Lax Export Controls for Trade Deal?

The Trump administration has offered to scale back key export controls on advanced technologies as part of a renewed push to secure a comprehensive trade agreement with China, marking a significant shift in the use of national security tools as leverage in trade negotiations.

According to senior administration officials, the proposal includes a phased rollback of selected controls imposed under the Export Administration Regulations (EAR).  

It is not clear if the easing of controls would include those affecting semiconductors, artificial intelligence, and advanced manufacturing equipment, though those are the ones of greatest concern to the Chinese.    

Former Trump official Kelley Ann Shaw, of Akin Gump told Reuters that concessions by the US would be limited and likely not include advanced AI chips and production equipment.

Those restrictions, implemented over the past three years by the Bureau of Industry and Security (BIS), were originally justified on national security grounds, including concerns about military-civil fusion and unauthorized technology transfers to the People’s Liberation Army.  

In return the US will receive more predictable supplies of rare earths and magnets, according to Kevin Hassett, director of the White House Economic Council.  "Immediately after the handshake, any export controls from the US will be eased and the rare earths will be released in volume," Hasset told CNBC.

The offer signals a novel and controversial turn: using export controls—typically considered enduring national security safeguards—as a bargaining chip in economic negotiations.

This may be the first time in modern U.S. trade policy that the Executive Branch has proposed loosening export restrictions of this magnitude as a concession for a trade pact. 

The proposal, which has not been made public in full, reportedly includes conditional waivers or exemptions for certain Chinese entities currently subject to licensing requirements under the Entity List and Military End User List. In return, China would commit to a set of structural reforms, including intellectual property enforcement, market access improvements for U.S. firms, and expanded purchases of U.S. goods.

The move has drawn criticism from some national security officials and bipartisan lawmakers, who warn that using export controls as a transactional tool could undermine their credibility and weaken long-term strategic goals.

Meanwhile, Chinese state media outlets welcomed the potential easing of restrictions, characterizing it as a “step toward restoring rationality” in bilateral relations.

Trade talks between Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnik and US Trade Representative Jamieson Greer and Chinese Vice Premier He Lifeng are taking place in London.

The administration’s offer underscores a broader strategy of economic coercion and strategic flexibility, where tools traditionally used for defense are increasingly repurposed for economic and diplomatic advantage. Analysts say this blurring of lines between national security and trade could define the next era of U.S. economic statecraft.

“Historically, export controls have never been used as leverage for trade negotiations,” Kevin Wolf of Akin Gump told the Wall Street Journal. “There is no precedent for this.”

Trump Gives U.S. Negotiators Room to Lift Export Controls on China