Senate Advances Bipartisan Bill Targeting China’s Smuggling of U.S. Semiconductor Technology

The U.S. Senate has passed bipartisan legislation aimed at cracking down on the illegal export and smuggling of American-made semiconductor technology to China, a move supporters say is critical to protecting national security as artificial intelligence rapidly reshapes the global balance of power.

The bill, led by Sen. Mike Rounds (R-SD), would create a whistleblower reward program designed to expose illegal semiconductor exports and strengthen enforcement at a time when China continues seeking access to advanced U.S. chip technology.

The legislation, known as the Stop Stealing our Chips Act, S. 1473, was introduced by Rounds in April 2025 alongside lead Democratic cosponsor Sen. Mark Warner (D-VA). After clearing the Senate, the measure now heads to the U.S. House of Representatives.

“I look forward to working with our colleagues in the House to get this important legislation through Congress and to President Trump’s desk to be signed into law,” said Sen. Rounds, who in April 2025 sponsored the Stop Stealing our Chips Act, S. 1473, alongside lead cosponsor U.S. Sen. Mark Warner (D-VA).

If enacted, the measure would amend the Export Control Reform Act and establish a whistleblower reward program within the Bureau of Industry and Security at the U.S. Department of Commerce. The goal is to encourage credible reporting of illegal export schemes and help stop American-made semiconductors from being smuggled into China.

“I am pleased that the Stop Stealing our Chips Act has passed the Senate,” Sen. Rounds said.

“The United States has taken extensive measures to prevent American-made semiconductors from falling into the wrong hands, particularly China; however, China continues to smuggle these chips into their country,” Rounds added.

As artificial intelligence becomes increasingly central to military, economic, and technological power, lawmakers have warned that allowing Beijing to obtain advanced U.S. chips poses a direct threat to American security.

Rounds described the issue as “a grave national security concern.”

“Our legislation would strengthen BIS’s export control enforcement by rewarding whistleblowers with credible information on illegal actions to come forward,” said Sen. Rounds.

According to a summary from Rounds’ staff, the bill would direct BIS to create a secure public platform where whistleblowers could submit reports. It would also establish a dedicated fund to pay rewards and operate the program, using fines collected from export control violations rather than placing the burden on taxpayers.

The bill would also include confidentiality protections and anti-retaliation safeguards for whistleblowers who come forward with information about illegal semiconductor exports.

Under the legislation, whistleblowers who provide original information that leads to fines against violators would be eligible to receive between 10 percent and 30 percent of the penalties collected. Exceptions would apply to known terrorists, criminals, and federal employees acting within the scope of their official duties.

The proposal would require whistleblowers to receive status updates every 30 days, while credible reports would have to trigger formal inquiries within 60 days.

Any remaining money from collected fines would be sent to the U.S. Treasury.

The Senate action comes amid heightened U.S.-China tensions over trade, artificial intelligence, Taiwan, and the fallout from the war with Iran. It also follows President Donald Trump’s high-stakes summit in China earlier this month, where economic and strategic issues were at the center of discussions with Chinese President Xi Jinping.

Trump announced that Xi agreed to purchase 200 Boeing jets during their high-level meeting in Beijing, a major development for American manufacturing and one that underscored the President’s push to secure tangible economic wins for U.S. companies.

In an exclusive interview with Fox News host Sean Hannity, Trump described his talks with Xi as “very good” and said China’s commitment went beyond what Boeing had expected.

Specific terms of the agreement, including aircraft types and delivery timelines, were not disclosed, according to Fox Business.

President Trump arrived in China on Wednesday with a delegation of leading American business executives to meet with Chinese officials and corporate leaders. The visit marked Trump’s first trip to China since 2017 and came at a time of rising geopolitical strain between Washington and Beijing.

Boeing CEO Kelly Ortberg joined the delegation and previously described the trip as “a meaningful opportunity” for the American aircraft manufacturer.

Although Ortberg declined during a recent analyst call to identify the exact number of aircraft under discussion, he said he was confident that any agreement reached between Trump and Xi would likely include plane orders.

Some reports indicated China had initially shown interest in purchasing 500 Boeing 737 Max aircraft.

The broader push reflects a familiar theme of President Trump’s second term: strengthening American industry while confronting foreign adversaries that exploit U.S. innovation, trade, and technology for their own strategic gain.

“I am proud to announce the site of the NATIONAL GARDEN OF AMERICAN HEROES. This magnificent exhibition of statues will be located in West Potomac Park, which we are transforming into one of the World’s most beautiful public spaces,” Trump began.