US has lifted restrictions on the export of chip design software to China, marking a significant development in ongoing efforts to stabilise bilateral trade relations.
The decision follows recent negotiations between Washington and Beijing, with progress formalised during talks held in London last month.
The restrictions, initially imposed in May 2025, had targeted Electronic Design Automation (EDA) software—critical tools for the development of advanced semiconductors. The US had cited China’s tightening control over rare earth exports as the catalyst for the move, which reignited trade hostilities despite a temporary truce reached in Geneva earlier this year.
The US Commerce Department has now rescinded these export curbs, notifying the three dominant global suppliers of EDA software—Synopsys, Cadence (both American), and Siemens (German)—that they may resume shipments to China. All three companies confirmed the rollback of restrictions and are in the process of restoring access to Chinese clients.
The export control measures had affected approximately 70% of China’s EDA software supply, according to estimates from Chinese state media. Industry analysts had warned that continued denial of access to such tools could have severely hindered the Chinese semiconductor industry’s capacity to design and manufacture advanced chips, with wider implications for sectors reliant on microelectronics, including defence, telecommunications, and artificial intelligence.
Under the latest arrangement, China will allow rare earth exports to the US to resume under its existing licensing regime, following delays and uncertainty after new export controls were introduced in April. In return, the United States has agreed to lift countermeasures that included not only restrictions on EDA software, but also on the export of ethane—a key chemical feedstock for plastics—and jet engine technologies.
A statement from Siemens confirmed that full sales and support services have resumed for Chinese customers. Synopsys acknowledged the rescindment of the earlier Commerce Department letter, noting that it is evaluating the implications of the policy reversal for its financial and operational outlook. Cadence has likewise begun re-establishing service access for its clients in China.
Separately, US authorities have issued similar notices to domestic ethane producers, reversing a previous order that had halted shipments of the gas to China. Ethane exports are a significant component of US-China trade in petrochemicals; nearly half of US ethane exports were destined for China in 2024, based on data from the US Energy Information Administration.
The initial restrictions on EDA software and ethane were introduced following Beijing’s move to implement tighter controls on seven categories of rare earth minerals and associated magnetic components. These materials are critical not only to consumer electronics and renewable energy infrastructure but also to the defence industry. China currently processes over 90% of the world’s rare earth elements.
The restrictions came in spite of a 90-day trade truce agreed in Geneva, which sought to pause retaliatory measures amid broader negotiations. Tensions escalated again when Beijing failed to ease its licensing regime, prompting the Trump administration to implement the software and chemical curbs.
The London meeting appears to have yielded more concrete results. While the precise terms of the agreement have not been published, both sides have taken visible steps toward implementation. China’s Ministry of Commerce has not publicly disputed the US description of the arrangement, and exports of rare earth materials are expected to resume under accelerated review procedures.
However, the broader tariff framework between the two countries remains unchanged. US tariffs on Chinese goods currently stand at an estimated 55%, a figure that includes multiple levies introduced by President Trump over the past year. These include a 10% general “reciprocal” tariff applied to all trade partners in April, and a 20% tariff specifically targeting Chinese imports, justified by Washington on grounds of alleged involvement in the trafficking of illegal fentanyl into the United States.
China has responded with its own duties on US goods, though Beijing has not specified whether these mirror Washington’s most recent measures. According to President Trump, China has agreed to maintain its tariffs on US goods at 10%, although this figure may refer only to recent additions. Neither side has clarified whether earlier retaliatory tariffs will be removed or remain in force beyond the current truce period.
The temporary easing of restrictions is scheduled to last until August, when the 90-day truce agreed in Geneva officially expires. There has been no indication from either side whether the ceasefire will be extended or whether further negotiations will address the structural imbalances and security concerns that have dominated the trade relationship.
While the lifting of EDA software restrictions is a notable concession, especially for the Chinese semiconductor sector, the wider geopolitical and economic context remains complex. Export controls targeting other segments of the semiconductor supply chain—such as advanced lithography machines and high-performance computing components—remain in place. The United States has previously stated that such measures are intended to prevent the transfer of dual-use technologies with military applications.
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