The Trump administration is preparing to broaden restrictions on China’s tech sector through new regulations targeting subsidiaries of companies already under US sanctions, reported Bloomberg, citing people familiar with the matter.
This move is seen as part of an ongoing effort to limit China’s technological growth.
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Officials are said to be drafting rules on imposing licensing requirements on transactions involving majority-owned subsidiaries of sanctioned firms.
Some of China’s largest semiconductor companies, including Huawei Technologies and Yangtze Memory Technologies, are already on the US Entity List.
The new proposed rules seek to prevent the Chinese companies from circumventing sanctions by creating new subsidiaries, addressing what US policymakers describe as a persistent issue.
The White House and Commerce Department have not commented on these developments. The proposed rule applies to companies with a 50% ownership threshold on the Entity List, Military End-User list, and Specially Designated Nationals list. It could be announced as early as June, although details and timing are subject to change, reported the media outlet.
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By GlobalDataTensions between the US and China may escalate due to these proposed measures, especially following President Donald Trump’s recent accusations against China regarding negotiations in Geneva.
The US export controls on advanced semiconductors have already strained relations, while China’s restrictions on critical mineral exports have drawn criticism from US officials.
There is speculation that US officials might sanction Changxin Memory Technologies and impose additional curbs on Semiconductor Manufacturing International Corp. Bloomberg News reported that Changxin Memory Technologies has advanced its chipmaking technology despite existing US controls.
Landon Heid, President Trump’s nominee for a senior Commerce Department position, proposed the subsidiary rule during his confirmation hearing in April. The House Foreign Affairs Committee also recommended this approach in a report from 2023, citing the need for reform in the use of the Entity List.
In May 2025, Bloomberg reported, citing sources that the US government is moving to restrict the sale of chip design software to China.
