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The Trump administration is considering a plan to curb a dizzying array of software-powered exports to China, from laptops to jet engines, to retaliate against Beijing’s latest round of rare earth export restrictions, according to a US official and three people briefed by US authorities.
While the plan is not the only option on the table, it would make good on Donald Trump’s threat earlier this month to bar “critical software” exports to China by restricting global shipments of items that contain US software or were produced using US software.
On 10 October, Trump said in a social media post that he would impose additional tariffs of 100% on China’s US-bound shipments, along with new export controls on “any and all critical software” by 1 November without further details. To be sure, the measure, details of which are being reported for the first time, may not move forward, the sources said.
But the fact that such controls are being considered shows the Trump administration is weighing a dramatic escalation of its showdown with China, even as some within the US government favor a gentler approach, according to two of the sources. US stock indexes briefly extended losses on the news, with the S&P 500 down 0.8% and the Nasdaq 1.3% lower before paring their losses.
The White House declined to comment. The commerce department, which oversees export controls, did not respond to requests for comment.
A spokesperson for the Chinese embassy did not comment on the specific US measures under consideration but said China opposed the US “imposing unilateral long-arm jurisdiction measures” and vowed to “take resolute measures to protect its legitimate rights and interests” if the US proceeds down what it views as a wrong path.
Administration officials could announce the measure to put pressure on China but stop short of implementing it, one of the sources said. Narrower policy proposals are also being discussed, two of the people said.
“Everything imaginable is made with US software,” one of the sources said, highlighting the broad scope of the proposed action. The sources declined to be named because the matter was not public.
The move could disrupt global trade with China, especially for technology products, and could come at a cost to the US economy if fully implemented.
The measure, if adopted, would echo restrictions that the Biden administration imposed on Moscow after its 2022 invasion of Ukraine. Those rules restricted exports to Russia of items made globally using US technology or software. Trump’s Truth Social post came just three weeks before a previously announced meeting with Xi Jinping, China’s president, in South Korea, and a day after China dramatically expanded its export controls on rare earth elements. China dominates the market for such elements, which are essential to tech manufacturing.
In his post, Trump said China’s action, also effective 1 November, represented “a moral disgrace” that would impose controls on “virtually every product they make”.
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But questions have swirled about what Trump meant in his response by “critical software” controls.
While Trump has slapped a series of tariffs on China since taking office in January, he has wavered in his use of export restrictions against Beijing, first imposing strict new curbs on shipments of Nvidia’s AI chips as well as chip design software to China, and later removing them.
China expressed its opposition to a Trump administration rule last month that restricts US companies from shipping goods and technology to companies at least 50% owned by sanctioned Chinese firms. Chinese imports currently face US tariffs around 55%, which could shoot up to 155% if Trump follows through on his threatened tariff hike. But Trump appeared to soften his posture on Beijing following the threats, posting on 12 October: “The U.S.A. wants to help China, not hurt it!!!”
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Social media platform Reddit sued the artificial intelligence company Perplexity AI and three other entities on Wednesday, alleging their involvement in an “industrial-scale, unlawful” economy to “scrape” the comments of millions of Reddit users for commercial gain.
Reddit’s lawsuit in a New York federal court takes aim at San Francisco-based Perplexity, maker of an AI chatbot and “answer engine” that competes with Google, ChatGPT and others in online search.
Also named in the lawsuit are Lithuanian data-scraping company Oxylabs UAB, a web domain called AWMProxy that Reddit describes as a “former Russian botnet,” and Texas-based startup SerpApi.
It’s the second such lawsuit from Reddit since it sued another major AI company, Anthropic, in June.
But the lawsuit filed Wednesday is different in the way that it confronts not just an AI company but the lesser-known services the AI industry relies on to acquire online writings needed to train AI chatbots.
“Scrapers bypass technological protections to steal data, then sell it to clients hungry for training material. Reddit is a prime target because it’s one of the largest and most dynamic collections of human conversation ever created,” said Ben Lee, Reddit’s chief legal officer, in a statement Wednesday.
Perplexity said it has not yet received the lawsuit but “will always fight vigorously for users’ rights to freely and fairly access public knowledge. Our approach remains principled and responsible as we provide factual answers with accurate AI, and we will not tolerate threats against openness and the public interest.”
Oxylabs and SerpAPI didn’t immediately respond to requests for comment Wednesday. AWMProxy could not immediately be reached for comment.
Reddit compares the companies it is suing to “would-be bank robbers” who can’t get into the bank vault, so they break into the armored truck instead. The lawsuit alleges they are evading Reddit’s own anti-scraping measures while also ”circumventing Google’s controls and scraping Reddit content directly from Google’s search engine results.”
Lee said that because they’re unable to scrape Reddit directly, “they mask their identities, hide their locations, and disguise their web scrapers to steal Reddit content from Google Search. Perplexity is a willing customer of at least one of these scrapers, choosing to buy stolen data rather than enter into a lawful agreement with Reddit itself.”
Much like its lawsuit against Anthropic, maker of the chatbot Claude, Reddit claims that Perplexity has accessed Reddit’s content despite being asked not to do so.
Reddit made a similar argument in its lawsuit against Anthropic. That case was initially filed in California Superior Court but was later moved to federal court and has a hearing scheduled for January.
Along with digitized books and news articles, websites such as Wikipedia and Reddit are deep troves of written materials that can help teach an AI assistant the patterns of human language.
Reddit has previously entered licensing agreements with Google, OpenAI and other companies that are paying to be able to train their AI systems on the public commentary of Reddit’s more than 100 million daily users.
The licensing deals helped the 20-year-old online platform raise money ahead of its Wall Street debut as a publicly traded company last year.
