Tech groups protest anti-China provision in US budget resolution

A little-publicized provision in a U.S. government budget resolution that largely prohibits four agencies from using Chinese-made IT products could backfire, several tech trade groups said.

The provision, in a 2013 budget resolution signed by President Barack Obama on March 26, bars the U.S. Department of Commerce, the Department of Justice, NASA and the National Science Foundation from acquiring IT systems manufactured by companies owned or subsidized by the Chinese government.

The prohibition is limited, however, if the head of the agency, working with the Federal Bureau of Investigation or other federal cybersecurity experts, conduct a risk assessment of the IT product for "cyberespionage or sabotage," according to the language of the amendment to the budget resolution.

That amendment, added to the budget resolution with little fanfare, will "set a troubling and counterproductive precedent that could have significant international repercussions and put U.S.-based global IT companies at a competitive disadvantage in global markets," said a letter sent to congressional leaders Thursday by 11 trade groups, including BSA, TechAmerica, the Semiconductor Industry Association and the U.S. Chamber of Commerce.

The budget amendment could impede the U.S. government from acquiring the "latest cutting-edge IT products," the letter said. The requirement to assess IT products will slow the federal acquisition process, it said.

In addition, the provision could lead the Chinese government to retaliate against U.S. IT vendors, and it could encourage "copycat" legislation in other countries that limits their governments' purchase of U.S. products, the letter said.

"Fundamentally, product security is a function of how a product is made, used, and maintained, not by whom or where it is made," the letter said. "Geographic-based restrictions run the risk of creating a false sense of security when it comes to advancing our national cybersecurity interests."

Several lawmakers have renewed their long-time concerns about China cyberespionage this year, after security vendor Mandiant in February pointed to a hacking group allegedly linked to the Chinese army.

The budget amendment originated in the Commerce, Justice and Science subcommittee of the House of Representatives' Appropriations Committee, according to published reports. A spokeswoman for Subcommittee Chairman Frank Wolf, a Virginia Republican, didn't immediately respond to a request for comments on the trade groups' letter.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com.