US Commerce Secretary: “Trying to hold China back is a fool’s errand”

Export restrictions aimed at slowing China’s progress are largely ineffective, outgoing US Commerce Secretary Gina Raimondo told the Wall Street Journal. Equating export controls with mere “speed bumps” in China’s push in semiconductor technology, Raimondo favors accelerating innovation in the US instead. “Trying to hold China back is a fool’s errand,” she said in the interview. “The only way to beat China is to stay ahead of them. We have to run faster, out-innovate them. That’s the way to win.”

In the Biden administration, Raimondo was involved in both expanding export controls and passing a 53-billion-dollar innovation stimulus package, the US Chips and Science Act. While incoming President Trump is likely to uphold trade curbs, he’s signaled that he’ll halt subsidies to the semiconductor industry, leveraging import tariffs instead to entice chipmakers to build fabs on US soil.

In a recent interview with Dutch daily NRC (link in Dutch), ASML CEO Christophe Fouquet said that the export ban of EUV equipment leaves China’s semiconductor industry 10-15 years behind the West. According to him, that ban is “quite effective.”