U.S. Weighs Sweeping Curbs on Software Exports to China Amid Rare Earth Dispute

The Trump administration is considering a sweeping new set of export restrictions targeting China’s access to U.S. software, in retaliation for Beijing’s tightening of rare earth shipments. The plan, discussed by senior officials and confirmed by multiple sources, could block exports of products ranging from laptops to jet engines that rely on U.S.-made or U.S.-designed software.

The proposal, which mirrors export controls once imposed on Russia, is part of a broader strategy to pressure China ahead of President Trump’s meeting with President Xi Jinping in South Korea later this month. While the plan remains under discussion and may not be implemented, U.S. Treasury Secretary Scott Bessent said “everything is on the table,” including coordinated measures with G7 allies.

Analysts warned the move could have far-reaching global implications, disrupting supply chains and triggering economic retaliation from Beijing. Emily Kilcrease, a former U.S. trade official, said software restrictions would be “extraordinarily difficult to implement” and could backfire on American industry.

The Chinese embassy condemned Washington’s potential actions as “unilateral and coercive,” vowing to protect China’s interests if the U.S. proceeds. U.S. markets reacted nervously to the report, with the S&P 500 closing down 0.5% and the Nasdaq falling about 1%.