Trade disagreement between the US and China temporarily ceased, marking an extension of the reprieve in their customs dispute.
In a significant development, the ongoing trade dispute between the United States and China has taken a new turn, with the focus shifting from tariff rates to export restrictions, enforcement of those restrictions, technology transfer controls, and leveraging supply chain policies.
The change in direction began in July 2025 when the U.S. partially reversed an earlier export ban on high-performance AI chips to China, authorising sales of specific advanced chips, such as Nvidia H20 and AMD MI308, to some Chinese customers. This move reflects the delicate balance between economic interests and national security concerns, as these chips have the potential to significantly empower China's military capabilities.
The U.S. government continues to view advanced semiconductors as critical to national security, fearing that China could use these for military and strategic advantage. As a result, export controls remain conditions-based and subject to managed competition, aiming to balance trade and tech dominance.
Enforcement against illicit chip exports to China remains a significant challenge. In 2024, an estimated 140,000 high-performance GPUs, worth billions, were illegally smuggled into China via networks in Southeast Asia. To address this issue, the Chip Security Act proposes technical controls on exported chips, such as location verification to help track chip destinations, aiming to improve "trusted trade" and reduce illegal transshipments to China.
The dispute is now less about tariff rates and more about ensuring U.S. technological superiority in AI and semiconductors while preventing China’s military access to cutting-edge chips. The overall U.S.-China tariff truce caps general tariffs but leaves unsettled underlying tensions regarding technology control, intellectual property rights, and supply chain security related to critical industries like semiconductors and AI chips.
Both sides have shown openness to progress in the trade talks. The U.S. intends to continue talks with China to address trade imbalances, while China continues to advocate for a constructive dialogue. The tensions between the two nations are not limited to tariffs, with Washington accusing China of deliberately withholding certain raw materials, and Peking criticizing U.S. export controls on semiconductors and AI chips for hindering Chinese companies' access to modern technology.
The tariffs in the trade between the U.S. and China have been temporarily suspended until November 10, 00:01 (Washington time). During this period, negotiations are expected to continue, with both sides hoping to find a resolution that benefits both economies without compromising national security interests.
References:
- The New York Times
- The Wall Street Journal
- Bloomberg
- CNN Business
- Reuters
- The shift in the U.S.-China trade dispute towards export restrictions and technology transfer controls has become a hot topic in general-news, finance, business, politics, and industry.
- The enforcement of export restrictions on advanced semiconductors, like Nvidia H20 and AMD MI308, is a significant issue in international business and politics, particularly due to concerns about China's military capabilities.
- The Chip Security Act, aimed at reducing illegal transshipments of high-performance chips to China, is a key point of discussion in the general-news, technology, and trade sectors. The Act proposes technical controls to ensure "trusted trade" while maintaining technological superiority in AI and semiconductors amidst ongoing trade tensions between the U.S. and China.
