China Issues New Warning Over US Tech War

China may impose sanctions on companies that comply with U.S. restrictions on its homegrown technology, the Chinese government said on Wednesday.

The Chinese Commerce Ministry said in a statement that the latest U.S. industry guidance—warning of possible penalties for American businesses that trade or use Chinese-made integrated circuits—was an “attempt to ban Chinese advanced-computing chips globally.”

The U.S. Commerce and Treasury departments did not respond to an emailed request for comment. The Chinese Embassy in Washington, D.C., told Newsweek it had nothing more to add beyond the ministry’s statement.

Why It Matters

Washington argues that decoupling U.S. and Chinese tech is necessary because American scientific and technological know-how has inadvertently fueled the rapid modernization and expansion of China’s armed forces.

However, in trying to stymie China’s chipmaking industry by making the use of Chinese products more prohibitive for Americans companies, the United States is also threatening a consequential sector for the Chinese economy as well as expected and possibly unexpected future gains in its defense industry.

What To Know

Beijing criticized Washington for specifically targeting Chinese telecoms giant Huawei, a state-linked enterprise that is leading the research, development and production of high-end semiconductors—sophisticated hardware that may decide the race for emerging technologies, including artificial intelligence and quantum computing.

The Chinese Commerce Ministry, which called the U.S. guidance a violation of international trade law, said: “Any organization or individual who implements or assists in the implementation of the U.S. measures will be suspected of violating the Anti-Foreign Sanctions Law of the People’s Republic of China and other laws and regulations, and shall bear corresponding legal responsibilities.”

China’s rubber-stamp parliament passed the anti-sanctions instrument in 2021 to give Beijing the legal means to enact countermeasures against Western firms deemed to have harmed Chinese economic or political interests via their compliance with U.S. sanctions.

Last week, the U.S. Commerce Department’s sanctions-enforcing Bureau of Industry and Security said Huawei‘s chips were likely developed in violation of U.S. export controls and that American businesses using the Chinese tech would also be breaching the sanctions regime.

Although under direct threat from the U.S. restrictions, Huawei is advancing in indigenous chipmaking. Chinese AI firms such as DeepSeek are likely to turn to Huawei’s latest Ascend circuits to power their machine models in the absence of U.S. alternatives, in what is becoming a central part of the tech war and holds national security implications.

What People Are Saying

The Chinese Ministry of Commerce said in a statement issued on Wednesday: “Innovation, development and win-win cooperation are the general trend. China urges the United States to immediately correct its wrong practices, abide by international economic and trade rules and respect the rights of other countries to scientific and technological development.”

What Happens Next

For now, Chinese tech startups reliant on domestic chipmakers may find their supercomputing capabilities limited by current market options, but U.S. industrial policy can only go so far—delaying rather than denying Chinese advances in the technologies of tomorrow.

As wider U.S.-China trade talks continue amid the 90-day truce agreed this month in Geneva, it appears the issue of high technology is quickly becoming a nonnegotiable for both sides.