Red flags raised as Trump throttles US tech curbs on China for rare earth gains

The White House has reportedly stopped several security actions targeting Chinese tech firms just weeks before President Donald Trump visits Beijing in April.

The move affects planned restrictions on China Telecom, TP-Link routers, and Chinese equipment in American data centers, as four unnamed officials familiar with the decisions told Reuters.

The decision follows a pattern that started last year. In December 2025, the Trump administration reversed Biden-era limits on Nvidia H200 chip sales to China, instead creating a 25% revenue-sharing arrangement with the U.S. government.

Then in January 2026, the controversial TikTok deal closed with ByteDance keeping 19.9% ownership and control over the app’s core algorithm.

Now comes another retreat. The government has put on hold bans affecting China Unicom and China Mobile’s internet services in America. Restrictions on Chinese-made electric trucks and buses are also paused. These measures were designed to stop Beijing from accessing sensitive American information and prevent sabotage of critical infrastructure, two sources explained.

The reason appears clear: rare earth minerals. China imposed tough export controls on these materials in October 2025, threatening tech manufacturing worldwide.

During a trade meeting between Trump and Chinese President Xi Jinping that same month, Beijing agreed to delay a second wave of restrictions until November 2026. America needs these minerals badly. Without them, everything from smartphones to fighter jets stops getting built.

“At a moment when we are desperately trying to remove ourselves from Beijing’s leverage over rare-earth supply chains, it is ironic that we’re actually letting Beijing acquire new areas of leverage over the U.S. economy, in telecoms infrastructure, in data centers and AI, and EVs,” said Matt Pottinger, who worked as deputy national security advisor during Trump’s first term.

The Commerce Department says it continues using its powers to “address national security risks from foreign technology.”

But inside the agency, instructions changed after the October trade deal. Staff members responsible for watching foreign tech threats were told to “focus on Iran and Russia” instead, two sources revealed. Last month, the department removed the woman leading that office. Her replacement, Katelyn Christ, might bring back some measures if the April summit goes poorly, one source suggested.

Trump’s recent Truth Social post reveals the complete transformation in his approach to China. “The relationship with China, and my personal relationship with President Xi, is an extremely good one, and we both realize how important it is to keep it that way,” he wrote, adding that he believed “there will be many positive results achieved over the next three years of my Presidency” with Xi.

This stands in stark contrast to his furious October post, when China first announced rare earth export controls. Back then, Trump threatened “massive” tariffs and called China’s actions “hostile,” even suggesting he might cancel his planned meeting with Xi.

But just months later, after China agreed to delay the second wave of rare earth restrictions, Trump’s tone shifted entirely.

House Foreign Affairs Committee Chairman Brian Mast held hearings in January 2026 about the H200 chip sales, introducing the “AI Overwatch Act” to require congressional review of such deals. Pottinger called the chip policy “a mistake that needs reversing” and said it “signals weakness.”

American data centers are growing fast. Real estate firm Jones Lang LaSalle expects U.S. data center capacity to jump 120% by 2030. David Feith, who served in both Trump administrations, warns that Chinese hardware in these facilities creates major security problems.

American data centers could become “remotely controlled islands of Chinese digital sovereignty,” he said, as the country builds “strategic vulnerabilities into our AI and energy backbone.”

April summit holds the key

TP-Link, which split from its Chinese parent company in 2024, insists it operates as an independent American business. The California company says its software is managed in the U.S., data stays on U.S. servers, and security follows American standards.

“Any suggestion that we are subject to foreign control or pose a national security risk is categorically false,” the company stated.

Trump plans to visit Beijing in April and has invited Xi to visit America later this year.

Wendy Cutler, formerly with the U.S. trade office and now at the Asia Society Policy Institute, said the administration clearly wants “stabilization” with China. The Chinese government has made it clear that it means stopping export controls and tech restrictions, she explained.

With Trump’s Beijing visit approaching, “I would not expect the issuance of more controls,” Cutler said, pointing to China’s threat of cutting off rare-earth exports. “Not only does it have leverage, it is willing to use it. It ties the president’s hands.”

If April talks go well, these measures might stay shelved indefinitely. The Department of Defense already invested $400 million in MP Materials to reduce dependence on Chinese rare earths, suggesting some officials see the vulnerability.

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