On Wednesday, China issued a stern warning to American companies, saying they could face legal consequences if they comply with new U.S. guidance targeting Chinese-made technology, escalating tensions in the ongoing tech war between Washington and Beijing, Newsweek reported.
China's Ministry of Commerce denounced new U.S. industry guidance threatening penalties against American businesses trading or using Chinese integrated circuits, calling it an "attempt to ban Chinese advanced-computing chips globally."
The ministry said companies that assist in implementing the U.S. measures could be prosecuted under Chinese law, including the Anti-Foreign Sanctions Law passed in 2021. That legislation gives Beijing broad authority to retaliate against foreign firms that have harmed China's political or economic interests.
"Any organization or individual who implements or assists in the implementation of the U.S. measures will be suspected of violating the Anti-Foreign Sanctions Law of the People's Republic of China and other laws and regulations and shall bear corresponding legal responsibilities," the Chinese Commerce Ministry said in its statement.
The warning follows a recent announcement by the U.S. Commerce Department's Bureau of Industry and Security that Chinese telecom giant Huawei may have developed advanced chips violating U.S. export controls. The bureau warned that American firms using these chips could also be in breach of U.S. sanctions.
Huawei, a state-linked enterprise, remains a central focus of U.S. efforts to restrict Chinese technological development. The company leads China's development of high-end semiconductors — hardware critical to emerging technologies such as artificial intelligence and quantum computing.
Washington has defended its actions by citing national security concerns. U.S. officials say the measures are necessary to prevent American technological expertise from supporting the rapid modernization of China's military.
However, China argues that these efforts undermine international trade law and hinder scientific and technological progress. The Chinese Ministry of Commerce urged the United States to reverse course.
"Innovation, development, and win-win cooperation are the general trend," the ministry said. "China urges the United States to immediately correct its wrong practices, abide by international economic and trade rules, and respect the rights of other countries to scientific and technological development."
The impact of the tech standoff is already reshaping the global semiconductor landscape. With U.S. technology becoming less accessible, Chinese AI firms such as DeepSeek are expected to shift to domestically produced chips, including Huawei's new Ascend series, to power their models.
Though Chinese startups may face short-term limitations in supercomputing performance, experts note that current U.S. industrial policy may only delay — rather than halt — China's progress in developing next-generation technologies.
The latest warning from Beijing comes as broader U.S.-China trade negotiations continue during the 90-day truce agreed upon in Geneva earlier this month.
The tech dispute is rapidly emerging as a key sticking point, with both sides treating it as a non-negotiable issue in future economic relations.
Jim Thomas ✉
Jim Thomas is a writer based in Indiana. He holds a bachelor's degree in Political Science, a law degree from U.I.C. Law School, and has practiced law for more than 20 years.
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