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Asian main equity indexes declined on Tuesday, pressured by a mix of broad risk-off sentiment, US equity degrossing, unfavorable seasonality trends, some technical factors, and profit-taking. Fresh concerns over President Trump's 'America First' policies further weighed on sentiment. 

A report last weekend indicated that the Trump administration directed the Committee on Foreign Investment in the US to restrict Chinese investments in strategic sectors to safeguard national security interests.

However, this note focuses on a new Bloomberg report detailing Trump's efforts to curb China's chip advancements as AI enthusiasm erupts in the world's second-largest economy alongside soaring AI CAPEX spending. 

Individuals familiar with Trump's upcoming chip restrictions on China informed Bloomberg about what's coming down the pipe: 

The timing of the new chip restrictions could "take months," according to Bloomberg, noting, "It remains to be seen whether allies will be more receptive" to additional restrictions on China's chip industry.

Goldman's Ananya Prakash in London commented on the ongoing trade situation: 

Tokyo Electron shares closed down nearly 5% after the Bloomberg report. 

Prakash provided clients with more color on semis action today: 

The chart we're tracking is the PHLX Semiconductor Sector, which is trading 15% below its July 2024 peak.

Last week, Goldman's Fred Yin and Shubham Ghosh asked clients if US exceptionalism in big tech is over as the AI boom shifts to China… 

Plus, there are mounting concerns about Microsoft data center order cancellations, per a new TD Cowen report. However, MSFT "strongly refutes" the report.