US-China Trade Tensions Escalate Over Huawei's AI Chips

Just days after the US and China declared a temporary truce on tariffs, tensions have flared again over Beijing's advanced semiconductor technology.

China has strongly criticized Washington for warning companies against using AI chips made by Huawei, accusing the Trump administration of "undermining" the recent Geneva trade consensus, where both sides agreed to temporarily roll back tariffs during a 90-day negotiation window.

On Wednesday, China's Commerce Ministry accused the US of "abusing export controls to suppress and contain China" and engaging in "typical acts of unilateral bullying and protectionism."

The dispute centres on the US Commerce Department's May 12 guidance warning that "using Huawei Ascend chips anywhere in the world would violate US export controls" - language later modified to remove "anywhere in the world." Beijing maintains that even with this change, the "discriminatory measures and market-distorting nature" remain.

China has threatened legal action against organizations that help implement US restrictions, citing potential violations of China's Anti-Foreign Sanctions Law.

Meanwhile, Nvidia CEO Jensen Huang criticized US export controls at Taiwan's Computex trade show, claiming they cost his company "multiple billion dollars" in inventory write-offs while inadvertently accelerating Chinese chip development. However, he praised Trump's rescinding of Biden-era export restrictions as "a great reversal of a wrong policy."

Nvidia recently secured a major deal in Saudi Arabia during Trump's visit to the Gulf, involving the sale of hundreds of thousands of advanced GPUs over five years, starting with 18,000 top-tier GB300 Grace Blackwell chips