US-China Trade Tensions Resurface Quickly After Surprise Truce

US-China Tensions Flare Anew as Chip Dispute Follows Surprise Trade Truce

Just days after Washington and Beijing announced a temporary trade truce, a new flashpoint has reignited tensions—this time over China’s most advanced homegrown AI semiconductors.

Beijing has sharply criticized the United States in recent days over fresh warnings to global companies against using AI chips developed by Chinese tech giant Huawei. Chinese officials accuse the U.S. of reneging on the spirit of a deal struck at recent Geneva trade talks, where both sides agreed to pause tariff increases and enter a 90-day negotiation window aimed at forging a broader agreement.

The flare-up over Huawei’s powerful Ascend processors—central to Beijing’s ambitions to become a global AI leader—underscores just how fragile the détente really is. Despite cordial words exchanged by negotiators, deep-rooted strategic and technological divisions remain difficult to reconcile.

On Wednesday, China’s Commerce Ministry condemned the U.S. actions, accusing Washington of “abusing export controls to suppress and contain China” and labeling the move “unilateral bullying and protectionism.”

The rebuke came in response to a May 12 U.S. Commerce Department advisory stating that use of Huawei’s Ascend chips, even outside U.S. borders, would violate American export restrictions. The language in that statement was later revised to omit the global application of the rule, but the damage was already done.

Huawei’s Ascend chips are designed to train AI models and are seen as China’s answer to U.S. chipmaker Nvidia’s market dominance. The company’s advances are pivotal to President Xi Jinping’s broader national strategy to achieve semiconductor independence and technological self-sufficiency.

At a high-level political gathering last month, Xi doubled down on his call for “self-reliance” in developing artificial intelligence, urging China to overcome key chokepoints—including access to high-end chips—by mobilizing what he called the nation’s “new whole national system.”

CNN has reached out to Huawei for comment.

Beijing’s Growing Frustration

On Monday, Beijing made clear that the U.S. Commerce Department’s recent revision to its guidance on Huawei was insufficient to resolve the escalating dispute. In a strongly worded statement, China’s Commerce Ministry condemned the “discriminatory measures and market-distorting nature” of the U.S. restrictions, insisting that the core issues remained unaddressed despite the adjustment in phrasing.

“China has engaged in multiple rounds of negotiations and communications with the U.S. through the China-U.S. economic and trade consultation mechanism, emphasizing that American actions have seriously undermined the consensus reached during the high-level talks in Geneva,” the ministry said, urging Washington to “correct its mistake.”

In its latest statement on Wednesday, Beijing went further, issuing a stern warning to international companies. It threatened legal consequences for any individuals or organizations aiding what it described as a U.S. attempt to “globally ban the use of advanced Chinese chips.”

“Any entity that implements or assists in implementing these U.S. measures may be violating China’s Anti-Foreign Sanctions Law and other relevant legislation, and will bear corresponding legal responsibilities,” the ministry said.

“China will closely monitor enforcement of these U.S. restrictions and take resolute actions to protect its legitimate rights and interests,” it added.