Washington has rolled back some export restrictions on key technologies and raw materials to China, signaling a possible softening of trade tensions
Getty Images / Jonas Roosens
The United States has rolled back export restrictions on key technologies and raw materials to China, signaling a possible softening in trade tensions between the two global powers. The changes affect developers of chip design software and ethane producers and come amid concessions from Beijing over rare earth elements.
Two of the largest providers of electronic design automation (EDA) software — Synopsys $SNPS and Siemens — announced on Wednesday that they are once again able to provide their products and services to clients in China, citing notices from the U.S. Department of Commerce lifting the previous controls. Cadence $CDNS Design Systems reportedly also received the notice, according to Reuters.
Siemens said it has already resumed sales and support for Chinese customers. Meanwhile, Synopsys expects to restore full access to Chinese clients within three working days, according to an internal memo seen by Reuters.
Shares in Siemens, Synopsys, and Cadence were up 1.5%, 3%, and 3.5%, as of Thursday morning EST.
Without the policy reversal, limits on EDA tools could have severely hindered China’s ability to design chips. Synopsys, Cadence, and Siemens dominate over 70% of China’s EDA software market, according to Chinese state news agency Xinhua.
In a separate move earlier that day, Washington informed U.S. ethane exporters that it was walking back licensing requirements for shipments to China, which had been introduced in late May and June.
Those restrictions were part of a broader response by the Trump administration, following China’s decision in April to curb exports of rare earth elements and related materials. Such materials are vital to U.S. automotive manufacturing, defense, and electronics industries. That step by Beijing was in response to President Donald Trump’s sweeping tariffs on Chinese imports, which had disrupted supply chains and cast doubt over the future of trade negotiations between the two countries.
But last Friday, China’s Ministry of Commerce said that after bilateral discussions, both sides had agreed on a new structure for managing sensitive exports like ethane. Under the arrangement, China will assess applications to export controlled goods, while the U.S. will ease corresponding limitations.
"The U.S. imposed sweeping restrictions to pressure China into easing up on rare earths. Now, with that goal achieved, they're rolling things back,” Reuters reported, citing a source close to the matter.
The unnamed source reportedly said more trade barriers are set to be lifted as part of the newly established framework, effectively restoring trade policies between the two countries to where things stood prior to “liberation day” on April 2. In the weeks that followed, a tit-for-tat trade war ensued, which saw Trump hiking levies on Chinese imports to highs of 145%. Now, average U.S. tariffs on Chinese exports stand at around 50%, covering all goods, while China's average tariffs on U.S. exports hovers just over 30% percent.
It remains unclear which other U.S. trade restrictions are also on the cusp of reversal. A possible contender: a rule suspending of export licenses for GE Aerospace to supply jet engines for China's C919 airliner, as well as for companies selling nuclear technology to Chinese power facilities.
Join 500,000+ readers who start their day with Quartz.
By subscribing, you agree to our Terms of Service and Privacy Policy.
