US planned for broader tech restrictions on China had London negotiations failed
When the chips are down, double down on chips.
On Monday, the Wall Street Journal reported on the US Commerce Department’s contingency plan if the recent London talks had gone poorly:
- “The Commerce Department unit overseeing export controls…weighed tougher limits on semiconductors, including cutting off sales to China of a wider swath of chip-manufacturing equipment.”
- “Such a move would have covered equipment used to make everyday semiconductors, expanding beyond existing export limits on equipment for producing advanced chips.”
On the same day, Reuters reported that US officials had pressured Vietnam "to reduce its dependency on Chinese high-tech," including by “reducing the use of Chinese tech in devices that are assembled in the country before being exported to America.”
ICYMI: The Trump administration threatened 46% import duties on Vietnam as part of its “Liberation Day” tariffs.
- Washington is also reportedly pressuring other trade partners to downsize economic ties with China in exchange for tariff relief.
Get smart: It’s hard to comment on the impact of these proposed US measures without knowing specifics, but it’s clear Washington continues to view tech restrictions as its best bargaining chip.
- The US will dust off these plans if trade tensions flare up again, and deputize third countries to participate in its tech blockade.