Such moves would expand the reach of U.S. sanctions beyond financial targets to the deployment of a weapon used only once before — to nearly cripple the Chinese tech giant Huawei.
The weapon, known as the foreign direct product rule, contributed to Huawei suffering its first-ever annual revenue drop, a stunning collapse of nearly 30 percent last year.
“This is a slow strangulation by the U.S. government,” Dan Wang, a Shanghai-based technology analyst with research firm Gavekal Dragonomics, said of Huawei. The rule cut the firm’s supply of needed microchips, which were made outside the United States but with U.S. software or tools.
On Sunday, the State Department ordered the departure of all family members of U.S. Embassy personnel serving in Kyiv, citing the “threat of Russian military action.” The evacuation comes as the Biden administration weighs sending thousands of U.S. forces, as well as armaments, to the Baltic states and Poland to reinforce NATO, officials said. The officials stressed that no final decision has been taken on possible troop deployments, which were first reported by the New York Times. The United States is not planning to send any additional troops to Ukraine. There are about 200 military trainers in Ukraine. Most are Florida National Guard personnel.
The effort to use export controls could face head winds from American and European business interests that fear using export controls could lead to Russian retaliation in other spheres — and eventually cause foreign companies to seek to design U.S. technology out of their products. That’s because the extension of the rule beyond a single company like Huawei to an entire country or entire sectors of a country is unprecedented.
“It’s like a magic power — you can only use it so many times before it starts to degrade,” said Robert D. Atkinson, president of the Information Technology and Innovation Foundation, a think tank. “Other countries will say, ‘Oh, man, the U.S. has total control over us. We’d better find alternatives.’”
Russia is vulnerable because it doesn’t produce consumer electronics or chips in large quantities, analysts say. In particular, it doesn’t make the highest-end semiconductors needed for advanced computing, an area dominated by Taiwan, South Korea, the United States, Europe and Japan.
Cutting off the country’s chip imports “would invariably hit the Russian leadership’s high-tech ambitions, whether in artificial intelligence or quantum computing,” said Will Hunt, an analyst with Georgetown University’s Center for Security and Emerging Technology.