China tightens export controls, hindering US tech giants’ expansion Plans- Nikkei

Investing.com– China is ramping up its scrutiny of exports by U.S. tech companies like Apple Inc (NASDAQ:), Microsoft Corporation (NASDAQ:), and Dell Technologies Inc (NYSE:), delaying their efforts to shift production to Southeast Asia and India, Asia reported on Tuesday citing sources.

The increased customs checks, tied to dual-use technology export controls introduced in December, have caused delays of days or even weeks for shipments of production equipment and materials, the report stated.

Dual-use items, which have both military and commercial applications, now face stricter reviews at Chinese customs. While the official controls target specific items such as tungsten, graphite, and gyroscope testing tools, companies report that even non-listed items are being delayed due to similar classification codes, according to the Nikkei report.

The tighter controls coincide with escalating U.S.-China trade tensions. President-elect Donald Trump has pledged up to 60% tariff on all Chinese goods, while the Biden administration recently imposed further restrictions on China’s access to advanced AI chips and added over 140 Chinese entities to a trade blacklist. Beijing retaliated by banning the export of critical materials like gallium and germanium to the U.S.

The delays are impacting the diversification strategies of major U.S. companies, which still depend on Chinese-sourced materials and equipment to build production lines outside China, according to the report.

Analysts suggest that the stricter checks are part of China’s strategy to slow the exodus of manufacturing.

While full decoupling from China is unlikely, ongoing trade frictions are forcing companies to rethink their production strategies, the report stated.