I get it. As a business owner, I hated how the global economy was inherently unfair. The US market is the freest and most dynamic market in the world. While we continuously let any and all players enter US marketplaces, it wasn’t easy doing business abroad. My own travails in penetrating markets in Europe and the Middle East were fraught with red tape and the necessity of doing business with local boots in the ground. Over here, anyone can hang their shingle and take advantage of Americans’ desire to spend, spend, spend.

The latest salvo in the battle for technology supremacy comes from the United States. After China prohibited exports of gallium and germanium, two metals instrumental in microchip manufacturing, the US has prohibited sales of advanced chips and chip making tools to China and Chinese firms. The US has cited national defense as the reason claiming the Chinese will use US technology to bolster their military.

The US is also preventing Nvidia from selling its new A800 and H800 chips to the Chinese market. Analysts are predicting this will hurt Nvidia because China accounts for 25% of its global sales. Nvidia is also prevented from selling advanced gaming chips because they could be used to further China’s goals in AI.

These latest moves come after Huawei surprised the Internet with its new 7-nanometer microchips. The company surprised analysts because the most advanced manufacturing facilities are located in Taiwan, a US ally.

Other Countries Join the Fight

Japan and the Netherlands have joined the US in banning the sales of advanced chips and tooling to China.

Honestly, the oneupmanship since trade battles began in the Trump administrator pose a threat to innovation. China and the United States may be competitors, but they are engaged in a symbiotic relationship. The United States is a leader, may be The Leader, in technology. But the US relies on others for raw materials and occasional expertise in specific areas.

As the both countries dig in and refuse to deal in this area, there’s a real threat of stagnation. One thing competition with China has brought is US leadership in quantum and artificial intelligence. The way we’ve gotten there is by cheap resources. (And labor)

I’m all for making trade more even. China has been a bad partner in trade. At one point, China was dumping everything from washing machines to tires on the US market hurting local suppliers.

Somewhere in the middle there’s an opportunity for both sides to win. But the current rhetoric and threats don’t make it easy for anyone to deal.