US-China rivalry widens

The White House has opened a new front with China, accusing China-based actors of stealing U.S. artificial intelligence know-how on an “industrial scale.” (usnews.com) In a memo released April 23, White House science adviser Michael Kratsios said China-based groups used “tens of thousands” of proxy accounts and jailbreaking techniques to distill U.S. frontier AI systems. China’s embassy in Washington called the allegations “baseless,” and China’s foreign ministry said the U.S. should “abandon biases.” (usnews.com) Distillation is a shortcut for building a smaller model from the output of a larger one, which can cut computing costs and speed development. Kratsios said the administration will share threat information with U.S. AI companies and “explore a range of measures” against the foreign actors it blames. (cnbc.com) The fight lands on top of an older tariff war that never really ended. The Office of the United States Trade Representative still lists active Section 301 cases on China’s forced technology transfer, semiconductors and Phase One trade commitments. (ustr.gov) Chip policy is already moving in the same direction. A presidential proclamation published January 20 said imported semiconductors and chipmaking equipment threaten U.S. national security because the country remains dependent on foreign supply for products used in broadband networks, missiles, drones and other critical systems. (federalregister.gov) That matters for companies waiting on China rules, including Nvidia. Reuters reported this week that the administration approved Nvidia AI chip sales to China in January with conditions, but Commerce Secretary Howard Lutnick said on April 22 that no shipments had yet been made. (usnews.com) U.S. tariff policy is also spilling into allied trade planning. A House of Commons Library briefing published April 14 said U.S. tariffs have pushed the British government to reassess trade strategy, while a 25% U.S. tariff on steel, aluminium and derivative goods remains one of the most important measures for UK industry. (commonslibrary.parliament.uk) Canada is preparing for the same pressure through the North American trade pact review. Prime Minister Mark Carney announced a 24-member Canada-U.S. economic advisory committee on April 21, and his office said the first meeting will be April 27, ahead of the Canada-United States-Mexico Agreement review due by July 1. (usnews.com) For now, Washington is tying tariffs, chips and AI into one argument: the same supply chains that power chatbots also power weapons systems and telecom networks. The next test is whether that argument turns into new export limits, new tariffs or both before the next U.S.-China leader summit. (federalregister.gov, usnews.com)