US-China Rivalry

The Trade War

US-China economic tensions had been building for years before the Trump administration launched a trade war in 2018. Core US grievances included:

• Trade deficit: The US ran a $375 billion goods trade deficit with China in 2017
• Forced technology transfer: US companies were required to share technology with Chinese partners as a condition of market access
• Intellectual property theft: The US accused China of systematic IP theft costing US firms hundreds of billions annually
• State subsidies: Chinese state-owned enterprises and industrial policy (e.g., 'Made in China 2025') were seen as creating an uneven playing field

The US imposed tariffs on hundreds of billions of dollars in Chinese goods; China retaliated in kind. The 'Phase One' deal (January 2020) paused escalation but did not resolve structural issues. The Biden administration largely maintained Trump-era tariffs while adding targeted technology restrictions.

The Technology War

The US-China rivalry has increasingly centered on technology — specifically, who will control the key technologies of the 21st century: artificial intelligence, semiconductors, quantum computing, 5G, and biotechnology.

US actions have included:

• Banning Huawei from US networks and pressuring allies to do the same
• Restricting China's access to advanced semiconductors and chip-making equipment (October 2022 export controls)
• Limiting US investment in Chinese AI, quantum, and semiconductor firms
• Restricting Chinese access to cloud computing services

China has responded by pouring hundreds of billions into domestic semiconductor production, AI research, and technological self-sufficiency. The result is an accelerating 'decoupling' or 'de-risking' of the world's two largest technology ecosystems.

The semiconductor export controls are particularly consequential. Advanced chips are essential for AI training, military systems, and advanced computing. By restricting China's access to the most advanced chips and the equipment needed to make them, the US is attempting to maintain a decisive technological advantage — a strategy with no modern precedent.