Focus Back On China

A US government statement this month showed how the Trump administration is seeking to change the ways the US limits China’s access to state-of-the-art semiconductors needed to develop AI.

The US Commerce Department said on May 12 that it would rescind the “AI Diffusion Rule”, which was issued by Trump’s predecessor, Joe Biden, to shield American chips from Beijing.

The rule, set to take effect on May 15, would have imposed three tiers of curbs: allowing trusted nations to freely import AI chips but controlling or banning their export to lower-tier countries like China.

The Commerce Department said it “would have stifled American innovation” while harming US diplomatic ties with “dozens of countries.”

The same statement reminded companies that using Huawei Ascend — the Chinese tech giant’s most advanced chip — “violates US export controls”.

It warned of “potential consequences” if US-built AI chips were used to train Chinese AI models.

The announcement aimed to “refocus the firepower” of AI curbs squarely on Beijing, said Lizzi Lee, a fellow on the Chinese economy at the Asia Society Policy Institute.

Manoj Harjani, a research fellow at Singapore’s S. Rajaratnam School of International Studies, agreed, saying the policy turn meant “the spotlight (would be) clearly on China and Huawei”.

Different From Biden

Analysts told AFP that Trump’s approach to chip controls marks a distinct shift from Biden.

Marina Zhang, an associate professor at the University of Technology Sydney’s Australia-China Relations Institute, said the latter relied on multilateral coordination with allies to keep Beijing out of the loop.

Zhang told AFP that Trump’s recent measures “adopt a more selective and bilateral approach.”

“(The policies are) flexible enough to accommodate allies’ demands and protect US firms’ global market positions, yet continue to aggressively target specific Chinese companies like Huawei through unilateral measures,” she said.

Harjani noted that Trump was often viewed as a leader who “does not care much for allies and partners”.

Harjani said his chip policy “runs counter to this assumption” as it includes efforts to create new AI-focused partnerships with allies.

Beijing Backlash

Beijing has accused Washington of “bullying” and abusing export controls to “suppress and contain” China.

The fighting talk shows that Beijing “will not yield easily”, Zhang said.

However, she said the restrictions would significantly hamper Huawei’s access to “crucial” US chipmaking technology.

“The AI competition has entered an accelerated and potentially dangerous phase, complicating future negotiations” on global AI governance, Zhang added.

China has already made impressive strides in AI development, with homegrown startup DeepSeek shaking up the technology sector this year with a chatbot that seemingly matches the performance of US competitors at much lower cost.

Chinese firms like Alibaba and Xiaomi have announced huge investments in AI, which experts say feeds into a national goal to reduce reliance on foreign suppliers.

“It’s part of a broader mobilisation happening domestically,” Lee said.

“The strategy is not to beat the US — it’s to be good enough in the short term, while buying time to build domestic capacity and catch up to the cutting edge.”

Tech Rivalry

The AI rivalry is playing into broader trade tensions between Beijing and Washington.

The two sides traded tit-for-tat tariff hikes after Trump took power, but this month dramatically slashed levies on each other’s goods for 90 days, signalling a detente for now.

Lee, from the Asia Society, said the trade truce was “never going to hold tech policy at bay”, noting the US backlash against Huawei just days after crunch bilateral trade talks in Geneva, Switzerland.

“Tariffs can be dialled up or down. Tech competition, by contrast, is hardening into the architecture of national security policy for both sides,” she said.

“If the US doubles down on blacklisting key Chinese AI players, it’s hard to imagine Beijing making big concessions elsewhere.”

The Truth-

The sincere truth is America can't stop China's development because China invested heavily on "Research & Development" which gives them 100% competition edge on all fields.