China says U.S. chip warning hurts trade talks

China on Monday accused the U.S. of undermining the two countries’ preliminary trade agreement after the U.S. issued an industry warning against using Chinese chips that singled out Huawei.

Beijing has “demanded” that the Trump administration “correct its mistakes,” a spokesperson for China’s Ministry of Commerce told a reporter, calling the U.S. Commerce Department’s guidance “discriminatory” and “market distorting.”

“China urges the U.S. to immediately correct its wrong practices,” the spokesperson said, according to a Google translation.

“If the U.S. insists on its own way and continues to substantially damage China’s interests, China will take resolute measures to safeguard its legitimate rights and interests,” the spokesperson said.

The White House did not immediately respond to CNBC’s request for comment on the remarks.

The U.S. Commerce Department’s Bureau of Industry and Security issued an alert last Tuesday warning of “the risks of using PRC advanced-computing ICs, including specific Huawei Ascend chips.”

“These chips were likely developed or produced in violation of U.S. export controls,” the bureau said.

That guidance came two days after the Trump administration announced a “China trade deal” following high-level talks in Geneva, Switzerland.

Those negotiations led Washington and Beijing to agree to a 90-day pause on most of the tariffs that had ground trade between the two nations to a halt.

President Donald Trump has said that U.S. tariffs on Chinese goods — which were slashed to 30% from 145% — could be dialed back up if a broader trade deal cannot be reached by the time the pause expires.

Treasury Secretary Scott Bessent called the talks “very constructive” and suggested “that perhaps the differences were not so large as maybe thought.”

But Monday’s remarks suggested the U.S. stance on Chinese chips could create a roadblock for further trade progress.

“The U.S. abuses export control measures, tightens control over Chinese chip products on trumped-up charges, and even interferes with Chinese companies using chips produced in China,” the spokesperson for Beijing said.

“The U.S. is overreaching, which is a typical unilateral bullying behavior. China firmly opposes it,” the spokesperson said.

“The U.S.’ actions seriously damage the legitimate rights and interests of Chinese companies, seriously threaten the security and stability of the global semiconductor supply chain and have a serious impact on global scientific and technological innovation,” the spokesperson added.

“This practice of using unilateral protectionism to contain and isolate other countries will ultimately undermine the competitiveness of the U.S. industry, and the result can only be to shoot itself in the foot.”