U.S. holds back China tech blacklists amid escalating trade tensions

The Trump administration held off adding China’s DeepSeek, memory chipmaker CXMT and more than 100 other companies to the Commerce Department’s Entity List even after an interagency committee had approved them for blacklisting last year. The Entity List blocks U.S. shipments of goods, software and technology without a license, and approvals are usually hard to obtain.

Semiconductors are strategic devices that are fundamental to industrial and national-security activity and are building blocks for artificial intelligence, communications products, medical devices and weapons. China issued a national semiconductor industrial policy in 2014 with the goal of building a world-leading integrated-circuit supply chain by 2030, while the United States has tightened export controls since 2018 to limit China’s access to advanced chips and related AI applications. Some stakeholders argue easing those controls could increase China’s reliance on U.S. firms; others warn that liberalization could instead help Beijing close its gaps.

Beijing has answered those pressures by targeting U.S. companies tied to critical supply chains. After the Pentagon added major Chinese names including Alibaba, Baidu, BYD and NIO to a military-linked list, China said it was "strongly dissatisfied" and warned that it would retaliate "resolutely and forcefully" if Chinese firms were not treated fairly. The Pentagon’s move means the Defense Department will be barred from contracting directly with listed companies and, from 2027, restricted from buying their products or services through third parties.

China followed with its own export-control action, adding MP Materials, USA Rare Earth and eight other U.S. entities to its list in retaliation for Washington’s restrictions on Chinese firms. MP Materials operates the only active rare earth mine in the United States, and rare earths feed defense, auto and chipmaking supply chains. On June 23, the TOP500 ranking named a Shenzhen supercomputer called LineShine the world’s fastest, the first Chinese machine to top the TOP500 ranking since 2017, and it did so using CPUs only.