US Commerce Dept Withdraws AI Chip Export Rule — Internal Disagreements in Trump Administration

On March 13, 2026, the US Commerce Department withdrew a new draft regulation it had been preparing to revise export controls on AI semiconductors. The withdrawal just over two weeks after publication highlights the policy confusion within the Trump administration.

The withdrawn rule was intended to replace the Biden administration's three-tier country classification system. The Commerce Department had presented the draft to various agencies in February, and interagency consultations were underway. The new proposal included stricter conditions requiring export destination countries to invest in US data centers and provide national security assurances. However, disagreements emerged between those wanting to promote AI exports to establish international dominance and national security hawks concerned about technology leakage to China and Russia.

A former government official noted that 'the regulation was withdrawn because there is no consensus within the administration on achieving international AI supremacy while addressing national security risks.' Meanwhile, government sources described it as 'originally a draft, with discussions at a preliminary stage,' attempting to minimize the impact of the withdrawal. The Office of Management and Budget (OMB) website also confirmed the withdrawal of the AI-related regulation on the same day.

This withdrawal demonstrates that the direction of US AI semiconductor export policy remains unclear. US semiconductor companies like NVIDIA and AMD face declining sales due to restricted access to the Chinese market and are strongly pushing for deregulation. At the same time, there are persistent calls to curb China's AI technology development, forcing the Trump administration into a difficult balancing act. The Commerce Department maintains it will continue to promote 'safe export of American technology,' but the specifics of the regulatory framework have essentially returned to square one.