{"id":338653,"date":"2025-12-11T08:48:12","date_gmt":"2025-12-11T08:48:12","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/338653\/"},"modified":"2025-12-11T08:48:12","modified_gmt":"2025-12-11T08:48:12","slug":"trump-backs-away-from-the-tech-war-with-china-that-he-started","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/338653\/","title":{"rendered":"Trump backs away from the tech war with China that he started"},"content":{"rendered":"

This week, President Donald Trump announced<\/a> that he would allow US chipmaker Nvidia to sell its advanced H200 chips to China, describing the move as overturning a failed Biden administration policy that he says \u201cslowed innovation and hurt the American worker.\u201d<\/p>\n

He continued, \u201cThat era is over.\u201d<\/p>\n

The first notable thing about the decision is that it\u2019s a clear victory for Nvidia and its allies in the administration over Washington\u2019s China hawks, who have pushed to block China\u2019s access to the chips needed to develop the most advanced AI models. (Nvidia\u2019s even more cutting edge B200 chips are still off the table<\/a>.)<\/p>\n

The second notable thing is that if this is the end of an era, it\u2019s an era that began during Trump\u2019s own first term. \u201cThe original person who pivoted the US away toward a chip control strategy was Trump,\u201d said Steven Feldstein, a senior fellow at the Carnegie Endowment, who studies technology and geopolitics. This era began in earnest with Trump\u2019s bans<\/a> on supplying US-origin components to the Chinese tech giants ZTE and Huawei in 2019, citing those companies\u2019 links to the Chinese government and military.<\/p>\n

Feldstein says it was these moves that first got Chinese leaders thinking seriously about how to escape their vulnerabilities to US-controlled chokepoints in the chip supply chains. (While China has semiconductor manufacturing of its own, the most advanced chips are overwhelmingly designed by US companies \u2014 namely Nvidia \u2014 and produced in Taiwan with equipment made in the Netherlands.)<\/p>\n

This was an area of continuity between the first Trump and Biden administrations. Biden tightened the restrictions on Huawei and also expanded the policy, restricting not only equipment used by Chinese companies to make chips but also exports of the most advanced chips themselves. This happened in the context of Russia\u2019s war in Ukraine, during which Chinese companies have been accused of supplying tech components to Russia, defying US sanctions as well as the AI boom that kicked off in earnest with ChatGPT\u2019s release in 2022.<\/p>\n

In the view of some Biden administration officials<\/a>, the US and China were in a new arms race to develop superintelligent AI, and America\u2019s control of the chip supply chain gave it a head start in that race. This culminated in a wide-ranging rule, dividing the world\u2019s countries into three tiers of access to American chips<\/a>. America\u2019s closest allies could buy the chips, adversaries like China and Russia could not, and most of the world was in the middle, facing heightened scrutiny.<\/p>\n

Since Trump\u2019s return, though, there\u2019s been an active debate over the strategy of restricting chip exports. On one side are China hawks in both parties who largely support these measures; there are proposed bipartisan bills to codify the Biden restrictions into law<\/a>. Their argument is that restricting the most advanced AI chips, like Nvidia\u2019s H200, will preserve the US advantage in the AI race, which is particularly important given China\u2019s efforts to develop AI-related military capabilities<\/a>. AI developers, in particular Anthropic\u2019s Dario Amodei, have also been outspoken in support of the restrictions<\/a>.<\/p>\n

The most influential voice on the other side of the debate has been the world\u2019s most valuable company, Nvidia, whose CEO Jensen Huang argues that the best way for the US to maintain AI supremacy is to keep the rest of the world dependent on American chips<\/a>. (Chinese companies have also been skirting the restrictions by importing black market chips<\/a> or operating out of data centers in third countries<\/a>.)<\/p>\n

The Taiwanese-born Huang had long been scrupulously apolitical, which was easier to pull off in the days when Nvidia was better known for making the graphics cards that made games like Doom and Quake possible. But his company is now deeply tied to the AI boom and all the geopolitical entanglements that come with that, and Huang has lately been an inescapable presence at Trump\u2019s side<\/a>, arguably replacing Elon Musk as the tech CEO closest to the White House. It surely doesn\u2019t hurt his cause that the AI boom is keeping the stock market afloat; Nvidia itself accounts for about 8 percent of the S&P 500<\/a>. The prospect of the US taking a cut of Nvidia\u2019s revenue no doubt sweetened the deal.<\/p>\n

The chipmaker also has allies in the administration, notably the investor, influential podcast host, and White House AI czar David Sacks, who has made the case <\/a>that US interests are better served by loosening restrictions to help US companies maintain their market share. Commerce Secretary Howard Lutnick, too, has argued that the US should try to keep China \u201caddicted\u201d to US chips.<\/a> It\u2019s been a great week for this tech-aligned faction of Trumpworld, between this announcement and Trump\u2019s teasing of an executive order<\/a> blocking state-level AI regulation over the objections of some of his MAGA allies.<\/p>\n

Notably, though Huang and Sacks often frame their arguments in terms of maintaining the US edge over China, it\u2019s not even clear Trump is very interested in that. His statement made clear that \u201cPresident Xi responded very positively!\u201d to the announcement.<\/p>\n

Backing out of \u201cgreat power competition\u201d?<\/p>\n

Back in 2017, the Trump administration proclaimed in its National Security Strategy that <\/a>\u201cgreat power competition\u201d had returned, a framework the Biden administration also enthusiastically embraced. The chip restrictions were part of an overall strategy to maintain a technological and military edge over a great power rival. This Trump administration seems less interested in competing with China than cutting deals with it, a reality underlined by a new 2025 National Security Strategy, released last week<\/a>, which prioritized security concerns in the Western Hemisphere and culture war conflicts with Europe over great power competition.<\/p>\n

Trump\u2019s decision puts Republican China hawks in an awkward spot. \u201cThe CCP [Chinese Communist Party] will use these highly advanced chips to strengthen its military capabilities and totalitarian surveillance,\u201d said Rep. John Moolenaar,<\/a> co-chair of the Select Committee on Competition with China. And it\u2019s another example of the degree to which personal relationships and business interests<\/a> often guide this administration\u2019s foreign policy more than ideology or traditional national security concerns.<\/p>\n

However, it\u2019s also possible that Nvidia may have won over the wrong government. Despite Trump\u2019s announcement<\/a>, China is reportedly planning to limit domestic access to the H200 chips, as part of a strategy to encourage its own companies to make products that compete with the Americans.<\/p>\n

Trump may have declared a truce in the chip war, but nobody told Beijing.<\/p>\n","protected":false},"excerpt":{"rendered":"This week, President Donald Trump announced that he would allow US chipmaker Nvidia to sell its advanced H200…\n","protected":false},"author":2,"featured_media":338654,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[276,45,49,48,95,140,714,27572,61,33222],"class_list":{"0":"post-338653","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-artificial-intelligence","9":"tag-business","10":"tag-ca","11":"tag-canada","12":"tag-china","13":"tag-innovation","14":"tag-politics","15":"tag-tech-policy","16":"tag-technology","17":"tag-world-politics"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/338653","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=338653"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/338653\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/338654"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=338653"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=338653"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=338653"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}