Trump officials urge allies to limit chip exports to China after DeepSeek’s rise shocked industry: report

The Trump administration is looking to expand a crackdown on China’s access to computer chips — an effort first started under the Biden administration — and is urging allies to strengthen their restrictions after DeepSeek’s rise spooked US investors, according to a report.

The White House recently met with Japanese and Dutch officials to discuss keeping engineers at major chip firms Tokyo Electron Ltd. and ASML Holding NV from maintaining semiconductor gear at production facilities in China, according to Bloomberg.

Trump officials are hoping key allies will match the limits the US has placed on its own companies, including Lam Research Corp., KLA Corp. and Applied Materials Inc., the report said.

There have also been early talks in Washington about placing sanctions on certain Chinese companies, sources told Bloomberg.

Some Trump officials are also discussing stronger restrictions on Nvidia chip exports, some people told Bloomberg. Shares of Nvidia, which reports earnings on Wednesday, were down 1%.

Tokyo Electron shares slid about 4% on Tuesday morning.

Trump’s team did not immediately respond to a request for comment.

With a week left in his term, Biden had proposed new rules to clamp down on chip exports to China.

“If it’s China and not the United States determining the future of AI on the planet, I think that the stakes of that are just profound,” Jake Sullivan, Biden’s national security adviser, said in January. 

Officials made it clear it would be up to Trump to follow through or drop the more restrictive approach, which Sullivan said “shouldn’t be a partisan issue at all.”

Semiconductor giants have argued that stronger restrictions would hamper business and set them behind globally. 

But Chinese firms have seemingly found ways to skirt around the US’ current restrictions, boosting the argument for tougher rules.

US officials are currently investigating whether China-based DeepSeek – which shook the stock market and threatened American dominance in the artificial intelligence race – bought Nvidia chips through third parties in Singapore, Bloomberg earlier reported.

It could take months before the early-stage talks lead to any new regulations. It’s also unclear how allies will respond to the Trump administration compared to Biden.

The Biden administration had secured a handshake agreement with Dutch officials to limit gear maintenance in China. Without regular maintenance, chip-making equipment can quickly lose the ability to produce semiconductors and turn obsolete. 

But the Netherlands pulled back on the curbs after Trump won the election, two senior Biden officials said.

Biden’s team passed on several other priorities to the Trump administration, like a proposal to block Chinese memory chipmaker ChangXin Memory Technologies from buying American tech, according to the report.

Some Trump officials also want tougher restrictions on Semiconductor Manufacturing International Corp., which is smartphone maker Huawei’s main chipmaking partner. Huawei last year overtook Apple’s share of the phone market in China.

The new administration is also tackling an AI diffusion rule imposed during Biden’s final week in office. The export control divided the world into three tiers of countries, setting different maximum export levels for each tier.

Industry giants, including Nvidia, slammed the rule, which they argued showed too much regulatory oversight.