In the aftermath of the pandemic, war, and the economic convulsions that attended them, many column inches have been devoted to talk about de-globalization and an associated increase in supply-chain resilience. In Western policy circles, this has largely been construed as “decoupling” from China. Almost five years later, however, it has become increasingly clear that the world’s dependence on the system of supply chains mastered by China has, if anything, increased. The integrity of this very system is central to the successful and timely decarbonization of the global economy required to prevent irreversible climate disruption.
Last Monday, the outgoing Biden administration threw a further wrench into this system. It announced it would further tighten the restrictions on exports of US-made technologies that the administration had first implemented two years ago. The latest series of steps aimed at cutting off the Chinese from the world’s most important industrial technology. The measures included adding to a restricted trade list (the “entity list”) 140 Chinese firms primarily involved in the manufacture of machinery and tools required for the production of high-end chips.
This set of confrontational trade policies is a product of what Jake Sullivan, Joe Biden’s hawkish national security secretary, has dubbed America’s “small yard high fence” approach to dealing with China. To compliment these measures, Sullivan has also urged the United States to offer military support to its regional allies. The US Department of Commerce had previously extended exports controls to the manufacturers of the most advanced semiconductor producers in the world, namely the Netherlands-based ASML, who, with its German suppliers Zeiss and Trumpf, are currently the sole source of the EUV (extreme ultraviolet) lithography machines used by the Taiwan Semiconductor Manufacturing Company (TSMC) for the newest generation of chips.
The implications…
Auteur: Dominik A. Leusder
