Just weeks after the U.S. and China agreed to a 90-day tariff truce, the Trump administration delivered two major setbacks. First, new export controls threatened to revoke visas for Chinese students studying semiconductor design software and other critical fields. These actions dashed any hopes for a de-escalation in tensions.
This sudden growth has ruled the possibility of a fully developed trade war, analysts warned that the delicate American-China trade deal may fall before the 90-day window ends.
In this blog, we break down the latest developments, their economic impact, and what this means for global supply chains, tech competition, and US-China relations.
The Truce That Didn’t Last
In early May 2025, the US and China announced a temporary tariff reduction, lowering reciprocal duties from 125% to 10% for 90 days while maintaining a 30% baseline tariff on Chinese goods. The deal was seen as a diplomatic win for Beijing, easing pressure on Chinese exporters and stabilizing markets.
But the optimism was short-lived.
Bombshell #1: US Cuts Off China from Chip Design Software
On May 28, reports revealed that the Trump administration had quietly imposed new export controls on semiconductor design software, effectively blocking US companies from selling critical tools to China.
Why This Matters:
- Semiconductors are the foundation of modern technology, driving everything from smartphones to artificial intelligence.
- China has spent billions to become self-sufficient but still relies on US software.
- The move could cripple China’s chip industry, delaying its technological independence.
Beijing responded with outrage, accusing the U.S. of “overextending national security” as a means to hinder China’s rise.
Bombshell #2: Mass Visa Revocations for Chinese Students
Hours later, US Secretary of State Marco Rubio announced a crackdown on Chinese student visas, targeting those in STEM fields or with alleged ties to the Chinese Communist Party.
The Fallout:
- Over 270,000 Chinese students study in the US, many in tech and engineering.
- Families spend years saving for US education—now their investments are at risk.
- China warned of “serious consequences”, framing the move as discriminatory.
Experts warn this strategy could backfire, encouraging top Chinese talent to remain in the country and speeding up China’s domestic innovation efforts.
What’s Next for US-China Relations?
- Trade War Escalation?
- The 90-day truce is fragile, and these moves could derail negotiations.
- If talks fail, tariffs could jump back to 34% in August.
- Tech Decoupling Accelerates
- China may retaliate with export bans on rare earth minerals or other key materials.
- US tech firms like Apple are already shifting supply chains out of China.
- Global Market Volatility
- Stocks initially rallied after the tariff truce but may now face new uncertainty.
Conclusion: A New Cold War in Trade & Tech?
The Trump administration’s latest moves signal a hardline stance against China, prioritizing national security over economic stability. For Beijing, the message is unmistakable: the U.S. has no intention of backing down.
As the 90-day clock ticks, businesses and investors should brace for more turbulence in US-China relations.
Keywords:
- US-China trade war 2025
- Trump tariffs on China
- China semiconductor ban
- Chinese student visa crackdown
- US-China tech war
- Global supply chain risks
