Challenges in U.S. AI Export Policy Persist After Trump Rescinds Biden-Era Rule

By Staff Reporter

*Published: 2026-05-01*

The Trump administration has encountered ongoing difficulties in revising artificial intelligence (AI) export policies originally established under President Biden, according to a column published by Townhall. These challenges include delays in issuing new regulations and backlogs in export license processing at the Bureau of Industry and Security (BIS), a 500-person agency within the U.S. Department of Commerce.

In the final week of President Biden's term, BIS finalized the "AI Diffusion Rule," which took effect one week before President Trump's inauguration in January 2025. According to the rule's preamble in the Federal Register, it established a tiered global framework intended to promote AI technology diffusion among trusted allies—designated as "Tier 1" partners—while restricting access for adversaries such as China. The rule imposed limitations on exports of AI chips, semiconductors, and related biotechnology to non-Tier 1 countries, aiming to balance national security concerns with support for U.S. companies and allies.

One of President Trump's initial actions was to rescind the AI Diffusion Rule, describing it as "ill-conceived." Commerce Secretary Howard Lutnick later oversaw the formal rescission in May 2025. However, as of May 2026—a year later—no comprehensive replacement rule has been published. BIS has issued interim enforcement guidances following the rescission and formalized a new flexible license review policy in January 2026, according to agency statements.

The absence of a permanent replacement has led to what some describe as a regulatory vacuum, affecting American companies' ability to export AI-related products valued in billions of dollars. A Townhall column by former Republican Congressman Michael Flanagan claimed this vacuum resulted in the "worst licensing backlog at BIS in over 30 years," with thousands of applications stalled and U.S. technology shipments delayed. BIS licensing backlogs have been attributed in part to staffing shortages and employee departures during the early months of the Trump administration, which reduced the agency's processing capacity.

Additionally, export restrictions on advanced chips implemented in 2022 and 2023 during the Biden administration remain in place. These require U.S. companies to navigate a complex licensing process for sales to certain international markets.

Flanagan argued that the AI Diffusion Rule was ineffective, noting that it did not prevent Tier 1 allies, such as Japan, from purchasing U.S. AI chips and reselling them to China. Biden administration officials and career civil servants described the rule's timing as an effort to "wrap up loose ends" from ongoing policy work, though critics have characterized it as a last-minute measure conflicting with the incoming administration's priorities.

Senior career officials at BIS, who developed policies during the Biden years, have continued to influence export controls, according to Flanagan. Secretary Lutnick has removed some career bureaucrats, but the column alleged that Lutnick himself echoed Biden-era arguments during a recent congressional hearing. Specific details of that hearing were not independently verified in available records.

The issues extend beyond the Commerce Department. Flanagan claimed that State Department officials advocated for additional restrictions on advanced chip exports, including mandatory third-party testing of domestically produced chips, detailed end-use reporting requirements, and a condition that at least half of H200 chip shipments prioritize U.S. customers. These claims were not corroborated in public State Department announcements or BIS guidance documents.

Separate developments involve personnel movements in the tech sector. Anthropic PBC, a San Francisco-based AI company led by CEO Dario Amodei, has hired several former Biden administration officials from roles in the White House, National Security Council, and AI Safety Institute. Axios reported that Anthropic's lobbying expenditures increased by 344%, rising from the first quarter of 2025 to $1.6 million in the first quarter of 2026.

A former Trump administration official, speaking anonymously to outlets including the Denver Gazette and Success Quarterly, described Anthropic as a destination for individuals opposed to the Trump administration's AI policies. The official stated: “Anthropic is a safe haven for Biden officials who are diametrically opposed to President Trump’s America First AI policy and are trying to weasel their way into the national security space.”

These dynamics occur amid broader efforts by the Trump administration to prioritize U.S. competitiveness in AI. President Trump has emphasized an "America First" approach, aiming to boost domestic companies and allied partnerships while addressing national security risks from global AI proliferation. The Biden-era rules were explicitly designed to curb China's AI advancements by limiting access to U.S. technology, a goal that aligns with bipartisan concerns but differs in implementation details.

The regulatory delays have drawn criticism from industry groups, who report lost sales opportunities as competitors, including Chinese firms like Huawei, gain market share. Commerce Department officials have acknowledged the backlog issues and stated that staffing adjustments and new procedures are underway to expedite processing.

Policymakers on both sides have highlighted the tension between export controls and economic growth. Proponents of stricter rules cite intelligence assessments warning of AI's military applications, while businesses advocate for streamlined licensing to maintain U.S. leadership. As of May 2026, BIS continues to process applications under existing frameworks, with the new license review policy aiming to provide greater flexibility for exports to trusted partners.

The situation underscores ongoing debates over how to regulate emerging technologies. The Trump administration's staffing changes at agencies like BIS have impacted operations, contributing to delays alongside inherited policies. Further updates to AI export rules are anticipated, potentially resolving the current uncertainties for U.S. firms.

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