Sign in Subscribe
National security

Trump Administration Agrees to Roll Back US Technology Controls in Bid to Stabilize US-China Relations

Strategic Insights

— 2 min read

President Trump's meeting with Chinese President Xi Jinping in South Korea on Wednesday appeared to have largely rolled back the clock, with the US agreeing to reverse some of its tariffs and pause new fees on Chinese ships. However, the most notable concession was the US decision to pause for one year a rule that expanded the number of Chinese companies restricted from access to advanced technology, effectively rolling back US technology controls. This move has been seen as a major victory for China, which has long pushed to negotiate with the US over these types of measures, known as export controls.

Key Takeaways:

  • The US agreed to pause a new rule that expanded the number of Chinese companies restricted from access to advanced technology for one year, effectively rolling back US technology controls.
  • The US also agreed to reverse some of its tariffs and pause new fees on Chinese ships, as well as to allow the free flow of rare earths.
  • The move is seen as a major victory for China, which has long pushed to negotiate with the US over export controls.
  • The agreement was made in exchange for China's decision to pause its rare earth restrictions, which had been imposed in October.
  • The US has agreed not to discuss export controls in trade negotiations, but has now made concessions on these measures, which have become a tradable item in the relationship.
  • The US administration has pushed back on the idea that the agreement is out of step with negotiations under prior administrations, but analysts say that the move is a significant shift in US policy.
  • China has consistently pushed for export control measures to be rolled back in talks with many presidential administrations, and this move is seen as a key concession.
  • The US decision to pause the expansion of the entity list to cover majority-owned subsidiaries for one year is seen as a significant concession.
  • Some tech executives and lobbyists had criticized the previous 50 percent rule, saying it was onerous or impossible.

Statistics:

  • The entity list has grown from roughly 1,300 China-related parties to more than 20,000 due to the 50 percent rule.
  • The 50 percent rule was issued just four weeks ago and has had significant impact on trade.
  • China dominates the mining and processing of rare earth minerals, with magnets made from them common in batteries and motors.
  • The US has agreed to allow the free flow of rare earths in exchange for China's pause in its rare earth restrictions.
  • The White House spokesman confirmed that the US has agreed to pause the expansion of the entity list to cover majority-owned subsidiaries for one year.

Sources:

  • "U.S. and China Reach Deal on Technology and Tariffs, but at What Cost?" by The New York Times
  • "China's Rare Earth Export Curbs Threaten Global Supply Chains" by The New York Times
  • "U.S. Commerce Department Issues New Guidance on Huawei A.I. Chips" by CNBC
  • "China's National Security Law Imposes Stricter Export Controls" by The Wall Street Journal
  • "U.S.-China Trade Deal Fails to Address Key Issues" by Bloomberg

Read more