The already fragile trade truce between the United States and China has been further strained by a series of actions from the Trump administration on Wednesday night, targeting both Chinese technology companies and students.
These moves have been interpreted within China as a setback following a period of optimism sparked by an agreement between the world’s two largest economies to significantly reduce steep tariffs. This earlier conciliatory step had been seen as a positive development in a trade war that posed a threat to the global trading system.
However, the latest actions from Washington are expected to have widespread repercussions across China, likely provoking anger from both families and authorities. These measures also cast doubt on the future of US-China trade negotiations, particularly as the temporary 90-day truce has a limited duration, and a longer-term agreement remains elusive.
The first measure involves restrictions on the sale of US software used in the design of semiconductors to certain Chinese companies. Reports indicate that the US government informed the industry of new export controls on this critical technology, extending globally to Chinese military end-users. Semiconductors, essential components in various technologies from smartphones to automobiles, have been a focal point of the US-China tech rivalry. The Biden administration had previously restricted China’s access to US-made semiconductors, and earlier this month, warnings were issued against using AI chips produced by the Chinese tech giant Huawei. These obstacles have been a source of frustration for Beijing, which has invested heavily in its domestic semiconductor industry to reduce reliance on the US and other nations.
A spokesperson for the Chinese Embassy in the US expressed strong opposition to these actions, accusing the US of “overstretching the concept of national security, abusing export controls, and maliciously blocking and suppressing China.”
The second significant action from the White House involves the announcement by US Secretary of State Marco Rubio that the US will “aggressively revoke visas for Chinese students,” particularly those studying in critical fields or with alleged connections to the Chinese Communist Party. This move could have a substantial impact, as there were over 270,000 Chinese students in the US in 2024, with even higher numbers before the pandemic. While some students come from elite backgrounds, many others are from middle-class families who have made considerable financial sacrifices to fund their education abroad. Senator Rubio’s announcement puts these students at risk of potential deportation and jeopardizes their academic progress. Given China’s one-party system and its pervasive reach into society, many students may find it challenging to disprove alleged connections to the Communist Party, especially if the State Department adopts a broad definition of such ties.
China’s foreign ministry has strongly condemned the visa policy, accusing the US of “unjustly” revoking visas “under the pretext of ideology and national security.”
While the visa restrictions have come as a shock, some analysts suggest that the targeting of Chinese students could ultimately benefit China. The number of Chinese students in the US had already been declining due to shifts in policy and public perception. Concerns about safety, racism, discrimination, and immigration difficulties in the US, coupled with the rise of competitive higher education options in other countries, including China itself, have contributed to this trend. The US crackdown could accelerate the return of Chinese scholars, potentially including top talent in key technological fields, or encourage them to pursue degrees in China rather than the US. These researchers could play a vital role in China’s efforts to catch up with or surpass the US in technological advancements, a goal that many US officials are actively trying to prevent.
In a separate development on Wednesday, a federal court blocked President Trump from imposing most of his global tariffs, including the current 30% tariffs on China. However, the administration has already appealed this decision, leaving the future of these tariffs and the broader trade war uncertain.
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