US Reportedly Weighing Restrictions On Exports To China That Include US Software

• According to a Reuters report, this is not the only option on the table, and it would make good on President Donald Trump's recent threat to block "critical software" exports to China.
• The report also noted that the move may not go forward.
• The move by the U.S. is in response to Beijing’s recent rare earth export limitations.

The Trump administration is reportedly considering a proposal to restrict a wide range of software-enabled exports to China, including items such as laptops and jet engines, in response to Beijing’s recent rare earth export restrictions.

According to a Reuters report, citing a U.S. official and sources briefed by authorities, this is not the only option on the table, and it would make good on President Donald Trump's recent threat to block "critical software" exports to China by imposing restrictions on global shipments of products that either incorporate U.S. software or were manufactured using it.

The report noted that the details of this proposal by Trump are being reported for the first time, while also indicating that the government may not move forward with it.

Significant Escalation In Standoff

According to Reuters, the Trump administration's move to bar exports to China marks a significant escalation in its standoff with China, despite calls from within the U.S. government for a gentler approach.

The report said that a spokesperson for the Chinese embassy did not comment on the specific U.S. measures under consideration but said China opposed the U.S. “imposing unilateral long-arm jurisdiction measures.”

The spokesperson told Reuters that China vowed to "take resolute measures to protect its legitimate rights and interests” if the U.S. goes ahead with this proposal, which the Chinese embassy views as the wrong path.

The report said that this move could significantly disrupt global trade with China, particularly in the technology sector, and may carry economic consequences for the U.S. if fully enacted.

Trump’s Comments On China In Recent Weeks

U.S. President Donald Trump said on Friday that he could move up the November 1 deadline to increase tariffs on China if he wanted. Earlier, Trump had noted that the tariff hikes on China are “not sustainable,” while stating that the latter forced him to levy those tariffs. However, he expressed optimism about resolving the dispute.

Last week, Trump had announced plans to impose 100% tariffs on China in retaliation for the country’s restrictions on rare earth exports, according to a Reuters report.

However, President Trump softened his stance later, stating that it “will all be fine” in a post on Truth Social on Sunday. “Don’t worry about China, it will all be fine!”

Meanwhile, U.S. equities fell in Wednesday afternoon trade. At the time of writing, the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, was down 0.92%, the Invesco QQQ Trust ETF (QQQ) declined 1.52%, while the SPDR Dow Jones Industrial Average ETF Trust (DIA) fell 0.72%. 

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