U.S.–China Trade War Reignites: Strategic Shake-ups and New Export Restrictions Fuel Tensions

The long-standing trade conflict between the United States and China has entered a new phase, marked by renewed tariffs, personnel changes in Beijing, and tightened restrictions on advanced technologies. These moves could have far-reaching implications for global trade flows, financial markets, and the future of the tech supply chain.

Beijing Replaces Chief Trade Negotiator – A Signal for Escalation or Reset?

On Wednesday, the Chinese government announced the appointment of Li Chenggang as Vice Minister of Commerce and lead representative for international trade negotiations, replacing Wang Shouwen, who had long represented China in dialogues with Washington. Li brings substantial experience in global trade policy, having served as China’s representative to the World Trade Organization.

According to Alfredo Montufar-Helu, head of the China Center at The Conference Board, the timing of this move is “abrupt and potentially disruptive,” suggesting that Beijing’s leadership may be looking to recalibrate its approach amid escalating tensions. At present, there is no indication of resumed trade talks between the two nations.

Washington Targets AI Hardware: New Export Controls on Nvidia and AMD

In parallel, the U.S. Commerce Department announced Tuesday new licensing requirements for exports of advanced artificial intelligence chips – specifically Nvidia’s H20 and AMD’s MI308 – to China. These chips are essential components in AI development and data infrastructure, making them a strategic chokepoint.

A Commerce Department spokesperson stated the move was part of a broader directive to “safeguard our national and economic security.”

Following the announcement, Nvidia said it would incur a $5.5 billion charge due to the loss of access to the Chinese market for its H20 chip – one of its top-performing products globally.

Tariff Pressures Mount – Global Trade at Risk

Since President Trump’s inauguration in January, the U.S. has implemented 145% cumulative tariffs on all Chinese imports, including a 20% duty linked to China’s alleged role in the fentanyl trade. In retaliation, China has imposed up to 125% tariffs on U.S. goods. Analysts warn that tariffs at these levels could bring bilateral trade to a near standstill.

White House press secretary Karoline Leavitt commented that “the ball is in China’s court,” reiterating the administration’s position that China must take the initiative if it wants to reach a new trade agreement.

What’s Next: Further Breakdown or Diplomatic Opening?

Despite the heated exchanges, some analysts view the appointment of Li Chenggang as a potential overture for a more business-friendly approach. Li recently participated in a high-level symposium with private entrepreneurs, reflecting President Xi Jinping’s renewed emphasis on supporting domestic business interests – a signal that China may be looking to stabilize external trade relations.

At this stage, it remains unclear whether the current developments will lead to diplomatic re-engagement or set the stage for a deeper fracture in U.S.–China economic relations.