The US-China Technology cold war: The race for global dominance
Date: July 2026
The AI race between the United States and China in sensitive industries considered in “the interests of national security” threaten the principles of free markets, global digital interconnectivity, and stifle Deep Tech innovation in the digital ecosystem.
The profound consequences of AI and Deep Tech strategic competition between the United States and China is evident in global market fragmentation, AI and Deep Tech protectionism and techno-nationalism serving the nation state for its geopolitical interests and geoeconomic ambitions in major power strategic competition.
The United States Policy of Technology Containment
Between 2017 and 2021, the Trump Administration issued eight executive orders that primarily involved China. The Trump Administration issued an additional seven executive orders that did not explicitly target China but affected key policy areas relating to the US-China relationship.
In addition to these fifteen executive orders, the United States - China Economic and Security Review Commission identified 116 China-related measures taken by the White House and other executive departments and agencies from 2017 to 2021.
In August 2017, President Trump directed the Office of the U.S. Trade Representative (USTR) to launch a Section 301 investigation into China’s intellectual property and technology transfer policies, in particular policies hindering the position of the United States as a world leader in R&D intensive high-tech products.
The USTR Section 301 investigation laid the political and legal groundwork for the sweeping tariffs and extensive restrictions that ignited the broader US-China technology war in 2018.
The consequent findings of the USTR investigation led to President Trump signing a Presidential Memorandum stating: “US intellectual property and trade secrets are being steadily stolen by China,” and imposed the early tranche of massive tariffs on imports from China, and discouraging Chinese investment into the United States.
The United States executed the following major economic countermeasures:
I. Four phases of Tariffs
The United States imposed tariffs ranging from 7.5 per cent to 25 per cent on approximately $370 billion worth of imports from China. The initial rounds primarily targeted tech-adjacent manufacturing sectors, including aerospace, machinery, and ICT hardware.
II. World Trade Organization Dispute
The United States initiated a formal dispute at the WTO challenging China’s tech-licensing regimes.
III. Investment Barriers
The U.S. Department of Treasury tightened regulatory reviews on Chinese capital coming into critical tech sectors.
It is during the first Trump Administration that the trade competition between China and the United States morphed into a strategic technological competition.
Under President Trump, the United States National Security Commission on Artificial Intelligence (NSCAI), an independent Federal Commission established by the U.S. Congress chaired by former Google CEO Eric Schmidt, was established in 2018 “to advance the development of AI, machine learning, and associated technologies to comprehensively address national security and defence needs”.
The NSCAI submitted its Final Report to President Joe Biden in 2021 and defined the “AI race” between China and the United States as a “value-based competition in which China must be seen as a direct competitor”.
In the final report, the NSCAI recommended the creation of “choke points” that limit Chinese access to American semiconductors to stall progress in critical areas of technological development (NSCAI, 2021).
The NSCAI Final Report urges a national strategy to “Defending America in AI Era” and “Wining the Technology Competition” by accelerating AI integration, investing in domestic semiconductor manufacturing, and strengthening tech talent.
President Joe Biden continued the policy of containment of China’s semiconductor manufacturing with the landmark The CHIPS and Science Act supported both by Democrats and Republicans.
With its foundation on technology protectionism, The CHIPS and Science Act enacted under President Biden has the primary objectives of reshoring semiconductor manufacturing, securing high-tech supply chains, and boosting domestic scientific research.
The CHIPS and Science Act marked a critical continuation in the United States’ industrial policy of maintaining technological leadership in the face of fast-growing competition from China.
More recently, the second Trump Administration has undertaken a zero-sum approach with aggressive decoupling and strict regulatory enforcement relying purely on unilateral economic pressure, tariff escalation, and targeted intellectual property crackdowns.
This is evident in leveraging advanced science and technology to maximise benefits for the United States in trade with China which include trade sanctions, investment control, export control, and restrictions on the exchange of technological personnel.
The most notable is the weaponisation of tariffs with the signing of a Presidential Order imposing tariffs on Chinese goods from a baseline 100 per cent to 145 per cent tariff on all Chinese imports implemented in April 2025.
The designation of China as a “strategic competitor” is a continuation of the first Trump Administration’s policy following the publication of its 2017 National Security Strategy and 2018 National Defense Strategy.
China’s Technology Ascent
The continuation of the United States' containment policies on China’s AI and Deep Tech industries have backfired and inadvertently accelerated Chinese self-reliance. The Sputnik Effect on AI Chips have seen the rapid development of China’s semiconductor industry.
Despite the imposition of Western tariffs by the Trump Administration and the European Union, China’s Electric Vehicles, Lithium-ion Batteries, Green Technologies, and Solar Panels have dominated global markets redirecting trade to Asia, Africa, and Europe.
Furthermore, China has been able to bypass United States’ export controls and trade restrictions to sustain its high-tech industries, and access to energy markets.
China leads the world in terms of scientific publishing in sixty-six out of seventy-four critical technologies, including robotics, generative AI, cloud computing, drones, small satellites, and nuclear energy.
China’s exceptional gains in high-impact research are continuing, and the gap between it and the rest of the world is still widening. In eight of the ten newly added technologies, China has a clear lead in its global share of high-impact research output.
The Chinese Academy of Sciences remains the world’s premier technological research institution, ranking first in thirty-one technologies.
Conclusion
The United States’ policy of containment toward China has fundamentally evolved from a Cold War-style military blockade into a modern doctrine of techno-resource containment.
Rather than a total economic cutoff, the strategy relies on a framework of "selective decoupling" designed to neutralise strategic vulnerabilities while preserving manageable yet uncertain bilateral trade.
The United States’ policy of technology containment on China will further undermine US-China relations on all fronts including trade, economic, diplomatic, and security relations; as well as science and technology and academic cooperation; global science and technology governance; and conflagrate the already tense US-China geopolitical rivalry in the Asia Pacific region.
The decoupling of certain US-China technological supply chains and value chains will be irreversible. Both the United States and China will continue to master technological protectionism and technological nationalism in order to advance and maintain technological hegemony in major power strategic competition.
We are living through the most consequential geopolitical realignment in our lifetime. The impact of the US-China technology competition is realpolitik in major power strategic competition.
The writing is already on the wall on how the US-China Technology Cold War is rebalancing global powers, reconfiguring the global economy, and reshaping the future of global stability.
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