Can America Contain China’s Tech Rise Alone?

Washington hoped cutting China off from key technologies would shift the balance. But the global innovation system runs on many switches — and America doesn't control them all. As U.S. partners hesitate and resist, can it still win this tech war alone? Or risk losing more than it protects?

Curbing China's Tech Progress is not about Trade, it's about Power

In the 21st century, winning in technology means controlling the economy, the military, cyberspace, and even minds. A country that dominates artificial intelligence, microelectronics, and biotechnology sets the rules of the game for the entire world, from the structure of global markets to the security architecture.

That is why the United States is trying to limit China's access to advanced chips and key innovations. However, it’s clear that these efforts are not just about competition. It is about who will determine the future.

When Washington launched a large-scale export control campaign, it counted on the unity of the democratic camp. But it quickly became clear that the technology war is not so black and white.Partners are hesitant, allies are looking for exceptions, and China is finding loopholes.

Will the United States Be Able to Keep Beijing at Bay on Its Own, and will It Lose Control of the World It has Built?

In October 2022, the US administration took a step that defined a new phase in the global technological confrontation.

It was not just another statement or symbolic restriction. The U.S. government imposed large-scale restrictions on the export of advanced chips and equipment for their production, a strategic decision aimed at curbing China's technological breakthrough.

Its main goal was clear: to cut Beijing off from the most advanced processors, which are a critical resource for the development of artificial intelligence, autonomous combat systems, cyber weapons, and massive intelligence gathering tools.

This decision was a continuation of the policy of the first Trump administration. However, now Washington acted on a larger scale, more comprehensively, and much more ambitiously.

Inside the United States, it was well understood that no restrictions would work if they were not supported by others. After all, the semiconductor industry is not an American monopoly, but a global chain in which critical components, materials, and equipment are produced in the Netherlands, Japan, South Korea, and Taiwan.

The US sanctions were accompanied by bans on technology exports (NVIDIA, ASML, TSMC), and restrictions on investment in China's AI, quantum computing, and biotechnology industries. At the same time, the Chip 4 Alliance was being created – the United States, Japan, South Korea, and Taiwan. The goal was to create a controlled semiconductor ecosystem where China would not have critical access to key technologies. But limitations began to emerge: the allies did not always play by the same rules.

Beijing's Loopholes: How Allies Undermine the Effectiveness of Restrictions

It was at this stage that America faced challenges that called into question the effectiveness of its strategy. For example, ASML, the Netherlands, is the world's only manufacturer of extreme ultraviolet lithography machines, which is crucial to create the latest generation of chips.

If the Netherlands does not agree to strict restrictions, China gets a loophole. The situation is similar in Japan, where Tokyo Electron continues to cooperate with Chinese manufacturers if there is no strict joint regulation.

South Korea has become a particular risk node. Samsung has large production facilities in China, and Seoul itself often hesitates between its security alliance obligations and economic interests. This imbalance turns the sanctions policy into a sieve: the mechanism seems to work, but the water leaks out.

Europe has also become an ambiguous partner. Despite US pressure, not all countries agree to the complete isolation of Huawei or other Chinese players. The reason is not just business. Brussels fears geo-economic blackmail from Beijing, which has already been able to exploit the EU's dependence on Chinese rare earth metals. The situation is even more complicated with the countries of the Global South - India, Brazil, South Africa, and Turkey – which do not share the Western logic of a “technological blockade” and often view China as a balance against the United States. Without a united front, sanctions become partly symbolic.

China's Counterattack: Autonomy, Exports, and Strategic Expansion

Beijing, instead of adapting, went on the offensive. The ‘Made in China 2025’ initiative is regaining momentum as China is rapidly trying to replace critical imported technologies. Investments in the national semiconductor industry have increased significantly. In addition, through the Digital Silk Roadinitiative, China is actively expanding its technology exports to countries less dependent on the United States. This creates an alternative global techno-sphere where the West loses its monopoly on standards and innovation.

While the United States coordinated export restrictions with its allies, China was able to accumulate record stocks of equipment. In 2024, imports of chip equipment to China reached $26 billion. This was beneficial for ASML, Tokyo Electron, and even the American Applied Materials – but undermined the effectiveness of the containment policy itself. Even more disturbing, in many cases, allies agree to only a limited list of export bans. While U.S. companies are forced to withdraw from the Chinese market entirely, Japanese and Dutch firms continue to supply spare parts, modernize and even maintain Chinese factories.

American Response: from Diplomacy to Unilateral Pressure

With this in mind, a growing number of voices in the United States are calling for a tougher game. In December 2024, the U.S. Department of Commerce expanded the application of the foreign direct product rule, a rule that allows for restrictions on any product manufactured using U.S. technology. Almost all modern chips and equipment now fall under this rule. The United States has gained a tool to block Chinese access to global markets on its own – without diplomacy.

This makes it possible to bypass allies. But at the same time, it undermines confidence in Washington. Many countries consider such actions to be interference with sovereignty. Discontent is growing in Europe and Asia, both at the state and corporate levels.

This is the main trap. Extraterritorial control looks powerful, but in reality it is a diplomatic nightmare. Not all countries are ready to recognize the right of the United States to regulate their exports. Moreover, excessive pressure from Washington can cause a counter-reaction – a decrease in cooperation, the withdrawal of already imposed restrictions, or even a withdrawal from joint initiatives in the areas of security, trade, or climate. And the tougher the Trump administration acts on tariffs and allies in Europe, the less leverage it will have.

Can America Win the Technology War Alone?

The paradox of the situation is that even the most advanced control tools will lose their effectiveness if American technology is pushed out of global supply chains. If Japanese, Korean, European, or even Indian manufacturers find ways to reduce their dependence on American components, then the foreign direct product rule will turn into a declaration without force.

And while extraterritorial restrictions may have a temporary effect, they cannot guarantee a long-term advantage. Beijing is only accelerating the development of alternatives, and allies are increasingly questioning American leadership as an ally, not as a hegemon.

Under the pressure of geopolitical uncertainty, the United States faces three realistic trajectories. 

Each of them has its own logic, price, and consequences not only for America but for the whole world.

In the first scenario, the United States acts without allies. This allows it to quickly update the rules of control, without endless consultations and diplomatic compromises. But in reality, the effect is limited. China adapts, creates workarounds, accumulates chip stocks, and continues to consistently build its own technological autonomy.

In the second case, the United States acts with partial support from its partners. This is the model being implemented now: Tokyo and Amsterdam agree to certain export restrictions, but retain the ability to service Chinese factories and supply non-sanctioned components. This gives a better result than complete isolation, but does not guarantee strategic success. The main problem is time. Coordination takes months, and during this time, Beijing has time to adapt.

The most optimistic-but also the most difficult-scenario involves the creation of a global coalition of democracies that simultaneously blocks China's technological access. This could stop China in critical areas of AI and microelectronics development. But achieving such unity is extremely difficult. Countries have different economic interests, levels of readiness for conflict with Beijing, and political sensitivity to Washington's pressure. In many cases, the fear of losing the Chinese market outweighs the willingness to play on the side of the US strategic advantage.

So, the United States is really at a crossroads. Going it alone means accelerating the fragmentation of the global technology space. Playing in a team is hard, long, and sometimes humiliating. But it is the only way to gain strategic advantage. Without allies, America can only slow down China. With them, it has a chance to overtake it.

The American advantage is not only in technology, but also in the ability to rally allies. Without multilateral diplomacy, the United States risks being left with levers that no longer work: rule-based control is meaningless if others do not follow the rules.

In the long run, technological superiority is not only an economic issue, but also a security issue. The war in Ukraine has already shown how critical the West's technological superiority in intelligence, satellite data, drones, and electronic warfare is. China is closely watching this conflict, testing how well its asymmetric influence tools can work – and at the same time learning about the West's weaknesses.

If the United States loses its ability to coordinate its technology policy with its allies, the next point of pressure could be not only Taiwan or the South China Sea, but also the expansion of fronts through proxy conflicts. In this sense, Ukraine is not an exception, but a warning.

The choice between unilateral action and diplomacy is not only a dilemma with regard to China. It is a question of trust in American leadership in all regions, from Asia to Europe. And it is in Europe that the United States is also playing a critical game today: Russia's war against Ukraine continues, and its allies are waiting to see if Washington will remain a reliable strategic partner. If the United States puts pressure on its allies in Asia, while at the same time showing fatigue in supporting Ukraine, it sends a dangerous signal of inconsistency in American policy.

In the new architecture of the tech world, even countries that are not traditionally associated with chip manufacturing can become critically important. Ukraine, for example, is a leading producer of neon, a gas needed for laser engraving in chip manufacturing. After Russia's full-scale invasion of Ukraine, markets saw how vulnerable certain parts of the global supply chain are. This is another argument in favor of multilateral cooperation rather than techno-nationalism.

Ihor Petrenko, founder of the “United Ukraine” Think Tank, Doctor of Political Sciences