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.
While the administration wanted to portray its approach as narrow and targeted, the reality was more complicated. The administration never defined which technologies would form the boundaries of its small yard, in part because it’s difficult to predict what products might pose security risks in the future. This left the door open for future expansions.
And even if the number of restricted technologies was limited, their impact was not. Semiconductors and artificial intelligence are foundational technologies with wide-ranging applications, so the effect of blocking them on China’s economic and technological development will be substantial.
Over the past two years, the administration has released a series of new export controls, restrictions on outbound investments and limits on transferring data to China. Although each individual measure was narrow and tailored, the cumulative effect was far larger.
The “small yard, high fence” framing did help win over some skeptical U.S. allies and partners, and that’s an important victory for the Biden team. Some of them even appropriated the metaphor. When Britain announced a review of its National Security and Investment Act in November 2023, it described the new approach as a “small garden, high fence.”
But the extent of cooperation with allies remained limited, in part because these governments did not fully trust the Biden administration’s promise to stay within self-imposed and undefined limits. Allies also worried that in the absence of effective legal guardrails, the policy tool kit the Biden administration was developing would one day be turned over to a less restrained U.S. administration that might greatly expand the scope of the yard. They are now looking apprehensively to the coming Trump presidency.
China, of course, never bought the “small yard, high fence” idea. It does not accept the premise that national security technology controls are distinct from broader economic competition between the two powers, and it could see the wide-ranging implications of these supposedly narrow restrictions. The Biden administration’s attempts at reassurance did not dissuade China from responding with retaliatory measures, including this month’s announcement that China would block the export of certain critical minerals to the United States.
President-elect Trump, for his part, does not seek to separate economic and security competition, and has shown little interest in minimizing disruption or cooperating with allies. His incoming administration is poised to severely curtail trade and investment with China while pressuring allies to do the same.
Will Mr. Trump’s more confrontational approach work better? His team will need to tackle the same challenges that the Biden administration faced, including strengthening enforcement tools to crack down on smuggling and evasion, and cajoling allies to introduce their own controls. And the Trump administration will eventually need an answer to just how far it intends to go in decoupling the U.S. economy from China and how much economic disruption it is willing to tolerate in the process. Despite its flaws, the “small yard, high fence” served as a necessary brake. The Trump team will need some limiting principle of its own.
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