U.S. Eases Tech and Energy Export Curbs on China as Trade Truce Holds

U.S. Eases Tech and Energy Export Curbs on China as Trade Truce Holds

Washington: In a fresh sign of easing tensions between the U.S. and China, the Biden administration has rolled back key export restrictions, allowing the resumption of sales of chip design software and ethane to Chinese buyers. The move comes amid a fragile but holding trade truce, following intense negotiations and concessions from Beijing on critical raw materials like rare earth elements.

Leading global electronic design automation (EDA) software firms Synopsys, Cadence Design Systems, and Siemens confirmed on Wednesday that they have begun reinstating access to their products for customers in China. These companies, which collectively dominate over 70% of China’s EDA market, were previously restricted from doing business due to heightened U.S. export controls triggered earlier this year.

Additionally, the U.S. government issued notices to ethane producers, revoking a licensing mandate introduced in May and June that had constrained shipments to China. Ethane is a key feedstock for the Chinese petrochemical industry, and the lifting of restrictions is expected to normalize trans-Pacific supply flows.

These actions represent a partial reversal of punitive trade measures implemented by the Trump administration in response to China's abrupt ban on rare earth exports in April a retaliatory strike against U.S. tariffs. The rare earth embargo had disrupted vital supply chains across the global defense, automotive, and semiconductor industries, nearly derailing progress on a broader trade settlement.

According to sources with insight into internal U.S. discussions, the new concessions are part of a broader strategy. "The U.S. imposed broad restrictions not necessarily to maintain them, but to push China to back down on critical exports like rare earths," one official familiar with the talks said on condition of anonymity.

Following high-level consultations, China’s Ministry of Commerce confirmed on Friday that the two countries had agreed on a procedural framework. Under this arrangement, China will vet sensitive export requests more transparently, while Washington will unwind select restrictions in return effectively reestablishing the trade dynamics that existed earlier this year.

Siemens issued a statement confirming that it had resumed sales and technical support in China after receiving formal notice from the U.S. Department of Commerce that restrictions had been lifted. The announcement boosted Siemens’ shares by 1.7% in Thursday’s early trading.

Synopsys, in a letter to staff obtained by Reuters, indicated it would complete system updates and fully restore support for Chinese customers within three business days. Cadence is also expected to follow suit swiftly.

Though the U.S. Commerce Department has not publicly commented on the developments, the rapid restoration of access to EDA tools signals a calculated de-escalation designed to protect strategic interests on both sides.

Without such relief, China’s domestic semiconductor design ecosystem already under pressure from previous U.S. technology curbs risked severe disruption. Analysts note that while China has made strides in chip manufacturing, it still heavily depends on U.S. and Western software for the initial design and simulation stages.

While this move signals a thaw, it remains unclear whether Washington plans to reverse other export denials, including restrictions on GE Aerospace's jet engine shipments for COMAC’s C919 aircraft or curbs on nuclear tech sales to Chinese state-owned power plants.

For now, stakeholders on both sides are cautiously optimistic that further restrictions could be relaxed as long as the current diplomatic equilibrium holds.

As trade ties continue to recalibrate, analysts say that both Beijing and Washington appear to be taking calculated steps to reduce friction without appearing politically weak at home a balancing act that will be tested in the months ahead.


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