Trump backs down on tech export restrictions to China
The world's two largest economies are currently working to defuse escalating trade tensions. This week, the US and China launched their third round of negotiations, holding a three-day summit in Stockholm. The talks aim to extend an existing tariff truce and reduce the risk of further economic disruption.
According to current and former officials cited by the FT, the US Commerce Department's Bureau of Industry and Security (BIS) has been instructed to avoid imposing aggressive export restrictions on China. They also noted that Washington faces limits in tightening controls due to concerns that Beijing could retaliate by cutting off supplies of critical raw materials.
China, which dominates the global supply of rare-earth elements, imposed export restrictions on seven strategic minerals earlier this year in response to US trade actions. These materials are essential to key US sectors, including electronics, renewable energy, and defense technologies.
At the center of the latest US reversal is Nvidia's China-specific H20 graphics processing unit, which had been restricted by US regulators in April. At the time, officials warned the chip could be used to advance China's military artificial intelligence capabilities. Nvidia was required to obtain a special license for any exports.
However, the FT reports that the White House later authorized the sale of H20 chips to China without such a license following 'direct lobbying' by Nvidia CEO Jensen Huang. The company confirmed earlier this month it would resume shipments.
Beijing has criticized US export controls as politicizing trade, warning that efforts to suppress China would disrupt global supply chains and harm all sides.
While the decision aligns with US tech industry interests, it has sparked concern among Trump administration officials. Some warned the move could undermine US leadership in strategic technologies, calling the H20 chip a 'potent accelerator' of China's AI capacity, according to the letter seen by FT.
Nvidia, meanwhile, reportedly maintains the chip poses no military threat and fits within its broader export compliance framework.
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