5th August 2026 – (Hong Kong) China restricted trade with a group of American entities and placed exports of drones, key components and related technologies to the United States under strict case-by-case scrutiny, the Ministry of Commerce announced on Wednesday, in response to a round of sanctions from Washington.
The move escalated a technology and trade stand-off as the Trump administration drafted a ban on US imports of new Chinese data centre components, four people familiar with the matter told Reuters. The Federal Communications Commission is working on a measure to bar new Chinese optical transceivers used inside data centres, with officials hoping to publish it this year.
The draft aims to curb risks of data theft, malware or service disruption at US facilities housing chips for artificial intelligence. The FCC could still modify or shelve the restriction, the sources said. Shares of US transceiver makers Lumentum, Coherent and Applied Optoelectronics rose sharply on the news. A ban would likely hit China’s Zhongji Innolight, a major global transceiver supplier added to a Pentagon military-company list in June.
The Chinese embassy in Washington said Beijing would take all necessary measures against actions that materially harmed its interests and urged Washington to stop smearing Chinese firms. The FCC has already used its Covered List to restrict Chinese drones, routers, robots and inverters, and would ban new transceiver models before exempting many non-Chinese suppliers, three sources said.
Commerce Department curbs on Chinese data centre equipment were shelved after an October trade détente, but the FCC announced drone and router bans in December and March, with inverter and robot restrictions following last week. Beijing had earlier blacklisted US defence-linked entities including drone makers after Washington expanded Chinese military-company lists.