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MIT Technology Review

The US-China tech trade war is getting dialed up a notch

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The Trump administration could use its emergency legal powers to block Chinese investment in US tech—but make no mistake, China is fighting back.

Backstory: A trade war could be brewing, with tit-for-tat tariffs being applied by the US and China, spurred by Donald Trump’s concerns about China stealing American IP.

The news: The Financial Times says the US Treasury may use an emergency act to prevent China from investing in some industries, such as semiconductors. That’s something that President Trump has been mulling for a while. The US is also trying this week to block Chinese hardware firms, like ZTE, from US telecoms.

Fighting back:The US is thinking and acting like a bully,” says China’s foreign ministry spokeswoman Hua Chunying. So in return, China is finding fault with Qualcomm’s planned takeover of NXP Semiconductors to hurt America, as well as doubling down on developing its own high-end chips to decrease reliance on the US.

Why it matters: The escalating tensions could easily lead to political actions that harm American and Chinese tech firms, like Qualcomm and ZTE.