Trump's AI Chip Policy Shift: Impact on China Trade

Analysts suggest that the US is not reducing restrictions on China's technological advancement despite the recent revocation of Biden-era regulations regarding artificial-intelligence chips. Instead, the action is viewed as a more targeted strategy in the competition for technological dominance.

According to analysts, these increased technology tensions may introduce more uncertainty into ongoing trade negotiations between the world's two largest economies, who previously agreed to a 90-day rollback of large-scale tariffs earlier this month.

Joanne Lin, a senior fellow at ISEAS – Yusof Ishak Institute in Singapore, stated that Trump's strategy involves employing trade tools and targeted controls, rather than broad restrictions. She added that Beijing may perceive such limitations as a fundamental threat to its long-term development objectives.

The US Bureau of Industry and Security (BIS) announced the rescinding of the AI Diffusion Rule established by the Biden administration. Washington is now focusing its efforts specifically on China by issuing advisories that the utilization of Chinese chips violates US export-control regulations. They are also restricting the use of US chips for training AI models in China, which has led to protests and warnings from China.