Key Points
- The Trump administration is contemplating extensive export restrictions on products utilizing U.S. software to restrict China’s access to semiconductor and AI technologies.
- U.S. Treasury Secretary Scott Bessent noted that any new export controls would be synchronized with G7 allies to preserve technological dominance over China.
- President Trump declared a 100% tariff on all imports from China, set to commence on November 1, 2025, along with plans for export controls on American-created software.
In a significant escalation of the protracted U.S.-China technological and trade confrontation, the Trump administration is evaluating sweeping export limitations aimed specifically at products crafted with U.S. software, particularly those intended for the Chinese market.
This potential initiative, highlighted by various media outlets including Reuters and Eurasia Business News on October 22, 2025, would represent a substantial extension of the foreign direct product rule (FDPR). This rule currently empowers the United States to regulate foreign-manufactured goods that incorporate American technology, regardless of their origin.
The central objective of this new proposal is unequivocal: to impede China’s rapid progress in the semiconductor and artificial intelligence realms by cutting off access not only to American hardware but also to the essential software that facilitates chip design and production globally.
As reported by Eurasia Business News, this initiative is part of a more comprehensive U.S. strategy intent on sustaining technological preeminence while stifling China’s advancements in these crucial sectors. An expansion of the FDPR would suggest that any product containing U.S. software—from personal computers to aerospace components—might be subjected to these new limitations.
U.S. Treasury Secretary Scott Bessent, speaking just days prior to an anticipated meeting with Chinese Vice Premier He Lifeng, articulated the administration’s position in clear terms: “Everything is on the table,” Bessent declared to reporters at the White House on October 22, when quizzed about potential software export constraints.
He indicated that, should the U.S. proceed, it would closely collaborate with its G7 partners to ensure a cohesive strategy. “If these export controls—be they software, engines, or others—are enacted, coordination with our G7 allies will likely be essential,” Bessent explained, according to Reuters.
The timing of these considerations is not incidental. This latest series of U.S. maneuvers coincides with China’s implementation of its own export restrictions on rare earth elements and related technologies, which are vital for global electronics, defense systems, and electric vehicle manufacturing.
Such reciprocity in trade measures has set the stage for what numerous analysts are interpreting as a new chapter in the U.S.-China “trade war,” pivoting not solely on tariffs but on the very foundational elements of modern technology.
The ramifications of such actions are staggering. “Everything imaginable is made with U.S. software,” a source disclosed to Reuters, underscoring the extensive scope of the proposed limitations. Should this proposal be fully enacted, it could dramatically disrupt global technology trade and reverberate throughout multinational supply chains.
Emily Kilcrease, a former U.S. trade official currently with the Center for a New American Security, remarked, “Software represents a natural leverage point for the U.S. However, the implementation of such controls would be profoundly challenging and could result in backlash against U.S. industries.”
Although some voices within the administration advocate for a more tempered approach, the White House has not shied away from assertive declarations.
President Trump, in reaction to China’s rare earth restrictions announced on October 11, stated that the U.S. would impose a 100% tariff on all imports from China, “in addition to any tariffs currently enforced,” effective November 1 or potentially sooner.
Trump asserted, “Beginning November 1, 2025 (or sooner, contingent on any further actions taken by China), the United States of America will implement a Tariff of 100% on China, exceeding any existing Tariff they are presently subject to,” as he posted on social media.
He further proclaimed that the U.S. would institute export controls on “any and all critical software” produced by American entities.
In response, China has exhibited a blend of defiance and caution. A spokesperson for the Chinese embassy, as quoted by Reuters, stated that China “opposes unilateral long-arm jurisdiction measures imposed by the U.S.” and promised to “undertake resolute actions to safeguard its legitimate rights and interests” if the U.S. proceeds accordingly.
Moreover, the Chinese government has expanded its own export restrictions concerning rare earths and associated technologies, indicating its readiness to reciprocate U.S. actions decisively.
President Trump has not held back in describing China’s export limitations, deeming such maneuvers as “extraordinarily aggressive” and “a moral disgrace in international relations.” He further proclaimed, “It is absolutely unprecedented in global trade…
It is hard to fathom that China would undertake such actions, yet they have done so, and history will reflect this.” Furthermore, he emphasized America’s own strategic standings in rare earths, stating,
“There is no way China should be permitted to hold the world ‘captive’; it appears to have been their strategy for quite some time… But the U.S. also possesses monopoly positions… UNTIL NOW!”
The suggested software-related export controls would mirror those imposed by the Biden administration against Russia following its 2022 incursion into Ukraine. Such regulations curtailed exports to Russia of items produced globally utilizing U.S. technology or software.
Currently, U.S. tariffs on Chinese goods range between approximately 30-40%, with steel subjected to a 50% tariff and consumer products around 7.5%. The impending 100% tariff, if approved, could escalate some tariffs to as high as 130-145%, as noted by Eurasia Business News.
Presently, Chinese imports face U.S. tariffs of around 55%, which could potentially rise to 155% should the administration follow through on its threatened escalation.
As these significant maneuvers are deliberated, there is a palpable recognition of the inherent risks. The possibility of backlash against U.S. industry is plausible, especially given the deep entanglement of American companies within global supply chains.
Thus far, the White House and Commerce Department have refrained from commenting publicly on the specifics of the proposed restrictions, possibly indicative of an ongoing internal discourse regarding the level of confrontation to pursue.
The financial markets have not remained untouched by the prevailing uncertainty. Following the report from Reuters on October 22, U.S. stock indexes experienced a downturn, with the S&P 500 closing down by 0.5% and the Nasdaq falling approximately 1%.
The economic repercussions of a comprehensive technological separation between the two largest global economies could be extensive, influencing a spectrum of industries from consumer electronics to automotive and defense.
Simultaneously, diplomatic efforts persist amid the economic strife. U.S. Treasury Secretary Bessent is scheduled to engage with Chinese Vice Premier He Lifeng in Malaysia this week, in advance of a prospective summit between President Trump and Chinese President Xi Jinping later in October in South Korea.
Both parties have expressed a desire to temper tensions; nevertheless, neither appears willing to relent on fundamental technology and trade matters.
As global attention pivots to these discussions, the outcomes—and the prospective export controls—could redefine the technological landscape for the foreseeable future. With both sides entrenched, the specter of a technological Cold War seems increasingly tangible, inching closer with each passing day.
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