China has criticized U.S. export controls on semiconductors in response to Trump's accusations that the world's second-largest economy has violated a preliminary trade agreement between the two countries, CNBC reports.
“Recently, China has repeatedly raised concerns with the United States about its abuse of export controls in the semiconductor sector and other related practices,” Chinese Embassy spokesman Liu Pengyu told NBC News.
The statement did not specify what action the United States took. Earlier this month, China said the United States was “abusing” export controls after the U.S. banned American companies from importing or even using Huawei’s AI chips.
It is the latest escalation in the ongoing trade war between the U.S. and China, particularly when it comes to artificial intelligence and the infrastructure needed to develop the most advanced technologies.
China’s response came after President Donald Trump said on social media Friday morning that China had violated the trade deal. U.S. Trade Representative Jamieson Greer told CNBC that “the Chinese are slow to implement their rules.”
On May 12, the U.S. and China agreed to a 90-day suspension of most tariffs imposed by each side. The agreement followed an economic and trade meeting between the two countries in Geneva, Switzerland.
The United States has restricted exports of certain integrated circuits and integrated circuit technology to China as part of a national defense strategy dating back to the first Trump administration.
In 2019, President Trump cut off Huawei’s access to American technology, forcing it out of the smartphone industry for several years before it could develop its own chips without using American intellectual property or infrastructure. In 2022, the Biden administration took action for the first time to cut off China’s access to the fastest AI chips made by Nvidia.
Restrictions have become more stringent recently, and earlier this week chip software makers including Synopsys and Cadence said they had received letters from the U.S. Commerce Department ordering them to stop selling to China.
Nvidia, which makes the most advanced semiconductors for artificial intelligence applications, has openly opposed U.S. export controls, saying they will only force China to develop its own chip ecosystem rather than adapt to U.S. standards.
Nvidia learned earlier this year that it could no longer sell its H20 chip to China, causing it to lose about $8 billion in sales in the current quarter.
The H20 chip was specifically designed by Nvidia to meet 2022 restrictions, but the Trump administration said in April that the company needed an export license.
Nvidia estimates it had $4.5 billion left in inventory that it could not reuse.
“The U.S. based its policy on the assumption that China could not produce AI chips. That assumption was always questionable, and now it is demonstrably wrong,” Nvidia CEO Jensen Huang told investors on a conference call about the company’s financial results.
The Trump administration has repealed a sweeping chip export control rule implemented by the Biden administration, known as the “AI diffusion rule,” that would have imposed export limits on most countries. A new, simpler rule is expected to be introduced in the coming months. (PAP Biznes)
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