China

The EU’s Tech Sovereignty Package seeks to reduce reliance on American technology, but by restricting access to the firms driving innovation in cloud computing, semiconductors, and AI infrastructure, it risks weakening Europe’s competitiveness and strengthening China’s position in the global tech race.

As Daniel Castro writes in Tech Policy Press, U.S. export controls were intended to preserve America’s AI lead, but by accelerating China’s push for technological self-sufficiency and strengthening competing AI ecosystems, they may be undermining that goal.

Chinese industrial policy is reshaping global manufacturing and impacting every U.S. state. The result is growing risk to American industry, jobs, and national security.

After meetings in Beijing, Trump should judge every proposed techno-economic and trade deal on one question: Does it strengthen or weaken China’s national power industries, especially vis-à-vis the United States?

While the U.S. invests heavily in AI competitiveness at home, discriminatory foreign regulations are systematically weakening American tech firms abroad, diverting resources from innovation to compliance and ceding ground to China's state-backed AI sector.

The lessons of America’s worst trade decision remain unlearned.

China has overtaken the United States in R&D investment for the first time amid slowing U.S. R&D growth. Without stronger policy action, America risks falling further behind.

When U.S. technology companies compete in China, they capture revenue, learn technologies and trends from a critical market, and extend U.S.-built ecosystems. Forcing them out of China would weaken U.S. global competitiveness and give Chinese firms greater scale to shape technology ecosystems.

In 2024, researchers and scientists in China were responsible for developing more than 1,250 new drugs, more than the EU and just slightly less than the United States, which developed 1,440. In total, China developed 30 percent of the world's new innovative drugs.

It is easy to be frustrated with the Chinese government and its use of merger and acquisition controls to limit the competitive advantage of American tech firms. But many policymakers in the West have enabled China’s success by weaponizing antitrust and competition laws to kill pro-competitive deals by Big Tech firms.