What can the US administration do about it?
What they always do. Send in armed men with guns? Export Controls. Import Controls. National Security Laws.
Level 1: Anyone using unauthorized model weights in their business is prohibited from doing business with the government...
Level 2: ... or with anyone who does.
Level 3: Anyone caught with unauthorized model weights is subject to the same prosecution they could expect if they had been caught with CSAM.
Send you to jail.