Convicted felon Donald Trump has been trying to claim victory in his ongoing trade tantrum with China, but look past the bravado and it’s clear that Chinese Premier Xi Jinping played the president—again. Even worse, it looks like Trump just surrendered some of the United States’ most advanced technology to our largest adversary for a literal hill of beans.
Trump’s new Chinese trade deal would see the U.S. selling its most advanced Blackwell artificial intelligence chips to China in exchange for a Chinese commitment to resume the country’s purchases of American soybeans, which ground to a halt during the latest trade unrest. Cybersecurity experts and U.S. business leaders now warn that giving China easy access to AI technology will make it even harder for American companies to compete in global markets while making it easier for Chinese operatives to compromise national security. “The defining fight of the 21st century will be who controls artificial intelligence,” Delaware Sen. Chris Coons told CNN. “It would be a tragic mistake for President Trump, in order to get some soybean orders out of China, to sell them these critical cutting-edge AI chips.”
Trump’s short-sighted soybean deal is just the most visible part of a trade deal that appears to benefit China on nearly every front. As The New York Times notes, Xi’s scheme to block American access to Chinese rare earth metals worked perfectly, bringing U.S. negotiators to the table without China actually needing to offer anything new. Xi’s team effectively offered Trump the chance to return to a deal the two nations already had in place, while American negotiators offered up a host of new concessions that will allow Xi to expand China’s growing tech dominance.
In addition to giving China access to the world’s most advanced AI chips, Trump also announced he would cut his more recent 20% tariff on Chinese goods by half, while also agreeing to remove export limits on key Chinese products. Those penalties were put in place earlier this year in an effort to stop the flow of fentanyl from Chinese ports, a fight Trump is now abandoning after only a few short months. It was a stinging defeat for a president who absolutely hates losing.
The changing power dynamic was visible in Trump’s new and weaker language about Chinese fentanyl. Just months after threatening to shut down all trade with China unless they immediately halted the flow of fentanyl, Trump now seemed to acknowledge that it was China—not the United States—setting the terms of the negotiation. “I believe that they’re going to help us with the fentanyl situation,” Trump told reporters. “They’re going to be doing what they can do.”
Trump’s sudden backtracking on everything from technology security to drug trafficking stunned Jeremy Mark, a nonresident senior fellow at the nonpartisan Atlantic Council. “However the White House chooses to portray the agreement in the coming weeks, there is no avoiding the fact that Beijing has tremendous advantages in the ongoing negotiations,” Mark recently wrote.
So why did Trump fold so quickly on an issue as important to American national security as controlling the flow of highly advanced AI technology to foreign powers? One word: Nvidia.
America’s first $5 trillion company has been pressuring Trump for months to loosen trade controls around its extremely profitable high-end chips, and Nvidia CEO Jensen Huang sees China as a massive opportunity to continue his company’s explosive growth. Nvidia’s sales in China recently fell to zero as a result of Trump’s ongoing trade spat, and Huang is desperate to get Nvidia back into the booming Chinese chip market. Pressuring the White House to cut a trade deal would be great for the tech giant.
Earlier this year, Huang announced that Nvidia was working directly with the White House on a new computer chip designed for sale in China. Now Nvidia is on the verge of getting even more than it asked for, including the opportunity to sell advanced technology to the Chinese military. It pays—trillions of dollars, it turns out—to have a friend in the Oval Office.
Huang recently downplayed the risk of arming the Chinese military with top-tier American chips, claiming it was “in the best interest of America to serve the Chinese market.” National security experts disagree, pointing to China’s long history of cyber-espionage and its attempts to crack the security architecture that protects critical U.S. military secrets. Nvidia (and Huang) will likely emerge from Trump’s deal richer than ever, even if American national security suffers as a result.
In the end, Trump’s concessions to Xi were seen as inevitable to anyone who remembers the last time Trump’s incompetence handed China an easy victory back in September. Then, Xi’s negotiators outflanked their American counterparts by buying Argentine soybeans in an effort to hurt American farmers and force Trump’s hand. Now, China happily bought American soybeans with a hefty side dish of trade concessions and top-shelf technology. Xi is busy turning American soy into a new technological revolution for Chinese businesses while Trump and his feckless negotiators still think they walked away as winners.
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