The Rule of Law Meets the Law of Power

Remarks at the Federalist Society’s National Lawyers Convention, November 7, 2025

As a non-lawyer at the National Lawyers’ Convention, I can’t help but feel a bit like I’m in the worst remake of Suits ever.

But I still hope that I can say some things that might be interesting or provocative for this group of legal scholars, on a topic I’ve spent ten years living at the heart of: Our export control policy, and the modulation of commerce between the United States and China.

The legal architecture we’re using to compete with China was built to regulate Soviet wheat sales, not to contain a manufacturing superpower that controls global pharmaceutical inputs and mineral processing.

I’m a fan of small government, and a deep believer in the limits of state power as articulated in our Constitution.

But I’m also an American citizen who recognizes that our current legal framework is structurally incapable of denying resources in peacetime to a hostile foreign power that is the world’s second-largest economy.

For the past ten years, I have watched our government attempt to prevent technology transfer to Chinese military companies using authorities designed for Colombian drug cartels and Iranian banks.

The result has been predictable, and strategically untenable.

I would point to three failures:

First, our blacklist system is structurally inadequate.

Since 2018, Commerce has added nearly 1,000 Chinese and Hong-Kong based entities to the Entity List.

That sounds impressive — until you realize there are more than 25,000 Chinese companies that supply the People’s Liberation Army with weapons and equipment — and they spawn subsidiaries faster than our interagency process can designate them.

In fact, designating a single entity can take months, sometimes even years — and it doesn’t always stick.

The Xiaomi v. Department of Defense case in 2021 is a clear example of this problem. Here is a company that had received awards from the Chinese military — but was able to successfully challenge its designation because DOD couldn’t prove specific military ties to the satisfaction of a federal judge.

The result has been frustrating: We’re playing whack-a-mole with due-process hammers while China runs a unified strategy designed to exploit our procedural constraints.

Second, we already possess powerful authorities that sit unused.

Executive Order 13873 — the ICTS rule — grants sweeping power to prohibit entire classes of transactions with specific foreign adversaries. The Commerce Department could, tomorrow, restrict all U.S. transactions with Chinese military enterprises.

Yet Commerce has invoked ICTS only twice since 2019. A letter sent to the Department last week from five Congressional committee chairs asked — in my view, rightly — why?

Some will hear this as calling for unchecked executive power. It isn’t. It’s calling for authorities designed for the actual threat we face — with appropriate oversight.

The scale of the challenge is simply too vast to require proving individual malicious intent for every subsidiary of every Chinese military enterprise.

Third, we’re fighting an asymmetric legal war with both hands tied.

I was in Shanghai one month ago today, when China announced a sweeping new licensing regime for rare-earth magnets and their components.

While our system of trade controls is built on auditable blacklists, underpinned by the rule of law, theirs is built on opaque whitelists, with exemptions carved out on the basis of state coercion.

When U.S. companies need rare earths or battery-grade lithium, they must come crawling to MOFCOM for a license. The Chinese government demands they hand over proprietary information: vendor lists, chemical formulas, and full forensics on their supply chains.

It offers no assurance this data won’t reach China’s intelligence services, or their direct competitors. And the U.S. executives I speak with tell me they assume it does.

Meanwhile, we maintain dozens of different restricted-entity lists — each with different statutory authorities, evidentiary standards, and challenge procedures; each restricting access to different resources — federal funding and procurement, operating licenses, and U.S.-origin equipment. A Chinese firm can be on three lists and off four others.

These unintended loopholes in the letter of the law are relics of our national legal debt — one that has grown as a byproduct of the administrative state, and accumulated as we struggled to accept the nature of the competition we are in.

Serious legal reform demands that we consider creating new authorities and institutions fit for purpose. I would suggest three things:

1. Start with expedited designations. If an entity is controlled by the Chinese government or military, designation should take days, not months. I know what you’re thinking — rapid designation sounds like stripping due process.

But I’m not talking about eliminating review. I’m talking about shifting the evidentiary burden: designate fast based on ownership structure, then allow expedited judicial review afterward.

We don’t require proof of individual malfeasance before restricting transactions with Iran’s Revolutionary Guard. Why do we require it for subsidiaries of China’s military contractors?

2. We need list consolidation — one restricted entity database, one standard of review, one adjudication process. Yes, this will require Congress to create unified authority.

Try explaining to your clients why their Chinese counterparty can legally receive U.S. investment despite being on the Entity List, or why a company designated under Section 1260H can still access American capital markets.

The current fragmentation forces law-abiding American companies to navigate a compliance minefield while their Chinese competitors exploit every seam.

3. Finally, implement real reciprocity. When China maintains opaque whitelists for critical minerals, we should match their approach: require Chinese firms to petition for access to our markets.

Look, I understand the discomfort. Many of you have spent careers ensuring the government can’t arbitrarily restrict commercial freedom. That is noble work — it’s part of what makes our system worth defending.

But I’m worried those procedural safeguards — designed to prevent arbitrary government action and uphold the rule of law — are creating arbitrage opportunities for our adversaries to undermine it.

At the end of the day, the question is not whether to abandon due process, but how to adapt it for competition with an adversary that weaponizes our legal principles against us.

The theme of this conference is “New Legal Frontiers,” but the frontier we face is ancient: how a liberal democracy defends itself against authoritarian mercantilism without becoming what it fights.

The question is whether we will adapt our legal architecture to match the competition we’re actually in — or whether we’ll let procedural paralysis make that choice for us.

Thank you.