for a mess.

[C]

So, Scott, to follow on to that, I'm going to double down here and say that I'm even more worried because I understand that the investigation on pharmaceuticals is already drawing to close. So that is a very short timeline. After the close of the comment period. I haven't looked. I don't recall how many comments were filed on pharmaceuticals. I can tell you NFTC was one of them. I can tell you that for critical Minerals, there were 495 comments, including again, NFTCs. And can you even read all of that in just a few weeks? Because I understand that the intention is to bring all of these investigations to close very quickly. Bill, do you have any thoughts on that? And you know, this use of publishing everything in interim final rule form going forward?

[B]

Well, the Biden folks invented that one, the interim final. My experience with 232s has been that, I mean, maybe these guys will break the mold, but the mold generally has been that they end up taking like a lot of things in the bureaucracy, the time available. There's a Peter principle about that thing. You know, work fills the time that's available to it. You get 270 days to do these things. And I remember in 28, 2017, when they launched the first steel one, Secretary Ross said, well, we'll get this done in 60 days. This is important. Well, he delivered his report to the president on the 269th day because it takes time. You have to, I mean, if you, if you're going to take the investigatory process seriously, which is the question here, then you have to do two things. You have to decide if there's a threat because that's what the statute requires. And then if you decide there is a threat, then you have to decide what to do about it. And it's an interagency process always. And different agencies have different ideas on what to do about it. And with some of the ones that we've just been talking about, I think pharma chips and aircraft in particular, I think there won't be any shortage of people in some agencies of the government coming in saying maybe this is a problem, but tariffs are not the answer. Tariffs are just going to make our products less competitive. And these are industries, chips and aircraft in particular, where the US Is a major exporter. Why do you want to make Boeing less competitive by increasing the price of all their parts and components? So the idea deciding what to do about this may end up being complicated. And even though we have a president that only has one tool, you know, which is tariffs. But just slapping on 25% tariffs on these things may not actually be the right answer. So. But Jeanette, you're quite right. They appear to be on a fast track. Secretary Lutnick said in testimony, I think the day before yesterday, he's had a twofer this week that they expected to finish their aircraft report by the end of the month. Well, that comment period closed on June 3, so that too is on a really tight timeframe. Now, on the other side, you know, the same people, and not just Lupnick, but the others, they've been predicting, you know, rolling out new trade agreements, you know, every two or three days for the last month. And so far we have one. So I do take these predictions of when we're going to finish all this stuff with a grain of salt. But you're right that the, the 21 day comment period is, is truncated. And the signal to me is that these may not be serious investigations and they may be, you know, pre decided. And the investigation, quote, unquote, is actually, let's just construct a rationale for what we want to do anyway. Not the way government's supposed to work, but there you go.

[C]

I agree. I can't agree more. You start with an executive order, then follow with saying this is a threat, then you open a section 232 with a truncated comment period to your point. And then you say we will not hold public hearings.

[B]

Ah, yes. It'll be interesting to see if they go down that road as well. Well, we're at time. In fact, we're beyond time. Jeanette, you've been very generous with yours and we appreciate it. Scott, any closing comments?

[A]

Well, this is a terrific conversation and we thank you for coming the program. Your knowledge really helps our listeners and so we're delighted to have you and hope you'll come back sometime, become an official trade guy at some point.

[C]

I'd be so honored to return in any capacity anytime. It's always a pleasure. Scott and Bill, thank you very, very much.

[A]

Thank you.

[B]

Thank you to our listeners.

[A]

If you have a question for the trade guys, write [e-mail] that's tradeguyssis.org we'll read some of your emails and have the trade guys react to it. You've been listening to the Trade Guys, a CSIS podcast.