Trump takes tough new approach to choking off China’s access to US tech

Dozens of entities added to trade blacklist as Silicon Valley frets it will lose business from Washington’s curbs.

The Huaqiangbei electronics market in Shenzhen, China, where some of the sellers of Nvidia chips are located. Picture: David Kirton/Reuters

The Trump administration demonstrated that it wants tougher limits on China’s access to American technology than those introduced by the Biden administration, targeting Chinese companies including a server maker that buys Nvidia chips.

The US on Tuesday added dozens of Chinese companies to a trade blacklist over national security concerns. American businesses seeking to sell technology to these companies will need approval from the government.

Among those added were subsidiaries of Inspur Group, China’s largest server maker and a major customer for US chip makers such as Nvidia, Intel and Advanced Micro Devices. Companies linked to China’s largest supercomputer maker, Sugon, were also added.

The move is the clearest signal yet that the Trump administration intends to further limit what kind of American technology Chinese companies can buy, despite complaints from Silicon Valley companies, including Nvidia, that former President Joe Biden already went too far.

In the Biden administration’s final days, it imposed limits on third countries buying cutting-edge American chips, hoping to prevent those chips from making their way to China. US tech executives have asked President Trump to roll back those limits before they take effect in May.

The latest export controls add to friction between the world’s two largest economies. Since he took office, Trump has imposed cumulative new tariffs on China of 20 per cent, on top of the levies imposed during his first term.

Nearly 80 companies were put on the Commerce Department’s blacklist, known as the entity list. The bulk of them are Chinese. The department said it acted to limit China’s access to high performance computing for military applications and stymie the development of its hypersonic weapons program.

“American technology should never be used against the American people,” said Jeffrey Kessler, the head of the department’s Bureau of Industry and Security.

A spokesman for China’s Foreign Ministry on Wednesday called the US action “typical hegemonic behaviour that severely violates international law.”

Until now, the US has in general allowed affiliates of entity-listed Chinese companies to purchase controlled technology provided the affiliates themselves aren’t listed.

The Wall Street Journal reported two years ago that a subsidiary of Inspur Group called Inspur Electronic Information Industry could still buy American technology even though the parent was on the entity list.

On Tuesday, six Inspur affiliates including Inspur Electronic were added to the list. The US said the affiliates were contributing to China’s development of supercomputers for military end use.

According to business-intelligence firm WireScreen, US server maker Aivres Systems is wholly owned by Inspur Electronic. The latter is one-third owned by Inspur Group, according to corporate records.

Aivres has been assembling high-end artificial-intelligence equipment for Nvidia. The AI-chip giant has said that Aivres will make servers using chips in the Blackwell family, Nvidia’s newest and most powerful processors.

Aivres advertises on its website that it sells servers and infrastructure powered by Blackwell chips, which are banned from sale into China. The Aivres website shows its clients include a US university, a Japanese industrial-camera maker and South Korean AI and internet companies. Aivres says on its site that it complies with export controls.

Nvidia declined to comment on the new US rules or its relationship with Aivres. Inspur didn’t respond to a request for comment.

About two months after Inspur Group was added to the trade blacklist in March 2023, California-based Inspur Systems changed its name to Aivres Systems, according to state business records.

Inspur Electronic, the Aivres parent, works with Nvidia in China, assembling and selling AI infrastructure using certain of Nvidia’s Hopper chips, according to Inspur Electronic’s website. Nvidia tailored those chips for the Chinese market, scaling back their capabilities to comply with US export controls.

In its annual threat assessment published Tuesday, the US intelligence community called China the top military and cyber threat to the US. They said Beijing sought to displace the US as the top AI power by 2030. The Chinese foreign ministry spokesman said the report reflected an “outdated Cold War mentality.”

Wall Street Journal