China has urged the United States to “immediately correct its wrongdoings” and halt measures it deems “discriminatory.”

This statement, released by China’s commerce ministry on May 19, 2025, responds to US guidance warning companies against using advanced Chinese computer chips, including Huawei’s Ascend AI chips.

The US Commerce Department recently advised businesses about potential risks associated with using certain Chinese chip products that may violate export controls.

In response, China’s commerce ministry accused the US of misusing export control measures and imposing stricter restrictions on Chinese technology without adequate justification.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ Escalating controls reflect broader tech decoupling strategy

The U.S. warning about Huawei’s Ascend AI chips represents the latest chapter in a systematic expansion of semiconductor export controls that began intensifying in 2018-2019 with the Export Control Reform Act 1.

These measures have progressively targeted more advanced technologies, with regulations updated in 2022, 2023, and 2024 to specifically restrict China’s access to chips critical for artificial intelligence and high-performance computing 2.

The U.S. strategy has evolved from targeting individual companies to implementing country-wide controls on entire technology categories, as evidenced by recent restrictions on high-bandwidth memory chips and semiconductor manufacturing equipment 3.

This policy shift moves from traditional trade negotiations to technology-specific restrictions aimed at maintaining U.S. technological leadership, particularly in areas with military applications 1.

The timing of this guidance, during what appeared to be a cooling of tensions after the Geneva talks, shows how semiconductor technology remains a separate track from broader trade relations, which complicates diplomatic efforts.

2️⃣ Economic impacts create complex feedback loops

Export controls have already produced significant economic consequences for U.S. semiconductor firms, with a Federal Reserve Bank of New York report documenting revenue drops and employment declines following previous restrictions 4.

U.S. companies that previously sold advanced chips to China have struggled to identify replacement markets, creating what industry analysts call a “chilling effect” on commercial relationships throughout the semiconductor ecosystem 4.

The restrictions are simultaneously accelerating China’s push for technological self-reliance, with the Chinese government significantly increasing funding for domestic semiconductor development in response to U.S. export controls 5.