Economic tensions between the US and China are rising under the weight of tariffs and spreading into areas where it is harder to reach a consensus – namely, advanced technology – analysts say in the wake of Washington’s reported moves to pause exports of products and technologies related to semiconductor design and jet-engine manufacturing to China.
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The US Department of Commerce has told American electronic design automation firms – including Cadence, Synopsys and Siemens EDA – to stop supplying their technology to China, according to a Financial Times report, citing people familiar with the matter.
Meanwhile, Washington has suspended some licences that allowed American companies to sell products and technology to China’s state-owned aerospace manufacturer, Comac, that could be used to develop the home-grown C919 aircraft, The New York Times reported, also citing anonymous sources. The move was made in response to China’s export controls on critical minerals, it said.
“For US-China relations, this poses a threat in terms of undermining the Geneva ceasefire,” said Nick Marro, principal economist for Asia and lead analyst for global trade at the Economist Intelligence Unit, referring to high-stakes bilateral talks that were held earlier this month in Switzerland and resulted in a temporary pause in their tit-for-tat tariff war.
“We are increasingly seeing US-China frictions migrate away from tariffs and into more difficult areas of the economic relationship,” Marro said.
The decoupling of US-China tech sectors will be prolonged and increasingly complex, regardless of the state of tariff negotiations
Dan Wang, Eurasia Group
In a setback for US President Donald Trump, a US federal court ruled on Wednesday that he had overstepped his authority in using emergency powers to impose hefty levies on all trading partners, blocking his sweeping “Liberation Day” tariffs – and another set of levies on China, Mexico and Canada amid allegations of their role in the US fentanyl crisis.
