In 2019, I met with a group affiliated with the United States Trade Representative and a handful of elected officials who were the loudest proponents of what we today refer to as the “Tech War”. Someone on the staff had read a long-form piece I’d written for another publication entitled “Much More Than a Trade War with China”.
In that piece, I articulated why China’s trade policies are not the policies of just another country seeking to maximize their trade benefits for profit. Instead, I argued that China was using trade to wage unremitting war upon the United States, and I articulated possible responses the Trump Administration could take to respond in-kind.
The one thing I emphasized to the group of Trump Administration officials and elected Republicans from the Hill was the need to not only play prevent-defense on trade, specifically high-tech, but to fundamentally embrace the Chinese model of high-tech development—namely on-shoring as much production and research into the high-tech domain as possible.
Doing What Grandpa Did
We must effectively replicate the US strategy that was employed in the 1940s and 50s with the telecommunication industry as well as the formation of Silicon Valley (contrary to popular opinion, without copious government funding into the nascent industries that ultimately comprised Silicon Valley’s miracle of the later twentieth century, America’s tech revolution would have never occurred).
Today, with generous funding, China’s tech sector is exploding. The Trump Administration which initiated the Tech War assumed that simply by blocking the transfer of advanced technology and other high-tech intellectual property (IP), the Chinese would wither and die. Certainly, the Tech War begun under former President Donald Trump and continued under his successor, President Joe Biden, has done immense damage to the Chinese.
Yet, the assumption that China would simply take the punishment from the United States was a deeply flawed one. As I explained at the time—and continue insisting—without a viable offense, playing Prevent-Defense is insufficient.
Recent news has come out of China that they have defiantly evaded US chip controls that were imposed as part of the Tech War. Because of this, China has now developed seven nanometer computer chips for Huawei’s new phone. This puts them a mere five years (as opposed to ten or 15 years) behind the United States in advanced computer chip design and production.
Now, there’s a strain of thought among the Western intelligentsia that the chips in question were stockpiled by China before the US chip controls went into effect. Essentially, this is a giant mind-freak by Chinese leaders to distract Western audiences and policymakers from the reality that China’s economy is rapidly slowing down and President Xi Jinping’s rule within China is seriously threatened by rival factions within the Chinese Communist Party (CCP).
The Americans have consistently underestimated and completely misread the CCP’s threat to the United States for decades. If Washington believes what amounts to what the kids on social media call “extreme cope”, then US policymakers will have made a fatal error. China has become not only an imitator in critical high-tech domains, but they have evolved into a key innovator—notably in artificial intelligence (AI), quantum computing, aerospace (hypersonic technology, specifically), biotech, metamaterials science, and the list goes on.
Why assume that China hasn’t begun innovating in computer chip design? Why would a major company—despite it being a quasi-arm of the Chinese government—go to market with a product, like their new smartphones which require these seven nanometer chips to function properly, that would have only limited sales if the Western assumption that this technology is based off computer chips that were stockpiled before the US chip ban went into effect?
How is that a viable marketing strategy?
Of course, it is not.
We pulled the plug linking China’s need for advanced chips from the West. Now, China has dedicated its considerable wealth, resources, and human capital to indigenously innovating their own chip designs.
Which, they have.
China is Catching Up Bigly
It was four years ago when I met with the top US trade officials. In that time, China has moved from 15 years behind the US in chip design to five years. In another four or five years, if that trend persists, China will have caught up with the Americans.
Consider further that the US doesn’t actually produce high-end chips indigenously but instead relies mostly on Taiwan, South Korea, and Japan to do this—with Taiwan, which is currently under direct Chinese threat, being the biggest producer of the world’s sophisticated chip designs.
If the rumors are true that President Xi, because of the deteriorating domestic situation he’s facing, is plotting to strike hard against Taiwan, given America’s lack of domestic chip production, what will Americans do when they are denied access to the most sophisticated chips?
How will China’s stance as the only remaining somewhat sophisticated chip producer in the world be enhanced relative to the weakened and exposed American position in the tech sector?
The tariffs and sanctions are insufficient to meet the threat because, contrary to the obviously racist assumptions of many in Washington, Chinese can do a fine job of innovating and mass producing whatever they may need on their own.
Given that fact, what I advised then—and insist upon now—the Americans must get serious about going on the offense, which means we must begin funding and working toward restoring the essential domestic high-tech research and development—and mass production of those goods—at the expense of the easier and cheaper foreign-produced goods.
Biden Never Goes Far Enough
The Biden Administration proclaims that it passed the CHIPs Act in 2022. It was a vital step toward taking the offense in the Tech War against China.
But, in typical Biden fashion, the forty-sixth president and his fellow elected Democrats in Congress couldn’t abandon their obsession with Climate Change. The initial amount of money that Biden had requested—and the Republicans were happy to grant—was around $150 billion. A much better sum than the paltry $52 billion Biden only got from Congress (although $150 billion is insufficient to the task at hand, in my opinion).
Yet, Democrats had smothered the bill with goodies to the Green industry which the Republicans simply could not abide. Rather than recognize the threat that China’s technology posed to the Americans, the Democrats refused to negotiate, eventuating in a smaller sum. It is better than nothing, but it is a completely unserious amount of money if we are to—rapidly—bring chip production back to the United States.
Here’s What We Need
What is truly needed is at least $1 trillion exclusively for making the quest for Fourth Industrial Revolution technology here in the United States, as quickly as possible. Another aspect we’ve ignored is a way in which we prevent Chinese firms from gaining access to critical technologies and companies. Congress has yet to reclassify as bribes under the Foreign Corrupt Practices Act the many tech transfers that American firms do with China, in order to gain access to the Chinese market.
What’s more, the Committee For Investment in the United States (CFIUS) must be given far greater resources and power to prevent Chinese firms or Chinese-affiliated individuals and outlets the ability to purchase essential US companies or land. On the defensive side, this would be decisive in slowing down further China’s rapid speed in the Tech War.
Even that, though, is woefully insufficient. A good defense only works with a comparable offense. It is only with the combination of sanctions, tariffs, and indigenous high-tech production, that the Americans can comprehensively beat the Chinese. Or, at least, keep the Chinese in a distant second place. We resist bringing our technology production home at our peril.
A purely keep-away or Prevent-Defense strategy in the Tech War is a losing prospect. We are already seeing that play out. Time is running out to make America’s strategy more dynamic. As Donald Rumsfeld loved to say, “We are on notice, but we have not noticed.”
God help us if we wait another five years to make these critical adjustments to our grand strategy.
A 19FortyFive Senior Editor, Brandon J. Weichert is a former Congressional staffer and geopolitical analyst who is a contributor at The Washington Times, as well as at the Asia Times. He is the author of Winning Space: How America Remains a Superpower (Republic Book Publishers), Biohacked: China’s Race to Control Life (Encounter Books), and The Shadow War: Iran’s Quest for Supremacy (July 23). Weichert occasionally serves as a Subject Matter Expert for various organizations, including the Department of Defense. He can be followed via Twitter @WeTheBrandon.
