US-China AI decoupling ‘manageable’ for trade – but tech curbs a ‘wild card’: Citi
As US-China tech tensions rise ahead of an expected leadership summit next month, analysts argue Washington’s latest restrictions are unlikely to cause a major disruption in China’s AI exports. But they caution that some of the measures – such as limiting access to “open-weight” models – represent a “genuine wild card” that could reshape the global landscape. Hong Kong-based analysts at Citi…
US-China tensions over artificial intelligence (AI) appear manageable for China's export sector, according to analysts at Citi Research. While US tariffs and export controls are unlikely to significantly disrupt China's AI exports, some measures, particularly limiting access to open-weight models, could reshape the global landscape.
Citi researchers estimate that a full AI decoupling could place up to 9.2% of China's exports at risk, but even this scenario would likely be manageable, given Beijing's experience with previous US tariffs. The ongoing trade tensions between the world's two largest economies intensified ahead of President Xi Jinping's planned visit to the US in September. Both nations have imposed reciprocal measures, including targeting AI models, advanced robotics, and optical transceivers, while expanding their forced labor blacklists.
The latest restrictions focus on drones, with the US signing a proclamation imposing up to 100% tariffs on certain imported drones and components. Citi analysts warn that these measures could slow China's model development and overseas data center expansion in the short term. However, they believe that over time, China could accelerate infrastructure buildout under its own technology stack, even if it means a temporary slowdown in trade flows.
Written by urgent.news from South China Morning Post's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
