Mint explainer: How allies' support to US tech curbs on China is shaking

Washington has made a big gamble on its technology export curbs on China. Photo: Bloomberg
Washington has made a big gamble on its technology export curbs on China. Photo: Bloomberg


  • Japan and the Netherlands, crucial to deny tech export to China, don't want to toe the American line.

Washington has seemingly run into trouble with its European and Japanese allies. Mere months after unveiling an expansive set of curbs on technology exports to China, America has run into resistance from Japan and the Netherlands, both of which are technology powerhouses that the United States desperately needs.

1. The US launched a sweeping series of export bans on China's technology industry. Washington restricted the sale of advanced semiconductors and key manufacturing to Chinese enterprises. Further, US citizens and green card holders were restricted from working for Chinese high technology firms.

2. The objective was to stunt the development of China’s rapidly developing technology sector. For example, Chinese semiconductor firm SMIC succeeded in manufacturing an advanced 7 nanometre chip. By cutting off access to American technology, Washington hoped to maintain its technological edge over Chinese firms.

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3. National security was also a key concern. The Biden administration reasoned that advanced semiconductors could be utilised to fuel China’s rapid military expansion. Stymying the flow of advanced technology to Chinese firms was as much about national security as about economic competitiveness.

4. However, American export curbs also need the support of allies. The Netherlands is home to tool-manufacturer ASML, which possesses advanced machinery that is vital for the manufacture of cutting-edge semiconductors. Japan’s Tokyo Electron is among the most dominant players in the chip-making tools market.

5. US Commerce Secretary Gina Raimondo publicly stated that Japan and the Netherlands, given their close relationship with the US, would follow the American lead on tech export controls.

6. However, recent developments render that judgement unclear. The Dutch ministers of economy and foreign trade have called for their country to forge an independent path. While their country is holding talks with the US, they have made clear that the Netherlands will look out for its own interests. This is because China remains a major economic partner for the country and accounts for 11% of Dutch imports and 5% of exports.

7. Japan has been more circumspect. While Tokyo’s bureaucrats are in talks with the Americans as well, Tokyo Electron has not been shy voicing its concerns about US tech export curbs.

8. Washington has made a big gamble on its technology export curbs on China. It has risked billions in revenue for American enterprises on the premise that it could team up with allies to cripple Chinese technology firms. If those very same allies decline to join or implement restrictions half-heartedly, the impact of these curbs will be lost.

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