Nvidia scandal may test fragile US-China truce, experts say

The fallout from the Nvidia scandal may test the fragile truce between the US and China, analysts say, as calls in Washington grow to tighten semiconductor export controls just days before US President Donald Trump is due to meet Chinese leader Xi Jinping in Shenzhen, China.

“I think that [scandal] could have a bigger impact down the line during the meeting in Miami or even further down the line,” said Ilaria Mazzocco, a senior fellow at the Centre for Strategic and International Studies. Mazzocco was referring to another Trump-Xi meeting expected in December on the sidelines of the Group of 20 (G20) summit in Miami.

Mazzocco added that the bilateral arrangement was underpinned by the leverage each country held over the other, particularly China’s dominance in rare earths, which could limit Washington’s room to tighten restrictions.