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| Illustration: Craig Stephens (Photo: South China Morning Post) |
On April 16, amid rising China-U.S. tariff tensions, NVIDIA abruptly announced that its H20 chip — specially designed for the Chinese market — had been added to the U.S. Commerce Department's export control list, prompting an immediate drop in its stock price. The next day, NVIDIA CEO Jensen Huang arrived in Beijing and met with Vice Premier He Lifeng to discuss the future of chip supplies to China.
The incident highlights how NVIDIA has become entangled in the intensifying wave of China-U.S. technological decoupling — which has grown markedly more aggressive and expansive since the beginning of Donald Trump's second term. This shift is posing serious challenges for Chinese tech companies and sending shock waves through the broader bilateral relationship.
Under Trump 2.0, Washington's China tech policy has shifted from a defensive approach centered on risk control and technological containment to a more offensive strategy focused on strategic pressure and systemic restructuring. This transformation is expected to continue evolving in more radical and multidimensional directions. The shift is rooted in Trump's long-term strategic recalibration of U.S. tech governance.
First, it involves a move from regulatory constraint to competition, dismantling existing oversight frameworks and associated compliance burdens. The Trump administration no longer treats artificial intelligence, cryptocurrency and digital platforms as objects of preemptive regulation; instead, it defines them as core national strategic assets.The administration has taken steps at both the executive and legislative levels to roll back the strict regulatory architecture built under the Biden presidency, to disrupt ongoing rule-making agendas and to unleash the full market potential of tech innovation.
Second, Trump has implemented a capital-driven national tech strategy, giving rise to a model of American “tech state capitalism.” The administration increasingly relies on Silicon Valley giants, advanced defense contractors and crypto-financial platforms as core actors in executing federal technology policy. Measures such as the creation of a national bitcoin reserve, preferential federal procurement from tech incumbents, and the channeling of defense contracts to AI firms are examples of this approach. On this trajectory, a combination of politics, technology and capital aligned with Trump is rapidly taking shape.
Third, Trump is pushing to reindustrialize the domestic tech supply chain and reduce dependence on foreign entities. Using tools such as tariffs and foreign investment reviews, The Trump administration has sought to eliminate excessive foreign participation in domestic supply chains. Looking ahead, it will continue advancing domestic manufacturing capabilities in sectors such as semiconductors, rare earths and advanced equipment.Stricter localization requirements have been imposed on companies operating in the U.S. such as Samsung and TSMC, while large-scale federal tech projects, such as the Stargate initiative to build domestic AI infrastructure, have become flagships of Trump's techno-industrial agenda, with more initiatives expected to follow.
As Trump's tech strategy evolves, U.S. competition against China is also becoming a full-spectrum effort — centered on a tripartite framework of export restrictions, market exclusion and capital flow disruption.
On the export control front, the Trump administration is expected to continually update the entity list and broaden the categories of restricted technologies. The recent emergence of Chinese large language models such as DeepSeek, which have shown performance comparable to U.S. products, has raised doubts in Washington over the efficacy of existing export controls. Critics cite low implementation, complex rules and insufficient allied coordination. In response, lawmakers are pushing for tighter restrictions, as seen in the latest move to ban exports of the NVIDIA H20 chip, a version previously tailored to sidestep earlier rules.
On the market access front, the Trump administration aims to systematically exclude Chinese technology products from U.S. capital and consumer markets. The crackdown on DeepSeek is illustrative: While federal and state-level bans on the software in government devices have already taken effect, future measures could include complete app store delisting and U.S. cloud providers banned from hosting Chinese platforms. This points to a growing operational squeeze on Chinese tech firms trying to localize or scale within the U.S. market.
On the capital side, the Trump administration is tightening scrutiny over U.S. tech capital flowing into China. It seeks to block bilateral investment channels as a way to prevent so-called technology transfers and intellectual property theft. Trump s economic team has accused Chinese companies of leveraging U.S. financial markets to penetrate sensitive sectors and has responded by expanding investment blacklists under an “America first” investment policy, strengthening oversight of Chinese companies listed in the U.S. and exploring proposals to delist Chinese companies from U.S. stock exchanges.
Taken together, these moves show that Trump's toolbox for containing China's technological rise is rapidly expanding and growing more forceful. The target is no longer individual companies or products but the entire supply chain, value chain and standards system in which China participates. Trump's team may even attempt to globalize this exclusionary framework via multilateral mechanisms by constructing a worldwide architecture of coordinated pressure on China's tech sector.
Trump's aggressive escalation of U.S. technology restrictions against China is already having a profound impact on Chinese tech firms and China-U.S. relations, and for Chinese tech companies the implications are severe.
First, with external access to both technology and markets tightening, innovation pipelines and global expansion strategies are being severely disrupted. The operational space for Chinese companies in the United States is shrinking rapidly.Second, cross-border financing and international collaboration capabilities have been structurally weakened. Early-stage fundraising, project valuations, and viable exit strategies are becoming more difficult, especially for deep tech startups.Third, the high-pressure policy environment has heightened uncertainty around long-term business development, pushing companies toward more conservative strategies. Many are reducing high-risk investments, scaling back overseas ambitions and focusing more on domestic markets.
Historically, despite intense competition in areas such as innovation, standard-setting and talent, China and the U.S. maintained a degree of buffering and cooperation. Today, that space is disappearing. Trump's second term has securitized and weaponized technology, turning it into a frontline instrument for suppressing China's development to preserve U.S. hegemony and contesting global rule-making.
This shift is accelerating the trend toward technological decoupling, driving China-U.S. relations from intra-system competition to systemic confrontation. It threatens to unravel the intricate tech economy entanglement forged through decades of economic globalization, and it is fragmenting the foundations of multilateral technology governance. The tech rivalry is fast becoming a key variable in the trajectory of China-U.S. relations — one that not only reflects divergent innovation paths but also fundamentally reshapes the global technological order.
