December 31, 2024
Goodbye to Small Yard, High Fence
On Dec. 2, the United States announced a new round of export controls on advanced semiconductors to China, and more restrictions are expected soon. It was among the final pieces in an enduring legacy of the Biden administration: a significant expansion in the scale and scope of restricting China’s access to technology.
To explain this policy over the past two years, including this month’s announcement, the administration repeatedly turned to one metaphor: a small yard with a high fence. It means that sensitive technologies should be kept within a yard protected by a high fence of trade and investment controls. But the yard should be small, limited to a narrow set of advanced technologies with military applications, while broader commercial trade and investment with China would continue.
Will Mr. Trump’s more confrontational approach work better?
As the Biden administration enters its final days, the contradictions of this “small yard, high fence” strategy are piling up. It is an attempt to achieve two goals that are inherently in conflict — pursuing a fundamental shift in the geopolitics of technology competition without upending the global economic order. The administration is falling short on both of these objectives. When Donald Trump takes office, his foreign policy team is likely to take the technology control tools that the Biden team developed but was reluctant to employ broadly and to unleash them at full force, resulting in significant economic disruption. So much for that manicured small yard.
The idea behind the “small yard, high fence” strategy made sense at first and reflected the Biden administration’s attempt to balance competing pressures in its relationship with China: the need to maintain, as the national security adviser, Jake Sullivan, put it, “as large of a lead as possible” over its primary strategic rival in foundational technology without severing all meaningful economic links.
Read the full article on The New York Times.
More from CNAS
-
Edward Fishman: Weaponizing Finance and What It Means for Portfolios
Podcast
Edward Fishman, adjunct senior fellow at the Center for a New American Security, explains how sanctions, chokepoints, and financial tools are redefining market risk and opport...
By Edward Fishman
-
Happy Summer from Derisky Business!
Podcast
While Derisky Business goes on summer break, revisit your favorite episodes of the podcast and dive into the Summer Reading List, featuring book recommendations from previous ...
By Emily Kilcrease & Geoffrey Gertz
-
The Derisky Business Reading List
Commentary
While Derisky Business goes on summer break, revisit your favorite episodes of the podcast and dive into the Summer Reading List, featuring book recommendations from previous ...
-
Podcast
Transatlantic Security / Energy, Economics & Security
From Russia with RiskHere on the Bear Market Brief, a lot of what we focus on is, simply put, risk: what might happen, and what might it mean? On this episode, Rachel Ziemba, an adjunct senior fel...
By Rachel Ziemba
As the Biden administration introduced a series of new trade and investment controls to curtail China’s acquisition of advanced technologies, it has repeatedly turned to a familiar metaphor: a small yard with a high fence. In a new Guest Essay for the New York Times, Geoffrey Gertz assesses the contradictions and limitations of this strategy to limit access to certain sensitive technologies without upending the broader U.S-China economic relationship. With the Trump administration preparing to return to power, it is likely to abandon the constraints of a “small yard” and deploy the toolkit the Biden team developed at full force, resulting in significant economic disruption.