‘Everything is on the table’: Trump administration reportedly considering restricting US software exports to China

The governments of the United States and China are once again at loggerheads over trade policy, and this time the main sticking point is Beijing’s latest proposals restrictions on the export of scarce earth metalsrequiring foreign companies to obtain a permit to export products containing necessary materials.

According to Reuters reportThe Trump administration is currently considering a number of different plans in response – one of which is up-to-date restrictions on the export to China of products made using or containing U.S.-made software.

This would be consistent with Trump’s recent threat to impose export controls on “all critical software,” announced earlier this month along with a up-to-date 100% tariff on Chinese goods. According to Reuters, the Trump administration’s plans are still under discussion, but a US official and three people briefed by US authorities confirmed that a broad restriction on software exports is one of many plans currently being considered.

U.S. Treasury Secretary Scott Bessent, asked on Wednesday about potential software restrictions, said “everything is on the table.” “If these export controls – whether software, engines or other things – are implemented, they will likely be done in consultation with our G7 allies,” he confirmed.

If the restrictions were to remain in place, the number of products covered could potentially be dizzying, as American software is used to produce a huge range of products, from jet engines to agricultural equipment. Microsoft Windows AND Android operating system from Google are also widely used throughout the country and although there are Chinese equivalents, e.g Huawei’s Harmony operating systemthe domino effect of a ban on the export of devices and equipment based on US software to Chinese shores would likely be a huge blow to the Chinese economy.

On the other hand, it is possible that the de minimis rule will have a role to play if this plan comes into force. Although some reports indicate this All this may include products made with or containing US-made softwareyou might think that a more likely play would be something more reasonable, such as determining whether a product would be restricted based on the percentage of US software used in its production.

It’s tough to be sure because the U.S.-China trade relationship appears to have devolved into a brinksmanship at this point, with both countries circling each other with ever-increasing rhetoric. US President Donald Trump is scheduled to meet with Chinese President Xi Jinping to South Korea next week for face-to-face talks, and I think trade restrictions will be an vital item on the agenda.

It wouldn’t be the first time a face-to-face meeting with a world leader caused Trump to change his administration’s position, so I’d say it’s likely that any official announcement will be held back at least until the talks are concluded.

In fact, this would be consistent with Trump’s earlier declaration of 100% China tariffs, which stated that export controls on “critical software” would enter into force on November 1. Trump is scheduled to meet with Xi Jinping on October 30, so it looks like we won’t have to wait long before we find out exactly how far the U.S. government is willing to go in the latest round of trade negotiations.

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