U.S.-China trade truce has blown up again, and Huawei is at the center of it; here's how the situation could pan out

China warned that anyone who helps the US restrict Huawei’s chips could face legal trouble under China’s Anti-Foreign Sanctions Law. China didn’t say what kind of punishment people or companies would get if they break this law. China’s Commerce Ministry said this in a statement on Wednesday.

This warning comes at a time when China is trying to improve relations with the US, so it adds tension, as per Bloomberg report. The US said that using Huawei chips in any country would go against its rules, as per reports.

But later, the US removed the line about "anywhere in the world", making the rule less clear. China believes that past US actions against chips during Trump’s time hurt recent trade talks in Geneva, as per China’s official stand mentioned in Bloomberg.

Wu Xinbo, a professor at Fudan University in Shanghai, said this new step from China shows that talks between the two countries are still going on, at least at a working level. Wu also said the challenge now is to keep the positive vibe from the Geneva talks alive and maybe even have high-level talks next month.

Vice Foreign Minister Ma Zhaoxu told David Perdue, the new US ambassador chosen by the Trump administration, that the Dragon is very much interested in fixing ties and collaborating economically with the United States , as per reports. The statement showing eagerness to engage by China came on the same day on which threats were issued by it for boycotting Huawei.

But even after the truce, many big tariffs are still in place on Chinese goods. China is trying to keep the talks going, even though there are big fights still going on about US tech restrictions and China’s control over rare minerals.

There’s also a serious issue where the US says China is linked to fentanyl entering the US, and wants China to help stop it, as per Bloomberg report.

Graham Webster, from Stanford University’s DigiChina project, said the tariffs and tech fights are kind of separate issues with different logic. He also said if the US and China ever make a bigger trade deal, then the tech rules might also be discussed, as per the reports.

FAQs

Q1. Why is China angry about Huawei chip rules?
China says US chip restrictions are unfair and hurt trade talks.

Q2. Are the US and China still talking?
Yes, they are still having meetings to improve relations.