Goodbye to Small Yard, High Fence

Opinion|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.

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 unleash them at full force, resulting in significant economic disruption. So much for that carefully 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 large of a lead as possible” over its primary strategic rival in foundational technology, as the national security adviser, Jake Sullivan, put it, without severing all meaningful economic links.

This has proved to be exceedingly difficult. When the administration unveiled the first round of sweeping semiconductor export controls on China in October 2022, some analysts described it as amounting to “a declaration of economic war.” And it came with sharp economic and diplomatic costs. U.S. tech companies worried that the high fence might completely shut them out from the Chinese market. U.S. allies in Europe and Asia shared some of Washington’s concerns about China’s military modernization program but were wary of making a sudden break with Beijing.

To ease those concerns, the Biden administration tried to be cautious and deliberate in introducing new restrictions. Just a week after the semiconductor export controls were announced, Mr. Sullivan deployed the “small yard, high fence” metaphor to explain the administration’s approach. After that, “small yard, high fence” appeared time and again in talking points and news releases as the administration rolled out new controls and restrictions on advanced technologies.