China on Monday accused the US of undermining the two countries' preliminary trade agreement after the US issued an industry warning against using Chinese chips that singled out Huawei, per CNBC.

According to a spokesperson for China's Ministry of Commerce, the US Commerce Department's advice is "discriminatory" and "market distorting," prompting Beijing to "demand" that the administration "correct its mistakes."

China Slams U.S. Huawei Chip Ban as Threat to Trade Truce
China Indicators

China has strongly criticized a U.S. directive targeting certain high-end Huawei chips, saying it undermines a recent trade consensus. Just days after U.S.-China talks in Switzerland led to agreements on lowering tariffs, the U.S. Commerce Department alleged that Huawei's Ascend chips were likely developed illegally using U.S. technology.

"The U.S.'s actions seriously undermined the consensus of the high-level talks between China and the U.S. in Geneva," a Chinese Commerce Ministry spokesman said Monday, echoing a May 15 statement. He urged the U.S. to "correct" the move, calling the directive discriminatory and market-distorting. The May 13 directive was part of a broader update to U.S. export controls on AI technologies.

Initially, it declared that global use of the chips violated U.S. export laws, though that language was later softened to say such use carries risks. The tension threatens to overshadow the 90-day tariff pause intended to create space for a broader deal.

Source: Trading Economi