Trump's Software Export Curbs: New Escalation in U.S.-China Trade Tensions?

The Trump administration is considering new software export controls to China, in response to China's tightened rare earth exports. While still under discussion, such measures highlight U.S. leverage but could impact domestic industries. Treasury Secretary Scott Bessent indicates possible coordination with G7 allies, as global markets react to the news.

The Trump administration is evaluating a plan to limit software-powered exports to China, like laptops and jet engines, in response to China's rare earth export restrictions, informed sources say. This potential move aims to make good on President Donald Trump's earlier threats to bar 'critical software' exports to China.

On October 10, Trump announced via social media the imposition of additional 100% tariffs on China's U.S.-bound shipments, coupled with new export controls on critical software by November 1. While details are yet unresolved, the consideration of these controls marks a potential escalation of tensions with China, despite some officials advocating for a less confrontational approach.

U.S. Treasury Secretary Scott Bessent confirmed that 'everything is on the table,' potentially including coordination with G7 allies. Stock markets dipped in response, with the S&P 500 closing down 0.5%. Though no final decisions have been made, the implications could significantly affect U.S.-China trade, especially in technology sectors.

(With inputs from agencies.)