US advancing comprehensive policy to eliminate China from advanced semiconductor supply chains.
The United States is deploying a series of export control measures designed to exclude China from advanced supply chains, encompassing artificial intelligence data center components, robots, and solar and semiconductor materials. The timing is strategic, aimed at strengthening negotiating leverage before Chinese President Xi Jinping's visit to the US next month.
China has responded with its own restrictions, limiting exports to the US of domestic drone core components and related technologies.
According to Reuters on August 4th, the US Federal Communications Commission is drafting legislation to ban imports of new Chinese-made optical transceivers, with implementation targeted for this year. Optical transceivers transmit and receive data between data centers using light signals. The stated aim is to prevent Chinese companies from stealing data stored in US data centers, installing malicious software, or disrupting services.
Chinese optical communications firm Zhongji Innolight stands to face the heaviest impact. Counterpoint Research identifies Zhongji Innolight as the market leader with a 27% share of the global data transceiver market. The company was also added to the US Department of Defense's list of Chinese military-support enterprises in June 2026.
The Trump administration is simultaneously preparing to introduce both a price floor and tariffs on polysilicon, a critical material for solar panels and semiconductors, aimed at protecting the US domestic industry and countering China's dominance. The US had previously raised tariffs on Chinese-made polysilicon and solar wafers from 25% to 50%, effective January 1, 2025, under Section 301 of the Trade Act.
Trade restrictions against Chinese products have accelerated since late July. On July 28th, the FCC issued an import ban on foreign-made power inverters, humanoids, and quadrupedal walking robots. A 12.5% "forced labor tariff" took effect on July 24th under Section 301. The government is also examining Chinese AI models and considering regulations on their adoption within the US.
Analysts characterize this as an acceleration in efforts to exclude China from advanced industry supply chains. Zhan Kai, a partner attorney at China's Dacheng Law Offices, explained: "The US government is gradually moving from a stage of blocking the transfer of technology to China toward blocking Chinese investment and Chinese companies' access to the US market itself." The impending Xi visit appears to influence timing. US investment bank Jefferies noted that "given China's rare earth export controls that affect the US optical communications industry, the risk of this measure actually being realized is low," characterizing it instead as "a negotiating tactic deployed by the US government ahead of Xi's visit in September."
China has launched a counteroffensive. According to state broadcaster CCTV, the Ministry of Commerce implemented related measures beginning August 5th in response to US regulation of Chinese companies. It decided to strictly review exports to the US of domestic drones, their core components, and related technologies on a case-by-case basis, while eliminating simplified approval procedures. China also suspended post-inspections of factories holding China Compulsory Certification (CCC) that had been delegated to US certification bodies, and banned transactions with US testing firm Compliance Testing. Chinese officials characterized the response as restrained and warned of escalating retaliation should the US implement additional restrictions.