[Salon] Trade War Monitor

Monitoring China's handling of the ongoing trade conflicts with the U.S. and the geopolitical consequences arising from tariff policies of the Trump administration.

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The latest salvo from the U.S. Commerce Department closes a significant loophole, extending strict export controls to any majority-owned subsidiary of a blacklisted firm. This move widens the net of U.S. restrictions, making it vastly more difficult for designated Chinese tech giants to operate through corporate affiliates.

At the same time, top Trump administration officials have declared a new industrial policy goal: to slash the nation’s reliance on advanced semiconductors from Taiwan by half, a monumental effort to decouple America’s most sensitive supply chain from a geopolitical flashpoint.

But this is not a one-sided affair. China is mounting a sophisticated counter-strategy focused on attracting talent and rerouting capital. As the U.S. makes it more expensive to hire high-skilled foreign workers, Beijing is rolling out a new “K-visa” tailored specifically for young, foreign STEM professionals.

And as U.S. tariffs bite, Chinese firms aren’t just weathering the storm — they’re creating a new one. A surge of investment is flowing into Southeast Asia, particularly Malaysia, as companies pivot to build new manufacturing hubs outside the direct line of fire, fundamentally redrawing the map of global production.

We will continue to closely monitor this economic warfare so our readers are better prepared for the impacts to come.

Closing the subsidiary loophole

The U.S. government is tightening its export controls, extending restrictions on blacklisted companies to any subsidiaries in which they hold a majority stake.

Any company that is 50% or more owned by one or more of the entities on the U.S.' "Entity List" will be subject to the same export restrictions, according to a new rule issued on Sept. 29 by the U.S. Department of Commerce’s Bureau of Industry and Security (BIS).

The change, which closes what the BIS called a “significant loophole,” also applies to firms majority-owned by entities on the “Military End-User List” and certain sanctioned entities. Previously, a company was not subject to the controls unless it was specifically named on a list, regardless of its affiliation with a restricted entity.

U.S.’ chip reshoring

Top Trump administration officials have declared a push to dramatically reduce U.S. reliance on advanced semiconductors from Taiwan, with a target of producing up to half of the nation’s supply domestically or in allied countries.

U.S. Commerce Secretary Lutnick said the goal is for 50% of the advanced chips America needs to be made within its own borders. His comments, made in an interview with News Nation this weekend, echoed U.S. Treasury Secretary Scott Bessent’s remarks last week that 30% to 50% of the U.S. supply must be shifted to the U.S. or to allies such as Japan and countries in the Middle East.

The policy drive represents a significant effort by the new administration to reconfigure the global semiconductor supply chain, motivated by national security concerns over Taiwan’s near-monopoly on production. Taiwan currently makes 95% of the world’s most advanced chips.

The Malaysian workaround

Demand for business-class seats on China-Malaysia routes has been climbing as more Chinese companies explore investment opportunities in the Southeast Asian country, Dersenish Aresandiran, chief commercial officer of airlines at Malaysia Aviation Group Bhd, parent of the national carrier.

The influx is a calculated pivot that is part of a broader shift in global trade, thanks largely to U.S. President Donald Trump’s tariff onslaught earlier this year. Chinese firms that would have looked to countries like Malaysia as a means to skirt tariffs are now boosting investment in the local market. In particular, Malaysia’s targeted government incentives and deepening ties with Beijing have benefitted sectors including semiconductors, electric vehicles (EVs) and infrastructure.

Beijing plays the talent card

China is launching a new visa category for young foreign technology talent, a move that comes just as the Trump administration sharply increases the cost for U.S. companies to hire high-skilled overseas workers.

China will add a K-visa to its ordinary visa categories, a foreign ministry spokesperson announced Monday. The policy, already written into the revised Regulations on Administration of the Entry and Exit of Foreigners on Aug. 7, is designed to attract young science, technology, engineering and mathematics (STEM) professionals.

The introduction of the K-visa signals China’s intensified push to lure global talent and bolster its technological capabilities, particularly in strategic sectors like semiconductors where it is behind the U.S. The policy stands in stark contrast to Washington’s more restrictive immigration stance, highlighting a growing divergence between the world’s two largest economies as they compete for technological and geopolitical dominance.

China's high-tech engine revs Up

The contribution of high value-added industries such as biomedicine to China’s total economic inputs rose last month, as expansions in labor and technology inputs offset a contraction in capital inputs, a Caixin index showed.

The Caixin BBD New Economy Index (NEI) came in at 31.2 in September, up 1.3 points from August, reflecting that new economy industries accounted for 31.2% of China’s overall economic inputs.

The NEI uses big data to track the size of China’s emerging industries, measuring their labor, capital and technology inputs relative to those used in all industries.