The Trump administration escalated tensions with China this week, unveiling a pair of high-impact policy moves that threaten to upend a fragile trade truce and deepen the ongoing economic and technological decoupling between the world's two largest economies.
In swift succession on Wednesday, U.S. officials announced new export controls that would block Chinese companies from acquiring chip-design software, and revealed plans to "aggressively revoke" visas for Chinese students in sensitive fields or with perceived ties to the Chinese Communist Party. The policy changes landed amid cautious optimism in Beijing following a recent agreement to scale back tariffs, raising fresh concerns over the long-term stability of the bilateral relationship.
A Siemens spokesperson confirmed to CNN that the U.S. government had notified the industry of new restrictions targeting semiconductor design tools used in advanced AI chips-an area of fierce competition. The Financial Times first reported the controls, which mark another blow to China's bid for tech self-reliance. Washington had already barred Chinese firms from buying U.S.-made semiconductors and earlier this month issued warnings about Huawei's AI chips.
Liu Pengyu, spokesperson for China's Embassy in Washington, accused the U.S. of "overstretching the concept of national security, abusing export controls, and maliciously blocking and suppressing China." China's Commerce Ministry followed with sharper language, labeling the actions "typical unilateral bullying and protectionism."
The student visa revocation plan-announced by Secretary of State Marco Rubio-sparked immediate backlash from Chinese families and students. "I pray to make it through my undergraduate study safely and smoothly," said Candy, a University of Michigan statistics major currently visiting family in China. "When I first heard the news, I wanted to curse Trump."
More than 270,000 Chinese students were studying in the U.S. as of 2024, many of whom hail from middle-class families that saved for years to fund their education. Critics say the policy places an impossible burden on students in a one-party state, where proving independence from the Communist Party is often unrealistic.
The administration also targeted Harvard University, barring it from enrolling foreign students on unsubstantiated allegations of CCP coordination. The move alarmed students. "Everybody was saying, how could this happen?" one Chinese student at Harvard said anonymously. Yi-yi Liang, a research scholar at the university, added: "This kind of huge policy uncertainty really stops you from just going all in to pursue it."
Observers say the crackdown reflects broader efforts to sever strategic ties. "Both countries are, and have been, on a path of strategic decoupling," said Elizabeth Economy, a senior fellow at the Hoover Institution. "There's a complete lack of a foundation of trust."
Meanwhile, rare earth mineral tensions persist. China continues to enforce tight export controls despite pledging to lift non-tariff barriers under the Geneva accord. "China is still taking a very, very tight approach," said Xu Tianchen, senior economist at the Economist Intelligence Unit in Beijing.
The White House's pressure campaign has also prompted pushback from Beijing, which is leveraging the situation to recruit global scientific talent. Feng Chucheng, founding partner of Hutong Research, said China aims to present itself as "the leader of innovation" and "uncensored scientific research." Universities have already begun hiring high-profile international scientists, including Charles Lieber, formerly of Harvard.
Despite a federal court ruling temporarily blocking some tariffs, the administration has appealed, and talks remain limited. Xu noted that communications have resumed with recent diplomatic engagements between Vice Foreign Minister Ma Zhaoxu and U.S. officials including Ambassador David Perdue and Deputy Secretary of State Christopher Landau. "The bilateral channel for communications has been restored," Xu said. "That is a positive sign."
However, analysts remain skeptical of any meaningful breakthrough beyond fentanyl enforcement cooperation. "Other than that, I don't see the Chinese taking any steps to restructure the way they do business to accommodate U.S. pressure," said Economy.
CNN and The Washington Post contributed to this report.
