Trump Administration Plans Stricter Chip Restrictions on China
The Trump administration plans stricter chip export limits to curb China’s tech growth, impacting AI, semiconductors, and global trade. Changes may hit major firms.
The Trump administration is planning tougher restrictions on semiconductor exports to China, building on policies started under Joe Biden. The goal is to prevent China from advancing its technology, especially in artificial intelligence and military applications.
To achieve this, U.S. officials have been meeting with Japan and the Netherlands, urging them to tighten their own rules. Specifically, they want companies like Tokyo Electron Ltd. and ASML Holding NV to stop servicing chip-making equipment in China. The U.S. already has similar restrictions in place for its own firms, including Lam Research, KLA Corp., and Applied Materials.
Another key focus is limiting the types of advanced chips that can be sent to China. The administration is considering further restrictions on Nvidia Corp. products and reviewing how many AI chips can be exported without a license. Investors have reacted to these potential changes, with shares in Japanese chip firms falling after reports of these discussions.
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Even with current restrictions, Chinese companies have found ways to acquire advanced chips. A recent investigation suggests that China’s AI startup DeepSeek may have obtained Nvidia chips through third parties in Singapore, bypassing U.S. export rules.
New regulations could take months to finalize as Trump’s team continues to make key staffing decisions. It’s also unclear whether allies like the Netherlands and Japan will fully cooperate. In a previous agreement with the U.S., the Netherlands had initially agreed to limit maintenance on chip-making machines in China but later hesitated to enforce the rule.
Other unresolved policies from the Biden era are also under review. One proposal is to block Chinese memory chipmaker ChangXin Memory Technologies Inc. from accessing American technology. Biden officials considered this but did not proceed due to resistance from Japan.
The administration is also reviewing restrictions on Semiconductor Manufacturing International Corp. (SMIC), China’s top chipmaker and a key supplier for Huawei. While Biden placed limits on some SMIC facilities, he allowed case-by-case approvals for others. Trump’s team may impose stricter rules to prevent SMIC from acquiring critical equipment. News of these possible changes has already impacted SMIC’s stock, which fell in Hong Kong trading.
A separate policy under review is the AI diffusion rule, which was introduced at the end of Biden’s term. This rule divides countries into three tiers and sets limits on AI computing power exports. Trump officials are now considering tightening these restrictions further. One idea is to lower the number of high-performance chips that companies can export without government approval. Currently, chipmakers must notify the government before sending the equivalent of 1,700 GPUs to most countries, but officials are discussing reducing this limit.
The tech industry is watching closely to see how these policies will develop. Companies like Nvidia, whose CEO previously hoped for fewer restrictions under Trump, may soon face tighter controls. As competition between the U.S. and China intensifies, it’s clear that Trump is not only continuing Biden’s semiconductor policies but may go even further to limit China’s access to advanced chip technology.
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