Secretary of State Marco Rubio for Chinese students, Salvo, has pledged to “actively cancel” their visas, but the latest move to raise tensions between the two biggest economies in the world.
Despite a temporary tariff ceasefire reached earlier this month, the division between Washington and Beijing remains wide, ruptured more than recent higher education, artificial intelligence (AI) chips and rare earth minerals.
Despite diplomatic efforts, everything we know about how China-US relations are getting worse.
What did the US and China agree to about tariffs?
US-China trade spat escalated after Trump’s administration raised tariffs on Chinese goods to 145% earlier this year. China retaliated with its own tariffs on US goods 125%.
Under the contract reached on May 12 after two days of trade negotiations in Geneva, tariffs on both sides will fall by 115 percentage points for 90 days, during which time negotiators hope to secure a long-term agreement. For now, the US maintains a 30% tariff on all Chinese products, while Beijing collects 10% on US products.
However, in the weeks since the temporary reprieve, it appears that Washington and Beijing have been limited in discussion.
On Thursday, U.S. Treasury Secretary Scott Bescent told Fox News that trade talks between the US and China are “a bit stuck” and that it may need to be reinvigorated by calls between President Donald Trump and Chinese leader Xi Jinping.
In the meantime, the Trump administration announced new strict visa management for Chinese university students, telling companies to stop selling advanced chip software used to design semiconductors for Chinese groups.
Why is the US targeting Chinese students?
On Wednesday, Rubio announced that the US would “actively cancel” visas for Chinese students studying domestically. He also pledged to step up scrutiny of new visa applicants from China and Hong Kong.
The Trump administration’s decision to implement deportation and revoke student visas is part of a broader effort to fulfill its tough immigration agenda.
China is the second largest country of origin in the United States, after India. Chinese students accounted for about a quarter of all foreign students in the US during the 2023-2024 academic year. There are over 270,000 people in total.
China’s Foreign Ministry criticized the decision to cancel the visa, saying it “damaged” the rights of Chinese students. “The United States has unfairly cancelled visas for Chinese students under the pretext of ideology and national rights,” said Mao Zedong, a spokesman for the Ministry of Foreign Affairs.
The Trump administration also banned Harvard from registering international students on May 22, accusing Harvard of “coordinating with the Chinese Communist Party.” The move was subsequently blocked by a federal judge in the United States.
Still, the majority of Harvard’s foreign students (almost 1,300) are Chinese, and many senior officials, including current leader Xi Jinping, sent their children to Ivy League schools.
How is the US aiming for Chinese semiconductors?
On May 13, shortly after the end of trade negotiations in Geneva, the US Department of Commerce issued guidance warning American companies to prevent the use of Huawei AI semiconductor chips, stating that it was “highly likely that it was developed or produced in violation of US export controls.”
The move marked the latest in a series of efforts by the Trump administration to make China’s ability to develop cutting-edge AI chips into Steamy China’s ability. Small semiconductors powered by AI systems have long been the source of tension between the US and China.
A spokesman for China’s Commerce Ministry last week opposed the guidance, accusing the consensus reached in Geneva of “weakening” and described the measure as “typical unilateral bullying and protectionism.”
Then, on May 28, the US government increased the queue by ordering US companies that used software to design semiconductors to stop selling goods and services to Chinese groups, Financial Times reported.
Design automation software makers such as Cadence, Synopsys and Siemens EDA have been told via letters from the US Department of Commerce to halt the supply of technology to China.
Why is the US targeting Chinese semiconductors?
The US has tightened its semiconductor export controls for more than a decade, claiming that China uses US computer chips to improve military hardware and software.
Chinese officials and industry executives have denied this, claiming that the US is trying to limit China’s economic and technological developments.
In his first term as president, Trump banned China’s Huawei from using advanced US circuit boards.
Huawei is considered a competitor to Nvidia, the US semiconductor giant that produces the “risking” AI chip brand. In April, Washington restricted Nvidia’s AI chip exports to China.
However, Nvidia’s CEO Jensen Huang recently warned that attempts to hamstring Chinese AI technology through export controls have largely failed.
How can China be affected by US measures?
The suspension of semiconductor sales will limit the supply of aerospace equipment needed for China’s commercial aircraft C919.
Former CIA China analyst Christopher Johnson told the Financial Times that this week’s new export controls highlighted “the innate vulnerability of the tariff ceasefire reached in Geneva.”
“The risk of a ceasefire being unlocked, even within a 90-day suspension, is ubiquitous, as both parties want to continue to retain the effectiveness of their respective chokehold abilities,” he added.
Will China facilitate restrictions on rare earth mineral exports?
US officials hoped that the Geneva talks would ease China’s export restrictions on rare earth elements. So far, there have been few signs of this.
Rare earth minerals are a group of valuable minerals needed to manufacture a wide range of products in the defense, healthcare and technology fields.
Rare earth metals, including Scandium and Yttrium, are also key to producing components with capacitors. This is an electrical component that powers AI servers and smartphones.
China will deal with Trump’s “liberation day” tariffs in April, in order to counter Trump’s “liberation day” tariffs, enacting export controls, and alarming US businesses.
For example, last week, Ford temporarily closed its Chicago factory and built a utility vehicle after one of its suppliers ran out of special rare earth magnets.
In most new cars, especially those that enhance vehicles (cars that can “climb” obstacles in vehicles with robotic technology), these high-tech magnets are used in the parts that operate the brakes and steering systems, as well as the power seats and fuel injectors.
Limitations on rare earth mineral supply will provide Beijing with strategic advantages in future negotiations. This is because it can limit the supply of critical technologies in the US industry.