January 15, 2026
U.S.-China Competition Accelerates Across the Tech Stack
This article was originally published in Just Security.
Over the course of 2025, the United States and China rapidly escalated trade and tech restrictions toward each other, then negotiated to roll them back. By the end of the year, the superpowers had established a fragile détente, with the Trump administration refraining from imposing new export controls or sanctions to retaliate for China’s cyberespionage out of fears of upsetting this shaky truce. The result is a quiet sea change in U.S. economic security policy. After years of steady progress on the China derisking policy agenda—marked by new controls on dual-use technology exports, outbound investments, and the transfer of sensitive personal data—at the outset of 2026 the Trump administration has effectively paused any new competitive actions toward China.
Any companies making business decisions on the assumption the current détente truly represents a break in the longer-term trend of heightened geoeconomic competition may be disappointed.
The trend to watch this year is how long this truce will last, and what happens to the U.S. tech protection agenda in the meantime. The Commerce Department recently withdrew plans to restrict the import of Chinese drones and the White House opted not to introduce any significant new tariffs on semiconductors. Yet even as the Trump administration studiously avoids new tech restrictions that might destabilize the status quo, other parts of the government may have an incentive to act. Late last year, Congress passed a law that codified and expanded the outbound investment rules, and there are ongoing legislative efforts to strengthen U.S. chip controls. Meanwhile the Federal Communications Commission (FCC), a regulatory agency (debatably) independent of the administration, may step in where the Commerce Department is stepping back: in late December the FCC issued its own rule restricting the import of foreign drones. Unlike Commerce’s proposed approach, the FCC rule applies to foreign drones from any country, rather than explicitly targeting China, perhaps in an effort to avoid provoking Chinese retaliation. This may become a model for additional new restrictions.
Read the full article on Just Security.
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