Trade thaw: US eases curbs on chip software, ethane exports to China

The US initially imposed sanctions in response to China’s rare earth export suspension, disrupting key industries, but sources indicate these curbs were strategic and temporary, aiming to pressure Beijing, with broader easing expected under the current trade framework agreement

In a notable shift toward easing bilateral trade tensions, the United States has lifted recent export restrictions on China affecting electronic design automation (EDA) software and ethane shipments. This move comes as both nations signal a willingness to cooperate following months of economic strain.

Three major EDA software providers—Synopsys, Cadence Design Systems, and Siemens—confirmed on July 2 that they are resuming services and support for customers in China. Siemens stated it had restarted sales and technical assistance after receiving formal notification from the US Department of Commerce that previous restrictions were no longer applicable. Synopsys, in an internal memo, noted that access for Chinese clients would be fully restored within three business days.

In a parallel development, the US government also notified American ethane producers that it is rescinding a recently imposed licensing requirement for exports to China. These restrictions, initially introduced in May and June, were part of a broader set of countermeasures that originated during the Trump administration.

Strategic retaliation spurs trade reset

The initial US sanctions were seen as a response to Beijing’s April suspension of rare earth and magnet exports, a critical move that disrupted global supply chains across industries including aerospace, semiconductors, and automotive manufacturing. That retaliation followed earlier US tariffs imposed on Chinese goods, threatening to derail ongoing trade negotiations.

According to reports citing sources familiar with internal US discussions, Washington’s strategy involved expanding export curbs temporarily to pressure Beijing into reversing its rare earth policies. The same sources suggest that as long as both parties adhere to the current framework agreement, a broader rollback of restrictions can be expected, potentially returning to pre-tension levels seen earlier in the year.

China’s Ministry of Commerce confirmed that both sides had reached a mutual understanding. Under the new framework, China will conduct reviews of export applications for sensitive materials, while the US will lift corresponding restrictions on related sectors.

Key restrictions still under review

Though the current rollback is seen as a positive signal, questions remain regarding the status of other US-imposed curbs. These include halted licenses for GE Aerospace to supply engines for China’s COMAC C919 aircraft and restrictions on nuclear technology exports.

Analysts note that long-term access to EDA tools is crucial for China's semiconductor ambitions. Together, Synopsys, Cadence, and Siemens control over 70% of the Chinese EDA market, according to official Chinese sources.

The developments mark a tentative step toward stabilizing one of the world’s most consequential trade relationships.