The Biden administration froze China’s advanced chip production and supercomputing capabilities in October of last year as part of its heavy-handed geo-economic statecraft “to maintain as large of a lead as possible,” as U.S. National Security Advisor Jake Sullivan put it earlier. Since then, stakeholders in the semiconductor ecosystem, whom the United States has been trying to enlist in its decoupling campaign, have continued to voice their opposition to such restrictions, which are unilateral and extraterritorial in nature.
Reuters reports that on January 27, Dutch and American officials met in Washington to discuss potential new controls on exporting semiconductor manufacturing gear to China. This came after Peter Wennink, CEO of ASML Holding NV, warned that excessive control measures could lead to higher costs for chipmakers, impacting chip availability and the semiconductor supply chain. The report added that, according to the sources, an announcement of the deal could come as soon as the end of the month.
The move is the most recent in a series of efforts by the United States to coerce its European and East Asian allies, especially the Netherlands and Japan, into joining its aggressive technological warfare against China. Biden’s tech-centric war is, broadly speaking, an economic war waged against China, with the primary motivation being the United States’ desperation to maintain its hegemonic economic advantage over China.
Washington’s current tech war against China echoes its 1980s campaign against Japan. But the United States’ semiconductor control measures against China stand out in that they are based on an incorrect understanding of the global technological ecosystem and an exaggerated belief in the country’s ability to force the system to function in accordance with its strategic goals.
So far, the Biden administration’s techno-nationalist approach to China appears to take a two-pronged approach. On the one hand, it has weaponized its last remaining privileged foothold in the global technology supply chain, most notably through its “foreign direct product rule” provisions, which allow the United States to apply controls extraterritorially in certain circumstances, such as requiring companies outside the United States to not sell semiconductors to China if they were produced using U.S. equipment. However, it has been in a mad dash to re-establish its technological and industrial dominance through on-shoring, seemingly at the expense of its allies and perceived enemies as well as the open and free international trade system.