Why US chip controls took a back seat at Xi-Trump summit

There is little question that Jensen Huang and Lisa Su, the heads of U.S. semiconductor chip giants Nvidia and Advanced Micro Devices (AMD), had secured two of the best seats in the house at the White House state dinner on Thursday evening: at the head table alongside the two presidents and their wives.

But what remains unclear is how much progress they were able to make on their primary goal of restoring access to the Chinese market, amid entrenched opposition to that happening in both China and the U.S.

That is because U.S. semiconductor chip export controls do not seem to have been a major sticking point during Chinese President Xi Jinping’s historic state visit to Washington this week, despite most of the restrictions still being in place.

Early indications suggest that export controls were not a significant topic of debate during the talks, with no direct mention of them in the readouts so far from both Beijing and Washington summarising the achievements of the Xi–Trump summit.

“This is especially strange considering that export controls were brought up regularly by Xi during his talks with [President Joe] Biden,” said Kyle Chan, a fellow at Washington think tank Brookings specialising in Chinese technology.

On Friday, U.S. Trade Representative Jamieson Greer told CNBC that the U.S. side had taken “off the table” all the export controls “that are national security issues” during trade talks this week. China’s Ministry of Foreign Affairs on Saturday did not mention export controls or Beijing’s usual references to U.S. tech restrictions in its announcement of eight deliverables from the summit, including the launch of a China-U.S. dialogue on AI risks.

But if export controls have become less of a sticking point, it is not because they have gone away. The Trump administration has largely kept intact restrictions first introduced by the Biden administration in October 2022 on China’s ability to obtain advanced chips and chipmaking equipment.

Some areas were even tightened at the start of Trump’s second term, including a ban on exporting Nvidia’s H20 chip to China, which the company had developed specifically to comply with U.S. rules.

According to Chan, Beijing has likely grown more comfortable with the export controls already in place as it looks to deepen its technological self-reliance campaign to reduce its reliance on U.S. tech.

“The biggest thing that’s changed is China’s growing confidence in its chip self-reliance efforts,” he said. “While the 2022 export controls may have surprised Beijing at the time, China has made real progress on building a domestic supply chain for advanced semiconductors in the years since.”

A temporary stalemate

When Washington first imposed sweeping export controls on China in 2022, Beijing treated them as a direct attack on China’s technological and economic rise and began regularly calling for their removal in talks with the U.S.

The controls became a wedge issue in U.S.-China relations. At China-U.S. talks on AI safety in Geneva in May 2024, Chinese officials tied progress on AI safety to the U.S. unwinding those controls, former Biden administration officials have said.

This was not an issue this time around. Export controls were not brought up during the AI safety related talks between Chinese Vice-Premier He Lifeng and U.S. Treasury Secretary Scott Bessent last Sunday in New York, according to Greer, who also attended the meeting.

The AI talks, which also resulted in the launch of a “bilateral communication channel” for AI incidents, were “candid, in-depth and constructive,” Beijing said.

Paul Triolo, a partner and technology policy lead at DGA-Albright Stonebridge Group, said Beijing is likely “pleased with progress that the domestic semiconductor industry has made despite the [U.S.] controls”.

Chinese chip manufacturers are taking a greater share of the domestic market. According to TrendForce, Chinese chip suppliers led by Huawei Technologies and Cambricon Technologies are set to capture nearly 80 percent of the domestic AI server market this year.

Nvidia, AMD and other foreign suppliers’ share is set to fall to 21 percent in 2026 from 34 percent last year, according to the Taipei-based research firm.

Domestic chip substitution is expected to further ramp up in the coming years as tech self-reliance remains a central pillar of China’s 15th Five-Year Plan. Earlier this year, Beijing resisted efforts by both President Donald Trump and Nvidia’s Huang to push for the U.S. chip giant’s less powerful H200 chips to be allowed back into the Chinese market.

Beijing has since allowed a small number of Chinese tech companies to purchase the chip with the quantities capped, as it continues to promote domestic chip adoption instead. Meanwhile, the delayed approval caused Nvidia to take a $400 million charge due to excess H200 inventory in the first half of the year.

Spanner in the works

Still, talk of an export control impasse might still be premature. That is because Beijing is likely to push back forcefully against any new restrictions the U.S. introduces, with some already on the horizon, according to Triolo.

A major area of concern is U.S. congressional efforts to bolster its export controls regime. One of these is the Match Act, which would require U.S. allies such as Japan and the Netherlands to more closely align with U.S. restrictions on selling advanced semiconductor equipment to China, such as Dutch firm ASML’s deep ultraviolet (DUV) immersion lithography machines.

The bill has been folded into the National Defence Authorisation Act (NDAA) in the U.S. Senate, improving its chances of becoming law.

“Chinese officials view any new controls as a violation of the Busan agreement, and [would] retaliate strongly via expanded controls on rare earths and related production equipment,” said Triolo, referring to the economic detente reached in October 2025 between the two countries that paused escalating tit-for-tat tariffs and export controls, which the two leaders agreed to extend to January.

“Beijing likely sought assurances on this [this week],” he said.

Even as the official readouts of the two presidents’ meeting have largely focused on trade and investment, senior Chinese officials have referenced U.S. technological restrictions on China in statements elsewhere.

On Saturday, Chinese Foreign Minister Wang Yi said in a post-meeting statement that China and the U.S. should not “adopt a defensive posture towards each other” in the emerging field of AI.

The relative quiet on export controls this week might therefore reflect strong domestic pressure on both sides not to concede ground, Triolo said, with powerful contingents in the U.S. pushing for tighter controls and those in China for greater self-reliance.

“Neither side will acknowledge progress on any of these issues, given domestic sensitivities around anything that could be perceived as a concession,” he said.

Read the article at SCMP.