US Considers Software Curbs on China, White House Says

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00:00Let's get you the latest on trade. A White House official has confirmed that the Trump White House

00:06is weighing curbs on critical software sales to China. Let's bring in Min Min Lo, our China

00:12correspondent in Shanghai for us this morning. Min Min, so reports are saying that these could

00:16be similar to some of the restrictions implemented against Russia following the invasion of Ukraine.

00:21What details do we know about this? That's right. And Reuters was the first to report this. We know

00:27that the U.S. had imposed curbs on things like enterprise solution software, design software,

00:32CRM software as well. And right now the White House is confirming that they are considering

00:38curbs on China. It's not too clear how sweeping those curbs would be, whether it would affect

00:44just directly U.S. software alone or whether there is this extraterritorial element to it

00:50affecting foreign products that rely on U.S. software as well. And when asked about this,

00:55Scott Besson said that everything is on the table when it comes to export controls,

00:59not just on software, but also on engine parts, for example. And the U.S. will be coordinating

01:04with other G7 nations on their strategy. But right now we have also seen signs of China preparing to

01:11retaliate as well because we have seen how the Chinese Commerce Ministry had been sending out

01:15questionnaires to certain U.S. chip companies asking for sensitive information about their sales data,

01:21their profits and cost data, and the difference between those data in China and their home

01:25countries as they try to gather intelligence for anti-dumping probes. And it shows you that China

01:31is not likely to back down to any threat of more punishment and export controls from the U.S.

01:38It certainly complicates how we look at these trade talks as a countdown to APEC. Okay. When it comes

01:44to the EU, though, they're also preparing trade options to counter these rare earth controls from

01:50China. What measures are they considering now? Oh, that's a million dollar question that we still

01:55don't know because the EU has been pretty tight lipped about that. But we know from sources that

02:00they are looking to prepare a set of measures by the end of the month in order to give them more

02:05leverage in negotiation. And this comes after both sides failed to reach a resolution after the EU

02:11trade chief had a talk with his Chinese counterpart Wang Wentao. No resolution was reached, but the EU

02:17side said they do not want to escalate. But clearly it's casting a shadow over the relations. And he

02:23says prompt action is needed because you can see here China clearly dominates the rare earth supply

02:28chain. And it has tremendous consequences on many different sectors from batteries to EVs to defense

02:36manufacturing, consumer electronics, chips production as well, because it's needed in those

02:40lithography machines. And so dialogue is ramping up. There is a Chinese delegation that is expected to

02:46head to Brussels for talks in a matter of days. But the EU has said once again that they are also going to

02:52coordinate with other G7 allies to look at how to diversify away from Chinese supplies.