By Anthony Marcus for Eurasia Business News, October 22, 2025. Article n°1852

The U.S. is considering imposing export restrictions on products made with U.S. software, particularly targeting semiconductor exports to China. These potential new controls would expand the existing foreign direct product rule (FDPR), which allows the U.S. to regulate foreign-made products that incorporate American technology, including software, even if produced outside the U.S. This move aims to curb China’s ability to advance its semiconductor industry by restricting access to critical technology embedded in chip manufacturing and AI hardware.

While previous U.S. semiconductor export controls have focused on hardware and manufacturing equipment, the new measures would directly address software used in chip design and production processes, intensifying restrictions on China’s technology supply chain. This is part of a broader U.S. strategy to retain technological superiority and to limit China’s progress in key advanced technology sectors, including AI and semiconductors.

China has responded with increased export controls on rare earths and related technologies, signaling a technology and trade standoff ahead of upcoming high-level diplomatic talks. The dynamic marks a complex “trade war” focusing on technology and critical materials supply chains, with the U.S. leveraging software-based export curbs as the next frontier in restricting China’s tech ambitions.

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Currently, the U.S. imposes approximately 30-40% tariffs on many Chinese goods, with steel facing 50% and consumer products around 7.5%. Trump announced on October 10, plans to add an additional 100% tariff on top of existing ones, effective November 1 or sooner, potentially bringing some tariffs as high as 130-145%. These tariffs target a broad range of Chinese imports as retaliation for China’s export controls on critical rare earth elements, vital for electronics, defense, and automotive sectors.

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© Copyright 2025 – Eurasia Business News. Article no. 1852