It did not take long for tensions to flare once again between the world's two largest powers. No sooner had a truce on tariffs been declared on Monday, May 12, in Geneva between the United States and China than the battle over the strategic sector of artificial intelligence (AI) reignited. As early as May 13, the Trump administration began outlining its strategy to slow China's progress in semiconductor technology, sparking outrage in Beijing.

The reason: According to a directive from the Bureau of Industry and Security, the division of the US Department of Commerce responsible for controlling sensitive exports, using Huawei Ascend chips "anywhere in the world" may violate US export control regulations. Washington explained that the latest chips from Chinese manufacturer Huawei, the Ascend 910 models, had been designed or produced with certain software or equipment originating from the US.

The phrase "anywhere in the world" has since been removed from the Commerce Department's statement, but the damage was done. "The recent attempt at a complete blockade of Chinese chips is a blatant act of unilateralism and intimidation," condemned Chinese Foreign Minister Wang Yi on May 20. The already fragile atmosphere of dialogue emerging from the 90-day trade truce agreed on the shores of Lake Geneva had begun to unravel. According to Beijing, Washington had "seriously undermined the Geneva consensus."

Criminal prosecutions worldwide

China warned that anyone complying with US measures would be suspected of violating its own law against foreign sanctions. The result: Any company worldwide purchasing the latest Huawei chips would come under US scrutiny, while those obeying US directives could face criminal prosecution in China.

You have 74.9% of this article left to read. The rest is for subscribers only.