The Trump administration is weighing a plan to restrict a wide range of exports to China that are made with US software, from laptops to jet engines, in retaliation for Beijing's latest rare earth export restrictions, according to a US official and three people briefed by US authorities.
The proposed measure would enforce Donald Trump's earlier threat to bar 'critical software' exports to China by limiting global shipments of items containing or produced with US software. While not finalised, the plan signals a potential escalation in the US-China trade conflict, even as some within the administration favour a more cautious approach.
If implemented, the controls could disrupt global technology trade and impact the US economy. The move would echo restrictions imposed on Russia after its 2022 invasion of Ukraine, targeting goods made globally using US technology or software. Trump's threat came after China expanded its rare earth export controls, which he called 'a moral disgrace'.
US stock indexes briefly fell on the news, with the S&P 500 down 0.8% and the Nasdaq 1.3% lower before recovering. The White House declined to comment, and the Commerce Department did not respond to requests for comment. A Chinese embassy spokesperson opposed US 'long-arm jurisdiction' and vowed to protect China's interests.
Administration officials may announce the measure to pressure China without fully implementing it, one source said. Narrower policy options are also under discussion. Trump has wavered on export restrictions before, imposing and then removing curbs on Nvidia's AI chips and chip design software to China.
