As trade war truce with China holds, US lifts curbs for chip design software and ethane

 

The United States has lifted export restrictions for chip design software and ethane producers in a major move that signals easing trade tensions with China. The curbs were originally part of a broader US strategy in response to China’s export suspension of rare earth elements and magnets, which disrupted global supply chains for sectors such as semiconductors, aerospace, and automotive manufacturing. Now, leading Electronic Design Automation (EDA) software firmsSynopsys, Cadence Design Systems, and Siemensare restoring access for Chinese clients. These companies collectively control over 70 percent of China’s EDA market, making their tools crucial to China's chip design industry. Long-term restrictions would have severely affected China's technological development in semiconductors. Siemens confirmed it has resumed software support and sales in China after receiving clearance from the US Commerce Department. Synopsys informed staff that access would be fully restored within three business days. The decision to lift ethane export curbs was also communicated by the US to American producers, rolling back a licensing requirement put in place just weeks ago. The moves mark a deliberate step back by the US, seen as part of a broader effort to reduce trade conflict. Talks between US and Chinese officials recently resulted in a framework agreement where China would evaluate export license requests while the US would unwind its retaliatory measures.

This easing of restrictions follows an agreement between US and Chinese officials aimed at stabilizing bilateral trade. China had imposed rare earth export controls in retaliation for earlier US tariffs, threatening the production lines of US defense and tech industries. These rare earth materials are vital for the creation of high-tech components including missiles, smartphones, and electric vehicles. The Trump administration responded with export curbs on various sectors including chip software and ethanea strategy reportedly meant to pressure Beijing into backing down on its rare earth ban. The US now appears to be lifting some of those retaliatory measures as China agrees to review export requests rather than blanket bans. A source close to US trade policy commented that the US “escalated to de-escalate,” using broad restrictions as leverage to get China to the negotiating table. Now that a framework is in place, both sides are gradually rolling back restrictions, heading toward the status quo seen earlier in 2024. Still unclear is whether other curbs, like suspensions of licenses for GE Aerospace jet engines and nuclear technology exports, have also been lifted. The US Commerce Department has not provided official comment. However, market reaction has been swift: Siemens saw its stock rise following the announcement. While fragile, the current trade truce signals a positive turn in US-China relations, particularly for industries dependent on high-tech exports. Observers believe further easing could follow if both sides remain committed to the agreement.

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