Tens of thousands of license requests for exports by American companies, including to China, are blocked due to dysfunctionality within the government agency responsible for approval.
The Bureau of Industry and Security (BIS), under the coordination of Commerce Secretary Howard Lutnick, is facing institutional paralysis: lack of clear rules, layoffs, resignations, and interrupted communication with industry representatives, sources told Reuters.
The most visible case is that of Nvidia, which is awaiting the license to deliver the H20 chips to China. Although the U.S. government had announced in mid-July that approvals would come soon, sources say that licenses have not been issued yet, jeopardizing orders worth billions of dollars.
An American official stated that the current deadlock is the most serious in the last three decades. In 2023, the average approval time for a license was 38 days, and 2% of the nearly 38,000 requests were rejected.
However, BIS maintains that it will no longer "blindly approve" requests that could pose risks to national security. But for companies, the blockages are becoming costly. Meghan Harris, a former adviser at the National Security Council, said: "Delays and lack of predictability put us at an unnecessary disadvantage."
Internal and External Dissatisfaction
Several employees have criticized the leadership style of Jeffrey Kessler, the new BIS undersecretary, accusing him of micromanagement and lack of transparency. Upon assuming the position, he asked employees to limit contact with industry representatives and to record all meetings in a table.
Frustration is growing among exporters. Sean Stein, president of the U.S.-China Business Council, warns that "whole sectors" are stagnating due to lack of approval for semiconductor production equipment.
"Meanwhile, Chinese companies are finding local or other country suppliers. The longer we delay, the more market share we lose," he says.
Jim Anzalone, a commercial consultant from Florida, says he has received negative responses to requests submitted months ago for exporting equipment to Latin America and Asia.
"No one officially states what the policy is or when the situation will be unblocked," he said.
Moreover, several key positions remain vacant, and staff departures continue. This week also saw the retirement party of the interim director of the Office of Export Control, Dan Clutch, another experienced expert leaving the agency at a critical time.