The Trump administration has expanded its national security trade restrictions to include subsidiaries of Chinese companies already on the Commerce Department’s entity list.
The rule is designed to prevent companies from bypassing U.S. sanctions by operating through subsidiaries or affiliates, strengthening protection for American technology and strategic interests.
Under the new policy, if a listed company holds a majority stake in another firm, that business will also face trade restrictions, according to the Wall Street Journal.
The rule, posted in the Federal Register on Monday, takes effect Tuesday.
The administration’s move is focused on preventing the unauthorized transfer of artificial intelligence programming to China.
Officials say the measure is intended to safeguard U.S. national security and foreign-policy interests by ensuring that sensitive technology and material are not indirectly transferred to foreign entities that could pose a risk.
While the move primarily targets Chinese tech firms, it may also affect U.S. companies that rely on Chinese partners for components or raw materials, requiring increased compliance and review of supply chains. Trading in key sectors such as semiconductors could be affected.
The administration’s focus on controlling the transfer of advanced technology, including AI, reflects growing concerns over the global tech competition with China. Companies seeking to maintain business with listed firms can apply for licenses, and temporary general licenses will allow 60 days for adjustment.
National security officials have pushed for these measures as part of broader efforts to protect American innovation and strategic assets, emphasizing the need for a consistent approach to U.S.-China trade and technology policy.
The National Security Agency has opened a growing department, the AI Security Center, aimed at protecting AI programming developed and being applied in the U.S. from being transferred anywhere without strict controls in place.
© 2025 Newsmax. All rights reserved.
