China calls out Trump for 'abuse' of semiconductor export controls

In a pointed response, China has criticized the United States for its 'discriminatory restrictions' regarding semiconductor export controls. This comes in the wake of accusations from the Trump administration that China has breached a preliminary trade agreement. Liu Pengyu, spokesperson for the Chinese embassy in the U.S., expressed concerns over what he termed the U.S.'s misuse of export regulations in the chip industry during an interview with NBC News. This exchange marks a significant escalation in the ongoing trade conflict between the two nations, particularly concerning advancements in artificial intelligence and the essential infrastructure for cutting-edge technologies. President Trump recently claimed via social media that China had violated trade terms, while U.S. Trade Representative Jamieson Greer suggested that China is delaying compliance. In a 90-day tariff suspension agreement reached on May 12, both countries aimed to ease tensions, following discussions in Geneva. Liu urged the U.S. to rectify its actions and halt its discriminatory practices against China, emphasizing the importance of upholding the consensus from high-level talks. Earlier this month, China accused the U.S. of 'abusing' export controls, particularly after restrictions were imposed on American companies regarding Huawei's AI chips. The U.S. has maintained strict limitations on exporting certain chips and technologies to China as part of a national defense strategy initiated during the previous administration. Notably, in 2019, Huawei lost access to U.S. technology, which severely impacted its smartphone operations, forcing the company to develop its own chip technology independently. In 2022, the Biden administration escalated these measures, restricting access to premier AI chips produced by Nvidia and AMD. Recently, chip software companies, including Synopsys and Cadence Design Systems, received directives from the U.S. Commerce Department to cease sales to China. Nvidia, a leader in manufacturing advanced AI semiconductors, has openly criticized these export controls, arguing they would compel China to establish its own chip ecosystem, moving away from reliance on U.S. standards. Earlier this year, Nvidia was informed it could no longer sell its H20 chip to China, a restriction the company claims will result in a significant loss of approximately $8 billion in sales for the current quarter. Although the H20 chip was designed to align with 2022 regulations, the Trump administration required an export license for it. Nvidia's CEO, Jensen Huang, remarked that the U.S. policy assumes China lacks the capability to produce AI chips—an assumption he described as increasingly inaccurate. Meanwhile, the Trump administration revoked a broad chip export control regulation introduced by the Biden administration, known as the 'AI diffusion rule,' which would have imposed export limitations on numerous countries. A streamlined rule is anticipated in the near future.