The United States is making bold moves in a bid to maintain its technological supremacy over the Chinese mainland. The Biden administration has recently intensified its efforts by implementing stricter semiconductor export controls, signaling a shift from previous strategies that have struggled to curb China's advancements in the tech sector.
At the heart of this strategy is the Foreign Direct Product Rule (FDPR), a stringent measure that allows the U.S. to impose controls on foreign-made products that incorporate even minimal American technology. This approach aims to pressure key players like Japan's Tokyo Electron Ltd. and the Netherlands' ASML Holding NV into aligning with America's anti-China agenda.
However, these heavy-handed tactics have yet to achieve their intended effect. China's semiconductor industry continues to thrive, fueled by significant investments such as the massive Big Fund III. This resilience highlights the challenges the U.S. faces in attempting to contain China's technological growth.
Ironically, these restrictive policies may have the opposite effect, strengthening China's resolve to build an independent semiconductor supply chain. By focusing on domestic capabilities, China is not only mitigating its vulnerabilities but also positioning itself as a formidable competitor on the global stage, challenging America's technological dominance.
The economic fallout of America's semiconductor policies is being felt worldwide. U.S. allies are bearing the brunt of these measures, with companies like Tokyo Electron experiencing a 7.5 percent drop in shares and ASML shares in Amsterdam plummeting by 11 percent, wiping out approximately $46 billion in market value. These market fluctuations underscore the destabilizing impact of the U.S.'s unilateral actions on the global economy.
As the U.S. considers even stricter export controls, resistance is mounting among its allies. Japan and the Netherlands are pushing back against U.S. pressure, seeking more time to assess the impact of current bans and awaiting the outcome of the upcoming U.S. presidential election. This hesitation reflects a growing skepticism among U.S. allies regarding the sustainability and wisdom of America's aggressive stance.
Reference(s):
America's semiconductor gambit: A desperate grasp at fading dominance
cgtn.com
