Over the years, the tech race has massively intensified with the United States, the EU and China enacting a variety of trade restrictions on tech exports. Such competitiveness is not without global implications, reshaping the supply chains across nations and economic partnerships across continents. This rivalry has hugely escalated in 2024 with the USA and the EU continuing sanctions to limit Chinas access to sensitive technology, a move intended to limit Chinese military and economic accessibility.
THE U.S.-China Divide in Technology and Trade
The US has been at the frontlines in limiting Chinas access to technology with national security cited as a main concern. The Americans have imposed sanctions targeting Chinese tech companies tied to AI, 5G and semiconductor manufacturing.
This restriction is mainly designed to prevent the Chinese from obtaining tech that could enhance its military capabilities as seen with ongoing US export controls on advanced chips. In response to the American restrictions, the Chinese have ramped up their own production capacity, pushing for technological self-sufficiency in semiconductors alongside other important areas.
The EU’S Strategic Balancing Act
The EU faces its own problems amongst the hostile competitiveness between the Chinese and Americans, balancing economic ties with China and security interests with the US.
In 2024, the EU increased their export restrictions on tech that was deemed sensitive, aligning with the United States in countering the rising influence of China in fields like quantum computing and AI.
However, the approach of the EU can be seen as more cautious as the continent heavily relies on China for raw materials and as a huge export market. Their stance could determine the future of the EU in the “tech cold war” as they seem to seek to maintain trade relations while also safeguarding their own tech advancements form the likes of China.
Global Supply Chains and Economic Fallout
Disruptions to the Global Supply Chains have become almost inevitable as the “tech cold war” persists. Many tech companies have been forced by restrictions to shift production or sourcing to other nations, less impacted by US-China tensions. Southeast Asian nations, such as Vietnam and Malaysia have emerged as strong alternatives for tech companies.
Whilst this shift has its own risks, it also increases costs, impacting almost everything from consumer electronics to automotive production worldwide.