The Trump administration is considering a sweeping plan to restrict US software exports to China, potentially covering a wide range of products from laptops to jet engines, reported Reuters citing sources familiar with the matter.
The measure is viewed as a response to Beijing’s recent expansion of rare earth export restrictions, and would fulfill President Donald Trump’s earlier pledge to limit “critical software” shipments to China.
While officials are still evaluating multiple options, the plan could include restrictions on global shipments of items containing US software or produced using US software.
President Trump, in a social media post on October 10, also threatened to impose additional tariffs of 100% on US-bound shipments from China, along with unspecified export controls effective November 1.
It remains unclear whether the proposed measures will ultimately be implemented.
Market reaction and international implications
The potential escalation in trade tensions briefly weighed on US markets.
The S&P 500 fell 0.8% and the Nasdaq dropped 1.3% before paring losses.
China, through a spokesperson for its embassy, did not respond directly to the US plans but condemned any “unilateral long-arm jurisdiction measures,” warning that Beijing would take “resolute measures” to defend its interests if such policies are implemented.
The proposed restrictions could have broad consequences, given the extensive use of US software in global manufacturing.
Experts note that nearly every imaginable product relies on US technology, meaning the plan could disrupt trade flows with China and have potential costs for the US economy if fully enacted.
Analysts also point to parallels with measures taken by the Biden administration against Russia in 2022, which restricted exports of items made globally using US technology in response to geopolitical conflict.
Diplomatic context and uncertain implementation
The timing of the potential measures comes ahead of a previously scheduled meeting between President Trump and Chinese President Xi Jinping in South Korea later this month.
Trump’s social media statements followed China’s decision to expand rare earth export controls, which are vital to technology manufacturing.
In his post, Trump criticized Beijing for considering “large scale Export Controls on virtually every product,” calling such actions a “moral disgrace.”
Despite the tough rhetoric, Trump has shown signs of moderation, tweeting on October 12 that “The USA wants to help China, not hurt it!!!”
In addition, US Treasury Secretary Scott Bessent confirmed plans to meet with Chinese Vice Premier He Lifeng in Malaysia this week, signaling ongoing diplomatic engagement.
The administration has previously vacillated on export restrictions.
Earlier this year, curbs on shipments of Nvidia and AMD AI chips were implemented and later removed, and restrictions on chip design software imposed in May were lifted in July following disruptions in rare earth shipments.
Narrower policy options remain under discussion, and officials may announce measures as leverage without immediate enforcement.
As the standoff develops, global markets and industries dependent on China-US trade remain closely attentive.
The eventual approach taken could influence not only bilateral trade but also broader supply chains across technology and manufacturing sectors.
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