What happened: In one of its most aggressive moves against China yet, America moved to choke off the country’s computer chip industry. President Joe Biden’s sanctions will strangle the Chinese AI industry, prevent China from designing and manufacturing its own high-end chips and from importing American chips and intellectual property.
Why are chips so important? Simple chips are necessary for producing smartphones, laptops, cars, aircraft, and other consumer products. Advanced chips, the ones sanctioned by the United States government, are needed for supercomputing, developing military weaponry, and artificial intelligence.
It’s a matter of superiority: If China wants military and technological superiority over the United States, it needs these chips that it can’t yet produce. According to some estimates, China’s chip-making abilities are still a decade away from the capabilities of America or Taiwan. Chinese officials said these new restrictions aimed to sabotage China’s development.
Big picture: These sanctions are a landmark in U.S.-China relations as America moves to kill China’s technological aspirations. The move follows Biden’s sanctions against Russia earlier this year, as the U.S. continues to escalate its use of economic restrictions to combat its largest rivals.