THE FOREIGN SERVICE JOURNAL | JUNE 2025 47 A 1950s Soviet propaganda poster reads: “Soviet means it’s excellent!” of export controls is how arduously the Soviet Union lobbied against them. Soviet efforts to disrupt Western solidarity were often successful, since the Coordinating Committee for Multilateral Export Controls (CoCom), the forum established by the U.S. to coordinate export control policy with allies, was a nonbinding arrangement. The most notorious breach, the Toshiba-Kongsberg scandal, supplied the USSR with $17 million of Japanese computer-controlled machine tools to produce quieter submarine propellers. When this came to light in 1982, Washington imposed sanctions on Toshiba to the tune of $30 billion amid congressional claims that the breach jeopardized U.S. national security. Indeed, if more stringent controls could have averted a relatively small transaction causing tens of billions in damages, it would be a compelling case for robust export controls. The $30 billion estimate, however, was primarily based on a hyperbolic claim that the entire U.S. nuclear submarine fleet would need to be replaced, leaving the actual magnitude of the damage unclear. From Intuition to Evidence Export controls have served as a key policy tool—or, to borrow the blunter vernacular of the 1950s, a potent weapon of economic statecraft—for 75 years. Yet their effectiveness has seldom been rigorously evaluated. Without precise metrics, deploying export controls resembles artillery fire without forward observers: potentially powerful but dangerously imprecise. As Schelling wrote, export control policy is a double-edged sword: It inflicts harm on both target and implementer. This underscores that striking the right balance—making sure the adversary bears the heavier cost—is the crux of effective technology competition policymaking. Consider the U.S. satellite industry. Export controls introduced by the 1999 National Defense Authorization Act aimed at limiting satellite technology transfer to the PRC, but they inadvertently strengthened European competitors. As a result, the U.S. share of the global commercial satellite market dropped from 73 percent in 1995 to just 25 percent in 2005. U.S. market share has since partially recovered to about 50 percent, but this recovery was notably driven by other policy shifts, related to commercial space ventures, not export controls. Episodes like this one highlight the analytical complexities facing contemporary U.S.-China technology competition. Successful export controls cannot rely solely on strategic intuition; they require continuous, data-driven analysis that accounts for second- and third-order effects, such as Beijing’s industrial policy responses, supply-chain adaptability, domestic substitution capabilities, sectoral investment cycles, impacts on American companies’ R&D spending, and the relationship between technology inputs and downstream military and industrial capabilities. The Cold War–era approach of deploying export controls with minimal empirical scrutiny may have sufficed against the Soviet Union’s isolated, inefficient technological ecosystem. It will prove inadequate, however, against China’s far more dynamic innovation landscape. Policymakers must therefore embrace an adaptive evidence-based framework grounded in predictive models of technology diffusion and rigorous economic-impact assessments. Such a framework will enable decision-makers to answer critical questions: To what extent do controls accelerate technological substitution and innovation within China? Should restrictions aim only to preserve a qualitative U.S. military edge, or focus on U.S. leadership in critical civilian technologies that underpin economic productivity? Ultimately, only a data-driven policymaking process will strike the right balance of denying critical technologies to competitors while safeguarding America’s own economic strength. While Commerce owns the export control portfolio, State should supplement its own modest cadre of technology‑ focused analysts and reporting officers to collect more evidence on the impact of export controls and loop those findings into policymaking. n PICTORIAL PRESS LTD / ALAMY STOCK PHOTO
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