Chinese authorities criticized the Donald Trump administration's restrictions on foreign-made humanoid robots, saying that such a move heavily affects relations between the two countries.

Damage To Trade Relations

According to a CNBC report citing a statement by China's Ministry of Commerce on Thursday, Beijing said the Federal Communications Commission's (FCC) ban on foreign humanoid robots "severely damages" trade relations and stability between the two countries. The ministry also threatened retaliatory actions against the U.S. if the decision is not withdrawn.

The White House and Tesla did not immediately respond to requests for comment.

If Beijing decides to impose countermeasures against the FCC's move, it could do so by restricting the movement of rare earth for American companies, as well as restricting access to the Chinese market for companies like Tesla Inc. (TSLA) and NVIDIA Corp (NVDA), according to Counterpoint Research's Marc Einstein, cited in the CNBC report.

Tesla CEO Elon Musk also took to the social media platform X in the early hours of Thursday, expressing doubts about the FCC's move.

In response to user Whole Mars Catalog, who outlined China's role in manufacturing technologies like smartphones, Wi-Fi routers and more. "China makes half the goods of Earth," the Space Exploration Technologies Corp. (SPCX) CEO said in his post.

Optimus Production

Any restrictions on rare earth materials could impact Tesla's humanoid robot goals, as the company had earlier said that production of its Optimus robot had entered a new phase, with Tesla transitioning its Fremont, California, facility to build the robot.

Lars Moravy, Tesla's VP of Vehicle Engineering, had earlier said that the company's Optimus production could have as many as 40 production lines, owing to the complex nature of the robot's design.

Tesla, NVIDIA and China

The Chinese market remains crucial for Tesla, as the Elon Musk-led automaker also has a facility in Shanghai that it uses to manufacture vehicles for both the Chinese market and overseas exports. Tesla's Model Y SUV emerged as the best-selling model across drivetrains in China during both June and March this year, selling more than 38,000 and 39,000 units, respectively.

Notably, both Musk and NVIDIA CEO Jensen Huang had accompanied Trump on his visit to China, where the two countries discussed bilateral trade ties, among other topics. China also remains a crucial market for the chipmaker, which recently started shipping its powerful H200 AI chips to the country in limited numbers.