Trump considering China export ban on items made with or containing U.S. software — sweeping restriction to hit hard in response to Beijing’s rare earth embargo in major trade war escalation

The White House is considering banning exports to China of all items that were made with or contain U.S.-made software in response to China’s announcement of rare earth export controls. According to Reuters, this isn’t the only plan the Trump administration is considering, but if implemented, it would follow through on the president’s threat of a 100% tariff and a ban on critical software as a response to Beijing’s perceived escalation. Although there is no final decision yet on whether Washington will push through with this comprehensive ban, it could heighten the ongoing trade war between the two rivals, especially as almost everything — from consumer devices to industrial equipment — is made with or contains American software.

“I will confirm that everything is on the table,” U.S. Treasury Secretary Scott Bessent said in a statement to reporters. “If these export controls — whether it’s software, engines, or other things — happen, it will likely be in coordination with our G7 allies.” However, other government officials favor a less drastic approach, especially as implementing a complete software ban would be incredibly difficult. Former trade official Emily Kilcrease said that such a move could also lead to unintended consequences for U.S. industry. “You would hope they are only putting threats on the table that they would carry out and stick with,” Kilcrease said to Reuters.

The U.S. has previously implemented an EDA software ban on China, hitting several Chinese tech companies like Xiaomi and Lenovo hard, as they can no longer design chips for manufacturing at external fabs like TSMC. The White House lifted the restriction about a month later in return for rare earth concessions, so it's likely trying the same playbook again, but with expanded coverage.

Instead of just focusing on chip-making software, a comprehensive software ban could essentially grind global trade with China to a halt. After all, it not only covers machinery and industrial equipment, but it also includes popular consumer-facing operating systems, including Android, iOS, macOS, and Windows.

China is slowly releasing its own homegrown software, like the Huawei-backed UBIOS standard, Huawei’s own HarmonyOS, which started on mobile phones and is now being deployed on its laptops, and the open source openKylin OS. However, U.S.-made operating systems like Windows and Android still dominate the market in the country. So, if President Donald Trump pushes through with a total software ban, China will be left scrambling to find a replacement for both general-use and specialized software, putting it on the back foot in the short term.

However, doing so will also accelerate China’s own homegrown software development. While Beijing already recognizes the disadvantage of relying on technological imports, the easy availability of foreign tech makes local advancements slower and often requires state intervention.

If Chinese tech companies lose easy access to Western technologies and products made using them, they would have no choice but to make their own to survive. And while the U.S. would still have global dominance in the meantime, there is no short supply of talent in China, and they could eventually create their own standard in the future that could challenge and even unseat Washington as the world's technological leader.

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