The US is hell-bent on stymieing China’s semiconductor ambitions and thereby impeding one of Xi Jinping’s top domestic priorities.

It seems like we’ve all read this story multiple times by now, and in a sense we have. The latest version says Donald Trump’s leaning even harder on America’s allies to, among other things, suspend upkeep on chip-making equipment in China.

The goal, obviously, is to render that equipment not so much obsolete as unavailing due to disrepair. The push, like a similar effort undertaken by the Biden administration, depends heavily on the Dutch and their willingness to compel ASML’s participation in America’s bid to throw a wrench in Xi’s works, almost literally. Trump’s making similar demands of Tokyo Electron.

The recycled semi news comes as the Trump administration works to further restrict US investment in sensitive areas of the Chinese economy, including and especially semis and anything to do with AI. The White House is also set to declare a Chinese monopoly over global shipping — and America’s intent to tax that monopoly.

Washington’s crusade to slow China’s chip buildout took on a new sense of urgency last month, when AI startup DeepSeek claimed to create a highly capable chat model on a shoestring budget and without access to the most advanced Nvidia chips. Those claims may or may not be entirely true, but the development was treated as a watershed moment all the same.

The figure above shows you what DeepSeek accomplished if you take the company’s word for it, which you absolutely shouldn’t.

Regardless of the veracity of DeepSeek’s claims, America’s opening the door to ironic outcomes. The harder the US tries to limit China’s access to the latest technology and choke off capital flows to the country’s chip industry, the more innovative Chinese firms will need to be, which could mean more DeepSeek moments brought to you, accidentally, by American capriciousness.

That said, you can’t trust Xi with — well, with anything, let alone powerful AI that can be harnessed for military, espionage and policing purposes. So any US administration has little choice but to pursue policies aimed at slowing China’s progress even if such efforts prove futile or counterproductive.

Remember: DeepSeek isn’t the first example of a Chinese firm claiming to have innovated its way around US restrictions. In August of 2023, Huawei stunned the American tech community with the “Mate 60 Pro,” a device capable of feats which appeared to exceed what should’ve been possible given US tech curbs.

It’s worth noting that fund managers turned more bullish on the Chinese economy this month, with nearly half expecting quicker growth this year. As BofA’s Michael Hartnett noted, February’s improvement (illustrated on the left, below) “is the first outside of any policy stimulus announcement in the past three years, suggesting a ‘DeepSeek effect.'”

At the same time, survey panelists said a China growth surprise would be the most bullish factor in 2025, followed by AI productivity gains. And nothing would be more conducive to such gains than bargain-basement AI that’s as capable as it is cheap.

Anyway, “tough on China” remains among the only issues of consequence that enjoys genuine bipartisan support in Washington, and increasingly, “tough on China” means embracing and adopting policy prescriptions designed specifically to knee-cap Chinese chip development.

Hanging over all this is TikTok, which Trump seems determined to keep alive in the US so he can buy it through arm’s length American intermediaries. China understandably doesn’t want to sell it because… well, we can debate the “because,” but suffice to say both Xi and Trump understand TikTok’s value as a data collection tool and a platform through which the American public can be monitored and manipulated.