Tax code weaponized to punish foreign tech use—but rules still unwritten
H.R. 7509 — Deterring Adversarial Access to Americans’ Data Act · Filed by Nathaniel Moran (R-TX) · Introduced Feb 11, 2026 · Referred to committee
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What it does
This bill amends the tax code to penalize U.S. companies that use technology controlled by foreign adversaries (like China or Russia). It denies them tax breaks for depreciation, research expenses, and R&D credits, and limits their ability to deduct business interest. The goal is to discourage reliance on adversary-controlled tech by making it more expensive to own and operate.
Why we flagged it
The bill's core mechanism is a targeted tax code amendment that imposes financial penalties on entities using foreign adversary-controlled technology. It is functionally a supply-chain security measure disguised as tax policy, using the tax code as the enforcement lever.
What the text implies
- The definition of 'foreign adversary-controlled technology' is circular and delegated to Treasury regulation, creating regulatory uncertainty and potential for expansive interpretation that could capture more companies than intended.
- Companies may face retroactive tax liability if Treasury later redefines what counts as 'adversary-controlled,' since the effective date is one year after enactment but the definition is left to future rulemaking.
The full analysis lists 5 implications of this text.
Who stands to gain
domestic technology manufacturers; semiconductor companies with U.S. supply chains; defense contractors