From Bloomberg via MSN, July 17:
Only a few years ago, the Biden administration declared export controls a “new strategic asset” to help the US maintain “as large a lead as possible” over China in advanced technology. President Donald Trump is now upending that approach.
In a reversal this week, the White House told chipmaker Nvidia Corp. it could soon resume sales of its less advanced China-focused H20 artificial intelligence accelerator. Advanced Micro Devices Inc. received similar assurances from the US Commerce Department.
Explaining the decision, Commerce Secretary Howard Lutnick said the administration wanted Chinese developers “addicted” to American technology, while insisting the US wouldn’t sell China “our best stuff.” That, he said, required a more balanced policy that would keep the US “one step ahead of what they can build so they keep buying our chips.”
The shift in strategy, which angered China hawks in Washington, raises a key question as Trump sets the stage for a meeting with Chinese President Xi Jinping later this year: How far will the US go in rolling back a range of measures restricting business between the world’s biggest economies imposed in the name of national security?
“The apparent loosening of export control on the H20 chips could be a sign of things to come,” Kevin Xu, a tech investor and founder of US-based Interconnected Capital who formerly worked in the Obama administration. “A wide range of bargaining chips are on the table now for a potential US-China tech grand bargain: Semiconductor manufacturing equipment, rare earths, battery technology, AI chips, even mutual market access.”
While the US is a long way off from dismantling the bulk of restrictions on China, spanning everything from export controls to investment curbs to sanctions, Trump’s recent actions open the door to redefining the economic relationship between the nations mere months after his imposition of 145% tariffs took them to the brink of decoupling. Talks in Geneva and London then led to a truce in which the US agreed to lower tariffs and ease export controls in return for rare-earth magnets used to make goods like smartphones, electric vehicles and high-tech weapons....
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