Lawmakers crack down on CCP influence in US government tech, warn of potentially ‘devastating’ cyber attack

FIRST ON FOX: There is a new bipartisan effort in Congress to take on the growing threat of cyberattacks by China and other U.S. adversaries.

A bill led by Rep. Pat Fallon, R-Texas, would impose new guardrails on the technology the U.S. government is able to purchase by forcing a federal agency or office to only purchase it from “original equipment manufacturers” or “authorized resellers,” according to the bill text obtained by Fox News Digital.

Fallon explained this would ensure U.S. technology is bought from “trusted sources” rather than a third party that could potentially be sourcing that equipment from nations like China, Russia or Iran.

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China’s technology “gray market” is a growing issue there and abroad. (Photo Illustration by Budrul Chukrut/SOPA Images/LightRocket via Getty Images)

“[O]ur adversaries have been targeting our hardware and software systems through selling the U.S. government counterfeit products through what are known as ‘gray market’ sellers,” Fallon explained. “These products, although marketed as genuine hardware, allow our enemies to gain access to U.S. government systems, making it far easier to conduct subsequent cyberattacks.”

The Texas Republican warned the U.S. was being hit with “millions of attacks daily,” and that the growing sophistication of artificial intelligence (AI) technology was making cyberattacks easier to pull off.

The House bill, the Securing America’s Federal Equipment (SAFE) Supply Chains Act, is backed by a bipartisan companion bill in the Senate.

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Rep. Pat Fallon, R-Texas, is moving to shield the U.S. from the effects of foreign tech gray markets. (AP Photo/Rod Lamkey, Jr.)

That push is being led by Sen. John Cornyn, R-Texas, and Senate Homeland Security Committee Chair Gary Peters, D-Mich.

A “gray market” refers to an alternative channel for purchasing and selling genuine goods without the authorization of the manufacturer.

It has been a particularly prevalent issue in the high-tech sphere, and though the lack of transparency makes its full scope hard to quantify, the technology gray market is believed to have cost manufacturers billions of dollars in losses, according to AGMA Global.

China’s technology gray market is prevalent. A report from the Hong Kong-based Asia Times earlier this year said Chinese firms were getting around U.S. export controls to acquire high-end American AI chips for their own military and research uses.

Additionally, while the U.S. government does have existing bans on certain Beijing-backed companies, the new bill would prevent China from using middle men to obscure those and other illicit sources and flooding the U.S. market.

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Fallon said the legislation would “prevent the federal government from even being at risk of being duped into procuring these harmful products.”

“The world is at peak instability and danger. Simply put, we are at an inflection point, which means we must do everything in our power to protect our vulnerable systems from cyber-attacks and intrusion from our enemies,” he said.