Trump moves to close chip loophole

President Donald Trump’s administration is preparing measures to close what reports describe as a loophole that has allowed some Chinese artificial intelligence companies to keep accessing advanced American chips despite existing U.S. restrictions. The move would add to a broader Trump push this year to tighten controls on advanced computing exports to China while also threatening wider tariffs on imported semiconductors. The White House has already laid out a tariff framework in a January 14 proclamation, and administration documents in June and August tied chip supply and AI competition more explicitly to national security. ### Which loophole is Washington trying to close? GFdaily reported on September 2 that the administration is preparing measures aimed at a gap that had let some Chinese AI firms retain access to advanced U.S. chips. The report did not appear to describe a final published rule, but it said the effort would tighten an existing export-control regime that has already been revised several times. (whitehouse.gov) The Financial Times said in a film published last month that Chinese companies had been exploiting loopholes in U.S. export controls by remotely accessing restricted chips. That points to a problem U.S. officials and lawmakers have raised before: even when physical shipments are blocked, computing power can still be reached through intermediaries or offshore infrastructure. ### What has Trump already done on chips this year? The White House said on January 14 that Trump had taken action on certain advanced computing chips and warned that he could later impose broader tariffs on semiconductors and derivative products. (gfdaily.com) In a separate presidential proclamation the same day, Trump said imports of semiconductors, chipmaking equipment and derivative products threatened U.S. national security under Section 232 of the Trade Expansion Act. (ft.com) The January proclamation said the Commerce Department had submitted its report on December 22, 2025, and that the United States lacked enough domestic capacity in semiconductors and certain manufacturing equipment to meet demand. Trump said at the time he could consider “significant tariffs” depending on negotiations and other developments. (whitehouse.gov) ### How do tariffs fit with export controls? The White House said in an August fact sheet on polysilicon that Trump was acting to strengthen supply chains and referred back to his January semiconductor proclamation. That August document said the administration viewed semiconductor production and related supply chains as part of the same national-security problem. (whitehouse.gov) A tariff track and an export-control track hit different points in the supply chain. Export controls govern who can receive advanced chips or related technology, while tariffs raise the cost of importing semiconductors and related products into the United States. The White House has said the tariff side is also intended to encourage domestic manufacturing. (whitehouse.gov) ### Why is this focused on AI firms in China? A June 2 Trump executive order on artificial intelligence framed advanced AI as both an innovation priority and a security issue. An April national security memorandum said the U.S. government had information indicating that foreign entities, principally based in China, were conducting large-scale efforts to distill U.S. frontier AI systems. (whitehouse.gov) GFdaily also reported in August that the administration was weighing restrictions on Chinese AI models after fresh attention around Moonshot AI, and another August GFdaily report said lawmakers were urging the administration to close what they described as a Huawei semiconductor loophole. Those reports indicate the chip issue is being handled alongside a wider review of Chinese AI access to U.S. technology. (whitehouse.gov) ### What comes next from here? The Commerce Department is the agency that would typically issue any new export-control rules, licensing changes or enforcement guidance, while the White House would handle any broader tariff decision under Trump’s January 14 proclamation. As of September 2, the public record shows the administration has signaled both tracks, but the specific new anti-loophole measures described in recent reporting had not yet been published in the White House materials reviewed here. (whitehouse.gov) (gfdaily.com)