Rising toll of US-China trade, tech curbs in focus ahead of Xi-Trump summit

With President Xi Jinping expected to meet US President Donald Trump in Washington this week, attention is again turning to the tit-for-tat trade and technology restrictions between the two nations – a friction that continues to escalate despite occasional reprieves. Over the past year, tech firms and industrial manufacturers on both sides have been casualties of the ever-intensifying rivalry, even as some benefit from growing state support to cushion the blow. From lost sales and squeezed margins to supply-chain disruptions and rising competition, this piece breaks down how the restrictions are affecting companies in the world’s two largest economies, drawing on earnings reports from 18 listed firms. 1. Direct financial hits Many of the firms reported direct financial impacts from US-China restrictions, including lost revenue, lower profits, cancelled orders and substantial inventory writedowns. US chipmaker Nvidia, for example, recorded a US$400 million charge in the first half of its financial year 2027, which ended in July, for excess inventory and purchase obligations related to the H200 graphics chip. The charge came despite Washington granting licences for limited H200 shipments to China, as Beijing also reportedly imposed restrictions on the chip’s sale and import. “We have been unable to sell all the products for which we have licences,” the company said in its August filing. In China, auto-parts maker Bohai Automotive Systems swung to a net loss of 3.09 million yuan (US$460,630) in the first half of this year, from a profit of 301.5 million yuan a year earlier. In its half-year report published last month, the company said one of its subsidiaries, which is subject to US tariffs on auto parts and raw materials including aluminium, reported lower orders and revenue because of “US-China trade tensions”. Smart-furniture makers MotoMotion and Haier Smart Home also reported double-digit declines in first-half profits, citing higher tariffs that added to pressure on operating costs and profitability. 2. Losing ground to rivals US semiconductor equipment makers Applied Materials and Lam Research both said in their August filings that export restrictions on China had limited the market for some of their products and services while increasing competitive pressure from rivals. “There can be no assurance that we will continue to compete successfully in the future,” read Lam Research’s report. While the US revoked Qualcomm’s licence to sell 4G and certain integrated circuit products to Huawei Technologies in 2024, the US chipmaker continued to say it did not expect any revenue from the Chinese firm in its latest quarterly report in July. It also warned that Huawei’s growing share of China’s smartphone market could further weigh on its operations and cash flow. Meanwhile, server maker Super Micro Computer highlighted the escalating operational challenges of navigating US trade curbs on advanced processors. “Compliance with ever-changing regulations is complex and time-consuming,” the company said in its annual filing for the financial year ended June 30. It cautioned that licensing delays and compliance burdens could make technical support “more cumbersome”, ultimately encouraging customers to seek alternatives from competitors. 3. Supply chain risks Chinese chipmaker Semiconductor Manufacturing International Corporation (SMIC), which has been on the US Entity List since 2020, said in its latest half-year report that the list’s trade restrictions had created challenges for supply chain security and business stability. Some of its affiliates were also added to the list in 2024. The company warned in the report published earlier this month that tighter restrictions could further limit its access to equipment, materials, software and services needed for production. Similarly, ACM Research Shanghai, a wafer fabrication equipment manufacturer, was placed on the list in 2024 along with some of its subsidiaries. In its latest half-year report published in August, it warned that its suppliers must obtain US export licences before selling certain US-controlled items to the company, meaning any licence denials could constrain its ability to procure them. For some US companies, the risk increasingly runs through China’s tightening control over certain critical materials such as rare earth elements. China accounts for about 60 per cent of global rare earth mining and nearly 90 per cent of processing, according to the Washington-based Centre for Strategic and International Studies. Applied Materials flagged supply-chain risks tied to Chinese government restrictions on the export of rare earth minerals last year. Lumentum, an American manufacturer of optical and photonic products, said that China’s export controls on rare earths and other critical minerals had constrained its access to these materials, threatening to inhibit its ability to sell products or purchase necessary equipment and supplies. 4. Greater regulatory uncertainty KLA, a US semiconductor-equipment supplier, said some products destined for China had recently been held by US Customs and Border Protection because of questions over customers or product capabilities, creating the risk of shipment delays or cancellations that could further affect its financial condition and operations, according to its annual report for the financial year ended June 30. US chipmaker Marvell also said it had faced delays or denials in obtaining licences to ship some products to China, with no guarantee that future requests would be approved. Chinese buyers accounted for 42 per cent of the company’s total net revenue in the quarter ended August 1. Qualcomm said if US-China relations remain strained, “our ability to consummate any transaction that would require approval … in China may be severely impacted”, while completed acquisitions could face government reviews, fines or forced divestitures. Several companies also warned that restrictions could trigger countermeasures from the other side. US chipmaker AMD said complying with US restrictions could expose the company and its affiliates to Chinese countermeasures, leading to restrictions on its operations and transactions in China, supply-chain disruptions and reputational harm, any of which could materially affect its business, operating results and financial condition. Nvidia has likewise warned that tighter US export controls could provoke responses from foreign governments, including China, that disrupt its supply chain or its ability to serve customers worldwide.

Rising toll of US-China trade, tech curbs in focus ahead of Xi-Trump summit

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.css-1mniedq{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;}1. Direct financial hits

Impacts of reciprocal restrictions eroding profits, disrupting supply chains and intensifying market competition are back in the spotlight

1. Direct financial hits