US weighs sweeping export curbs on China-made goods using American software
WASHINGTON: The United States is considering a sweeping plan to curb exports to China made with or containing US software, in what would mark a major escalation in the trade war between the world’s two largest economies, sources familiar with the matter said on Wednesday (Oct 22).
The proposed measure would target a wide range of products including laptops and jet engines. This move comes in retaliation for Beijing’s decision earlier this month to expand its export curbs on rare earth minerals, key to global technology manufacturing.
While still under review, the plan would deliver on President Donald Trump’s threat to bar “critical software” exports to China and impose 100 per cent tariffs on Chinese shipments by Nov 1.
US stock indexes briefly extended losses on the news, with the S&P 500 down 0.8 per cent and the Nasdaq 1.3 per cent lower before paring their declines.
PLAN SEEN AS POSSIBLE TRADE WAR ESCALATION
If implemented, the measure could disrupt global supply chains and international trade, as most manufactured goods rely on US software. “Everything imaginable is made with US software,” one source told Reuters.
A White House official declined to comment, and the Commerce Department did not respond to requests for clarification.
A spokesperson for China’s embassy in Washington said Beijing opposed US “long-arm jurisdiction” and vowed to “take resolute measures” to protect its interests if Washington proceeds “down a wrong path.”
Officials may announce the plan as a signal of intent without fully implementing it, sources said, noting that others within the administration are advocating for a narrower version.
MEASURE MIRRORS SANCTIONS ON RUSSIA
The potential controls would echo restrictions placed on Moscow after its 2022 invasion of Ukraine, when Washington barred global exports to Russia of items made using American software or technology.
Trump’s latest push comes just weeks before his planned meeting with Chinese President Xi Jinping at the APEC summit in South Korea. It would be their first since Trump’s return to the White House.
Beijing’s recent curbs on rare earth exports, which take effect Nov 1, were described by Trump as “a moral disgrace,” prompting him to promise retaliation.
TENSIONS MOUNT AHEAD OF XI SUMMIT
Since returning to office, Trump has imposed steep tariffs on Chinese imports while wavering on export bans. His administration has both tightened and later eased restrictions on shipments of Nvidia’s AI chips and chip design software to China.
China last month criticised a new US rule restricting shipments of goods and technology to firms that are at least 50 per cent owned by sanctioned Chinese companies.
Chinese imports currently face US tariffs of about 55 per cent, which could rise to 155 per cent if Trump follows through on his threats.
However, Trump appeared to temper his rhetoric after his earlier warnings, posting on Oct 12 that “The USA wants to help China, not hurt it!!!”
US Treasury Secretary Scott Bessent said he expected to meet Chinese Vice Premier He Lifeng in Malaysia this week ahead of the Trump–Xi meeting in South Korea later this month.
