WASHINGTON: The Trump administration is weighing a sweeping plan to restrict software-powered exports to China, including items ranging from laptops to jet engines, in retaliation for Beijing’s latest rare earth export controls, according to US officials and sources briefed on the deliberations.
The proposed measure, not yet finalized, would target global shipments containing US software or produced using US software, effectively extending US export authority beyond its borders — a move seen as a dramatic escalation in the trade confrontation between Washington and Beijing.
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President Donald Trump earlier this month threatened to bar “critical software” exports to China and impose 100% tariffs on Chinese goods by November 1, a response to Beijing’s tightening control over rare earth element exports, which are vital to global technology manufacturing.
While the Commerce Department and the White House declined to comment, US Treasury Secretary Scott Bessent confirmed Wednesday that “everything is on the table,” adding that any new controls would likely be implemented in coordination with G7 allies.
US stock markets reacted nervously to the report, with the S&P 500 closing down 0.5% and the Nasdaq falling 1%.
Trade analyst Emily Kilcrease, from the Center for a New American Security, said software controls could give Washington leverage but warned of blowback for US industries dependent on global supply chains. “You would hope they are only putting threats on the table that they intend to carry out,” she said.
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A Chinese embassy spokesperson condemned the reported plan, calling it an act of “unilateral long-arm jurisdiction” and warning that Beijing would take “resolute measures” to defend its interests if the US proceeds.
Officials familiar with the matter said the administration could announce the proposal to pressure China without immediately implementing it. Narrower alternatives are also under discussion.
The plan mirrors export restrictions the Biden administration imposed on Russia in 2022 after its invasion of Ukraine, which banned sales of foreign-made products using US software and technology.
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The debate comes just weeks ahead of a planned meeting between Trump and Chinese President Xi Jinping in South Korea, as both nations navigate an increasingly fraught economic relationship.
Meanwhile, Treasury Secretary Bessent is scheduled to meet Chinese Vice Premier He Lifeng in Malaysia later this week to lay the groundwork for the summit.