The Trump administration is drafting a ban on U.S. imports of new Chinese data center components, targeting optical transceivers to protect artificial intelligence infrastructure. The Federal Communications Commission aims to publish the measure this year, following similar restrictions on Chinese drones, power inverters, and robots.
Targeting the Data Center Supply Chain
The Federal Communications Commission is actively developing a regulatory measure to bar imports of new Chinese optical transceivers, according to four individuals familiar with the matter. These specialized components allow data to travel over fiber-optic cables at the speed of light within data centers, which house the chips to train and run AI models. Regulators hope to publish the restriction this year, at which point it would take effect.
The initiative seeks to prevent Chinese firms from installing malware, stealing data, or disrupting service at U.S. data centers. As the data center buildout scales up, you want to make sure the data center supply chain is secure from the get-go,
said Divyansh Kaushik, an AI policy expert at the Washington, D.C., advisory firm Beacon Global Strategies. Kaushik added that transceivers definitely pose a risk.
Proponents of the policy within the administration want to avoid a repeat of past telecommunications vulnerabilities. Specifically, officials are mindful of heavily sanctioned firms like Huawei, whose equipment became so deeply embedded in U.S. infrastructure that removal efforts proved slow, expensive, and incomplete. Although the Federal Communications Commission has historically operated as an independent agency, the U.S. Supreme Court backed President Donald Trump’s firing of a Democratic Federal Trade Commission member in June, expanding his powers over the government, including certain regulatory agencies.
Precedents in Robotics and Power Infrastructure
The forthcoming data center restrictions build upon a campaign of hardware curbs. On July 28, the Federal Communications Commission announced import restrictions targeting connected power inverters, humanoid robots, and quadruped robots manufactured in China. Power inverters serve as hardware connecting renewable energy sources and battery storage systems to grids and data center equipment.
Unlike existing hardware, which remains authorized for import, the new rules apply strictly to newly manufactured models. Administration officials defended the strategy by citing national security risks associated with remote foreign access, potential cyberattacks, and data theft. The President has made clear that the United States must have independent and secure supply chains for critical and emerging technologies like robotic devices and power inverters,
an administration official said on condition of anonymity. Economic security is national security, and the Trump administration continues to implement a nuanced and multi-faceted policy agenda to reindustrialize America.
Market Impact and International Retaliation
A U.S. ban on new Chinese data center devices would carry commercial consequences. Zhongji Innolight, one of the biggest global sellers of transceivers, holds a leading 27% share of the global data center transceiver market, according to Counterpoint Research. Innolight generates 90% of its revenue outside China and was added to the Pentagon’s list of alleged Chinese military-backed companies in June. American cloud firms such as Amazon Web Services could face increased costs if forced to transition away from Chinese vendors. Domestic alternatives like U.S.-based Coherent and Lumentum stand to benefit from the shift, though reports indicate they lack the scale to replace Chinese vendors.
The regulatory pressure has drawn pushback from Beijing. The Chinese embassy in Washington urged the United States to heed the objective and rational voices of the business communities in both countries
and to stop smearing Chinese companies and threatening them with sanctions.
The embassy added that China will take all necessary measures in response to any action that causes material harm to its interests.
Previous restrictions have been followed by retaliatory measures, including Beijing’s use of export controls on rare earth minerals last year.
