Washington attacks Commerce licensing

Jeffrey Kessler, the Commerce Department’s export-control chief, came under renewed attack in Washington this week as China hawks accused his office of letting export-license decisions bog down at a critical point in the U.S. semiconductor campaign. Politico reported on July 8 that former Bureau of Industry and Security officials and people close to the administration said delays were stalling decisions on chip-related licenses and creating uncertainty for companies and partners. DeepSeek, one of China’s best-known AI startups, is developing its own artificial intelligence chip to reduce reliance on U.S. technology, according to reports published July 8. The move adds a second pressure point to Washington’s strategy: even as U.S. officials debate how tightly to control advanced chips, Chinese firms are working to replace them. (yahoo.com) Taiwan markets registered the strain on July 9. The TAIEX closed down 379.8 points at 45,354.61, while TSMC fell NT$50, or 2.03%, to NT$2,415 after a late sell-off, according to BigGo Finance. ### Why is Jeffrey Kessler under fire now? Politico reported on July 8 that critics inside the export-control world say Kessler’s management of the Bureau of Industry and Security has contributed to licensing bottlenecks, with decisions on sensitive exports moving too slowly. (finance.yahoo.com) The report cited former BIS officials, career staff and people close to the White House who said key agency functions were being slowed by delays in decision-making. (finance.biggo.com) Jeffrey Kessler has led BIS since March 2025, according to trade publications that have tracked the agency’s licensing backlog and congressional scrutiny. Those reports said the bureau’s challenge is not only blocking restricted technology but also processing lawful dual-use exports in a predictable way. ### What is the licensing fight actually about? (yahoo.com) The Bureau of Industry and Security handles export licenses for U.S. goods, software and technology that can have both commercial and military uses. In semiconductors, that means the licensing system can determine whether companies ship advanced chips, chip tools or related technology to destinations that Washington considers sensitive. (wttlonline.com) Former officials cited by Politico said the immediate complaint is not that Washington has abandoned controls, but that the process is becoming harder to navigate. Their argument, as described in the report, is that slow or inconsistent licensing can undercut enforcement and leave companies unsure which transactions will be approved. ### What does DeepSeek’s chip project add to the story? (wttlonline.com) DeepSeek is developing its own AI chip, according to reports carried by Yahoo Finance and other outlets on July 8. Reuters, cited in those reports, said the project could reduce the startup’s dependence on Nvidia and Huawei chips used to train and run its models. U.S. export controls have already cut Chinese access to Nvidia’s most advanced processors, and reports said DeepSeek had relied on older Nvidia H800 chips and Huawei Ascend processors after Washington tightened restrictions. (yahoo.com) That makes DeepSeek’s in-house effort relevant beyond one company: it shows a Chinese AI firm trying to redesign its supply chain around U.S. controls. (finance.yahoo.com) ### Why did Taiwan stocks get pulled into it? Taiwan’s market remains a proxy for the global chip trade because TSMC sits at the center of advanced semiconductor manufacturing. On July 9, BigGo Finance said TSMC was hit by a 6,261-lot sell order in the final auction, helping drag the broader market lower. The same report said turnover shrank to NT$944.3 billion and foreign investors were taking a conservative stance. (finance.yahoo.com) ASE Technology Holding rose 8.32%, but MediaTek and Delta Electronics also finished lower, underscoring that the selling pressure was broad enough to hit several major technology names. ### What comes next for the companies and officials involved? TSMC’s next scheduled milestone is its July 16 earnings date, according to Yahoo Finance market data. (finance.biggo.com) In Washington, the next test for Kessler and BIS will be whether export-license decisions move faster as pressure from China hawks and industry critics builds. (finance.yahoo.com) (finance.biggo.com)