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US drone tariffs raise uncertainty for China AI trade
Citi estimates a full AI decoupling scenario could put up to 9.2% of China exports at risk, though it calls that outcome likely manageable.
Citi analysts say recent US restrictions tied to rising tech tensions are unlikely to cause a major disruption to China’s AI exports, but they warn that some measures could materially shift the global AI landscape, according to SCMP Economy.
The analysts described access limits on “open-weight” models as a key wild card. In an extreme-case scenario of full AI decoupling, they estimated it could place up to 9.2% of China’s exports at risk, adding that even that would likely remain manageable.
They pointed to China’s ability to withstand tariff pressure after the US President Donald Trump’s “Liberation Day” tariffs last year, noting the US accounted for 14.7% of total exports as of end-2024. They also cited that direct bilateral AI trade with the US has already largely decoupled.
SCMP Economy reports that Chinese AI-related exports to the US fell 4.1% year on year between January and June, trimming overall export growth by 0.5 percentage points, and that Citi sees China as an indirect beneficiary of the broader global AI boom. Separately, on Thursday Trump signed a proclamation imposing tariffs of up to 100% on certain imported drones and components, citing national security and cybersecurity risks.