“Commerce Department officials weighed new export limits on critical technology going to China ahead of recent trade talks in London, adding to the Trump administration's arsenal if tensions between Washington and Beijing escalate again.
The Commerce Department unit overseeing export controls has weighed tougher limits on semiconductors, including cutting off sales to China of a wider swath of chip-manufacturing equipment, people familiar with the matter said. Such a move would have covered equipment used to make everyday semiconductors, expanding beyond existing export limits on equipment for producing advanced chips.
The decision could have roiled supply chains for chips needed to make everything from smartphones to cars, while threatening billions of dollars in sales for leading equipment companies such as Applied Materials, Lam Research and KLA.
The restrictions were discussed as an option if trade talks didn't go well and are no longer actively being considered, a White House official said.
In London last week, the U.S. and China agreed to reinstate a recent truce they had reached cutting sky-high tariffs. The detente involves U.S. access to Chinese rare-earth materials and allowing Chinese students to continue studying at U.S. universities.
Even so, tensions continue. China is putting a six-month limit on the sales of rare earths to U.S. carmakers and manufacturers, giving Beijing leverage if the trade conflict flares up again.
Ahead of the London talks, the U.S. hit companies in industries from jet engines to chemicals with export limits.
Restrictions on semiconductors have been a key issue in U.S.-China trade talks. Making chips requires specialized equipment to add thin layers of various materials to silicon wafers. Much of the equipment is made by companies in the U.S., the Netherlands and Japan, giving the West leverage.
"In the economic war with China, this is the most powerful weapon we've got," said Dmitri Alperovitch, co-founder of the Silverado Policy Accelerator think tank. "If you're going to leverage this trump card, now is the time to do it."
The second Trump administration has taken some fresh steps to hobble China's artificial-intelligence industry, following curbs put in place by the Biden administration. In one instance, Commerce's Bureau of Industry and Security is preparing measures to limit the sale of American technology to many subsidiaries and affiliates of Chinese companies subject to a trade blacklist.
Administration officials aren't always of one mind on the issue, with national-security hawks advocating tougher measures while business-minded officials want to do deals and support sales by U.S. companies.
On the issue of semiconductor-making equipment, the Biden administration considered broad restrictions but ultimately decided to focus on advanced chips, people familiar with the discussions said. Equipment companies have argued that tight restrictions without buy-in from other countries would limit the amount they can invest in research and development and benefit foreign competitors.
China accounts for tens of billions of dollars in revenue for Western equipment companies. The country generated roughly 40% of the revenue for Applied Materials, Lam and KLA in their most recent fiscal years.
Since 2022, the U.S. has used its semiconductor industry to hamstring China, an approach that has drawn criticism from industry executives such as Jensen Huang, chief executive of chip designer Nvidia, who argues the controls motivate China to innovate. The Trump administration has said it wants to share technology with allies while beating back China's advances.” [1]
And limited access to those rare earths from China? It almost stopped car industry in the USA. You never know what you can get. You always will get something.
1. U.S. News: Trump Officials Weighed Broader China Tech Curbs. Ramkumar, Amrith; Lin, Liza. Wall Street Journal, Eastern edition; New York, N.Y.. 18 June 2025: A6.
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