Chipmakers Are Right. Cutting Off China Will Backfire.

ASML is already restricted from selling its most advanced machines to China. Soon sales of older machines will be subject to Washington’s approval. Japanese companies face similar constraints. The use of a such a sweeping power to hold back non-US companies has had an unsettling effect. Privately, ASML felt bullied by the US, Bloomberg News reported, while Japanese government officials were said to have been bemused by sudden lack of sovereignty over its own tech successes, such as the chip-making equipment provider Tokyo Electron.

One problem with US limits on non-US companies, notes Emily Kilcrease, senior fellow with the Center for a New American Security, is that international businesses now have an incentive to design out US components to avoid being subject to these rules.

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