In a move to counter China’s new export controls on rare earth minerals, President Trump announced on Friday that the U.S. would impose 100% tariffs on Chinese imports, effective November 1st, in addition to existing tariffs. The President also stated that the U.S. would implement export controls on “any and all critical software” starting on the same date. These actions follow China’s decision to control exports of rare earth minerals, crucial for high-tech industries, which make up around 70% of the global supply. Trump had threatened to cancel an upcoming meeting with Chinese President Xi Jinping in response to China’s actions.
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Nvidia and AMD have reached an agreement with the US government, involving a 15% revenue sharing arrangement from their China chip sales in order to secure export licenses. This unprecedented deal has sparked debate, with security experts expressing concerns about potential national security risks and the Trump administration’s approach. Critics have raised questions regarding the legality and precedent this sets, with some labeling it a “shakedown.” Meanwhile, Nvidia has emphasized the importance of American competitiveness in the global AI market.
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Ukraine has formally raised concerns with the Indian government and the EU regarding the presence of Indian-made or assembled electronic components in Iranian-designed Shahed drones used by Russia. Investigations revealed components from Vishay Intertechnology and Aura Semiconductor, assembled or made in India, were found in these drones. While Indian laws may not have been violated, the issue has prompted Indian security agencies to sensitize manufacturers about export restrictions. Experts suggest that these components may have been diverted to Iran through third countries, highlighting the difficulty in tracking end use after legitimate exports.
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Following a May 2025 agreement in Geneva to reduce import tariffs by 115 percentage points, China accuses the U.S. of violating the deal through recent actions, including AI chip export controls and visa restrictions. The Chinese Commerce Ministry asserts that China fulfilled its obligations, while the U.S. has unilaterally escalated trade tensions. China threatens further retaliatory measures, creating uncertainty in global markets and jeopardizing established supply chains. Further talks have not been scheduled, although a phone call between Presidents Trump and Xi is anticipated.
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Despite US and European sanctions, Russian arms manufacturers continue to receive Western-made microchips crucial for weapons production, via a network of Russian suppliers. These suppliers, many with ties to state-owned entities or oligarchs, obtain chips primarily through intermediaries in China and Hong Kong, circumventing direct import restrictions. An undercover investigation successfully purchased these banned chips from Russian suppliers, confirming the ongoing flow. Stronger sanctions targeting both Russian and foreign entities involved in this supply chain are needed to effectively halt the production of Russian weaponry.
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Haas Automation, a US machine tool manufacturer, was fined $2.5 million for illegally supplying CNC machine parts to Russian and Chinese defense entities, a precedent-setting sanctions enforcement action. The violations involved shipments to companies on the Entity List, supporting the military sectors of both countries, between 2019 and 2024. This settlement, reached after Haas cooperated with the investigation and admitted to 41 violations, involved penalties from both the Bureau of Industry and Security and the Office of Foreign Assets Control. The case highlights the continued flow of sanctioned goods to Russia and emphasizes the need for robust export controls and enforcement.
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The US has implemented new export controls on AI chips, granting unrestricted access only to 18 allied nations, excluding Switzerland. This decision, effective in four months, will limit Switzerland’s access to these crucial chips used extensively in research and industry, despite the presence of US companies and research centers within the country. The US aims to prevent rival nations, particularly China, from obtaining this advanced technology. Swiss officials are engaging with US authorities to address this restriction and secure Switzerland’s status as a trustworthy partner.
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John Q. Hosedrinker