US Considers Broad Software Curbs on China, White House Says

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(Bloomberg) — The Trump administration is weighing export restrictions against China that would bar the purchase of a wide swath of critical software, a White House official said Wednesday.

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The acknowledgment, given on the condition of anonymity to detail internal deliberations, came after Reuters reported that the US was weighing efforts similar to the curbs implemented against Russia following the invasion of Ukraine if China did not backtrack from its threat to restrict rare-earth exports.

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“Everything is on the table,” US Treasury Secretary Scott Bessent told reporters later when asked about limits on software exports to China. “If these export controls, whether it’s software, engines or other things happen, it will likely be in coordination with our G-7 allies.”

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The Reuters report did not detail specific curbs or a definitive timeline for the new measures to be announced, but the US implemented export controls on enterprise resource planning, customer relationship management and computer-aided design software against Russia in recent years.

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China’s Foreign Ministry didn’t immediately respond to a request for comment on the possible software curbs or Bessent’s pledge to work with Group of Seven nations.

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It’s not clear how serious the effort is. Any sweeping technology restrictions on China could disrupt a fragile US economy already absorbing the impact of President Donald Trump’s tariffs. 

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Bessent added that senior US officials were entering negotiations with the Chinese government “with good intentions” and “great respect.”

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Both Beijing and Washington have adopted a pattern of floating punishing trade measures ahead of negotiations, providing leverage and bargaining chips for talks aimed at reducing barriers between the world’s largest economies.

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Earlier this month, Trump said he would impose an additional 100% tariff on China as well as export controls on “any and all critical software” beginning at the start of next month. The US has said the move is in retaliation for China’s announced restrictions on the flow of critical rare-earth minerals needed to make numerous consumer products — including motors, semiconductors and fighter jets — as well as new port fees on US ships.

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But Trump has also predicted that talks planned for next week with Chinese President Xi Jinping would produce a “good deal” on trade.

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Michael Deng, geoeconomics technology analyst at Bloomberg Economics, said the software restrictions would be possible under existing export-control rules but would be difficult to execute given the government department that would carry them out, the Bureau of Industry and Security, has limited capacity and already strained licensing system.

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A ban on “critical software” would mean greater risk for the sales in China of Cadence Design Systems Inc., Dassault Systemes and Synopsys Inc., wrote Niraj Patel, a senior tech industry analyst at Bloomberg Intelligence. Other “areas that could be labeled as critical include Nvidia’s toolkits (CUDA), AI platforms (OpenAI), cryptography or encryption (NXP and Palo Alto Networks), firmware tools (ARM Compiler) and telecom (Qualcomm),” he added.