On June 26, 2025, US Secretary of Commerce Howard Lutnick confirmed that the United States and China had agreed to a "framework" agreement with China regarding US export controls and Chinese supplies of rare earth minerals, as of June 24, 2025. While the two countries' tariff disputes have dominated headlines, the trade negotiations have evolved over the past two months to include specific measures on export controls. Although US officials have yet to formally confirm the specific terms of the deal relating to US export controls, the US has already taken steps to rescind some of the "countermeasures" it introduced in the past several months, such as the ban on exports of electronic design automation (EDA) software to China. Other countermeasures, such as those targeting Huawei's "Ascend" line of chips, remain in place notwithstanding the "framework."
In brief, while it is expected that the agreement may forestall at least some further escalation of the broader trade dispute between the US and China in the near term, there are presently no signs that the deal will address (or is intended to address) anything beyond the specific "countermeasures" introduced by both sides since April 2025. The deal is therefore limited in scope. Broader, pre-existing issues regarding US export controls, e.g., reported circumvention of US export controls; inconsistent enforcement of US export controls; or the perception that US export controls lag technological developments in key sectors such as semiconductor development and AI, do not appear to be addressed in the current agreement.
Escalation of export controls measures between the US and China
On April 4, 2025, in parallel to the escalating tensions between the United States and China over tariffs, China's Ministry of Commerce (MOFCOM) and Customs imposed licensing restrictions on the export of seven critical rare earth elements to the United States. By the beginning of May 2025, both the US and China had taken mutually retaliatory measures by imposing high tariffs on a wide range of goods and technology. Representatives from the two countries met in Geneva, Switzerland, in an attempt to de-escalate the trade tensions in May. On May 12, 2025, the US and China released a Joint Statement on their initial meeting and announced a 90-day pause on most of the retaliatory tariffs. Neither the Joint Statement nor the Fact Sheet released by the Trump Administration the same day addressed export controls.
However, in the days and weeks following the Joint Statement, the Bureau of Industry and Security (BIS), the office primarily responsible for the enforcement of US export controls, significantly escalated the trade dispute by imposing "countermeasures" on China related to US export controls:
- On May 12, 2025, BIS released formal guidance targeting the "Huawei Ascend" line of semiconductor chips. The Ascend chips, produced by Huawei's subsidiary HiSilicon, are specifically designed as advanced AI processors or accelerators for use in compute-heavy tasks such as model training and inference in data centers and cloud environments. BIS claimed in its guidance that the Ascend chips "were likely developed or produced in violation of US export controls." As a result, according to BIS, any use of Ascend chips may be in violation of US export controls and "subject companies to BIS enforcement action" pursuant to General Prohibition 10 of the Export Administration Regulations (EAR).
- On May 13, 2025, BIS released a policy statement on when US export controls may apply to advanced computing integrated circuits (ICs) and other commodities used to train AI models. Notably, BIS announced that exports, reexports, or transfers (in-country) of advanced computing ICs and items subject to the EAR to (i) infrastructure as a service (IaaS) providers such as data centers; or (ii) any provision of "support" (including performing any contract, service, or employment) to such an IaaS provider may violate the EAR if the person has "knowledge" that the items or activity will be used to train AI models for or on behalf of persons in Country Group D:5 countries (such as China and Macau).
- On May 29, 2025, Cadence Design Systems Inc. and Synopsys Inc., two of the global leaders in EDA software, issued public statements in which they revealed that they had received letters from BIS imposing license requirements on the export, reexport, or transfer (in-country) of EDA software and technology classified under Export Control Classification Numbers (ECCNs) 3D991 and 3E991 if a party to the transaction is located in China, or is a Chinese military end user (wherever located). To be clear, BIS notified the companies through a so-called "is informed" letter, which BIS has historically used to inform parties of additional license requirements. Unlike historic uses of the "is informed" letter, however, which targeted specific persons or entities, the communications to the companies purported to restrict covered transactions with all of China. BIS issued similar letters regarding NVIDIA's H20 semiconductor chips in April 2025.
In addition to the above measures, BIS suspended approval of all export licenses for US-made jet engines and key components destined for Chinese commercial aircraft manufacturers, effectively blocking delivery of both engines and essential spare parts to Chinese carriers. Separately, the US imposed restrictions on the export of ethane to China, which is a critical feedstock for China's petrochemical industry.
Partial de-escalation in June and July 2025
On June 9 and 10, 2025, US and Chinese representatives met in London with the announced intention to de-escalate the broadening trade war. Emerging from the meetings in London, Secretary Lutnick announced that the parties had reached a "framework" to implement the consensus reached in Geneva. While the parties' negotiations culminated in the agreement reached on June 24, 2025, the details of that agreement with respect to US export controls remain unclear.
In his public comments on June 27, Secretary Lutnick stated that the US agreed to "take down our countermeasures" in exchange for China's lifting of restrictions on the export of rare earth minerals to the United States. He did not identify the specific "countermeasures" that may be lifted or refer to US export controls, but the controls noted above appear to be among the "countermeasures" the US agreed to lift, since the US has already taken substantive steps to unwind some of them. For example, on July 2, 2025, Synopsys announced that it had received a letter from BIS informing Synopsys that the export restrictions on China imposed in BIS's May 29, 2025 letter to Synopsys "have now been rescinded, effective immediately." Subsequently, on July 3, 2025, public reports confirmed that the US lifted restrictions on the export of jet engines and parts to China and had simultaneously lifted the restrictions on ethane exports.
Apart from the above measures, there have been no public statements by Trump Administration officials on other specific steps that the US may take to de-escalate tensions with respect to US export controls.
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