US-China Trade Truce: A Fragile Peace

Tensions Flare Over Huawei and Semiconductor Supremacy Despite Agreed Tariffs Rollback.

The ink had barely dried on the temporary trade truce between the United States and China before disagreements resurfaced. The focus of contention this time revolves around the future of Beijing's advanced homegrown semiconductors, particularly those developed by Huawei.

Over the past week, China has voiced strong criticism of Washington's warnings to companies regarding the use of AI chips manufactured by Huawei. Beijing has gone so far as to accuse the Trump administration of "undermining" the consensus reached during recent trade talks in Geneva, where both nations agreed to temporarily relax tariffs and utilize a 90-day period to negotiate a comprehensive trade agreement.

This renewed conflict concerning Huawei's cutting-edge chips underscores the complex reality: despite optimistic pronouncements from US and Chinese negotiators, significant differences persist on multiple key issues that may be challenging to reconcile.

On Wednesday, China's Commerce Ministry issued a statement, accusing the US of “abusing export controls to suppress and contain China” and engaging in what it termed "typical acts of unilateral bullying and protectionism." This response was triggered by the Trump administration's announcement last week regarding the revocation of certain Biden-era restrictions designed to limit access to AI chips for foreign adversaries.

As part of that announcement, the US Commerce Department issued guidance on May 12th, warning companies that "using Huawei Ascend chips anywhere in the world would violate US export controls.” The department has since amended the wording, eliminating the phrase "anywhere in the world" in a revised version of the statement.

The Ascend chips are Huawei's most powerful AI processors, employed in training AI models and designed to challenge Nvidia's dominance in high-end chip design. Huawei's endeavors are central to Chinese leader Xi Jinping's strategic goals of cultivating China's domestic capabilities in advanced chip development as it competes with the US for AI leadership.

CNN has reached out to Huawei for comment. Further updates will be provided as this story develops.