Sanctions, Bans, And Tariffs How The U.S. Is Fueling Chinese Innovation

• Published date: 13 November 2025
• Law Firm: GGI Global Alliance
• Author: Bob Brewer ( Braumiller Law Group)

Just look at the current landscape of how China has been innovating through various trade related sanctions, bans, and tariffs. Just like dealing with lions, tigers and bears, oh my! Of course, in this case the scarecrow was the only one without a brain, so Dorothy, the lion, and the tin man had no excuse.

If they were Chinese, they would have surmised that the yellow brick road is not the only path to finding the little fat man behind the curtain, otherwise known as the wizard. Nope. They would have instead used high tech surveillance drones allowing them to bypass the flying monkeys and wicked witch. Probably would have found the wizard in a day. (Confused? See the movie The Wizard of OZ if you are young and live outside of the US) Necessity has always been the mother of invention, and in the case of China and the never-ending western pressure it has also been the catalyst in many cases for that which ultimately drives them to create and overcome. Let's look at just a few examples as there are too many for one article.

Advanced Microchips: The original Chinese chip ban via the U.S. and other nations in the mix, Netherlands, Japan and S. Korea, was a wakeup call to Beijing. However, after a few minutes of panic, they did what they always do, hyper focus on the problem, and innovate. Subsequently, most recently what was to be expected when the Trump Administration decided to allow NVIDIA and Intel to sell chips to China (the supposed lower end H20's from NVIDIA) didn't exactly happen the way they planned. The transactional arrangement provided the U.S. government with a 15% commission on the sale of the chips, and a huge bounty to be had as China would of course gobble them up as desperate as they are for the technology they lacked. Nope. Not what happened. Instead, Beijing banned companies from placing orders with NVIDIA. Whoops! If there is one thing that will come out of this chip war, it's that China is hell bent on becoming totally independent in the making of their very own advanced microchips, and I have absolutely no doubt that they will succeed in the very near future. As a matter of fact, they already have succeeded to a certain extent, and not through reengineering, but through reimagining the overall process of creating the most advanced chips.

To date, the U.S. has committed over $300 billion into microchip manufacturing and at the same time has blocked China from possessing the high-end lithography process (EUV) owned by ASML in the Netherlands. In addition to this agreement with ASML the U.S. and Taiwan's TSMC are trying to duplicate their exact production process in an Arizona desert and face the harsh reality of what that undertaking actually means step-by-step. It's a tough environment to reproduce the most advanced microchips on the planet that entails about 4,000 different crucial elements that go into the production of a successful "yield" of chips, meaning not one nano particle of dust or anything less than 100% ultra-pure water can enter the system. And the manufacturing of these high-end chips needs a great deal of water, in the desert no less. The duplication of the process has to be absolutely perfect or entire chip yields could be tainted, and subsequently trashed, costing millions of dollars. China is paying attention and is currently working with its top engineers to find a better way forward. Don't duplicate, instead, innovate. They have subsequently come up with a totally different process than the extreme ultraviolet of ASML and produced chips within the highly coveted 3nm makeup. Enter a totally self-sufficient ecosystem of producing chips from the rare earth minerals (which they have in abundance) in addition to some of the top engineers in the world (inclusive of some from ASML and the US).

The pecking order of who has the planet's most advanced chip making process is going to possibly be turned upside down. It's pretty evident that when China is faced with the west attempting to block their advancement on the world stage, they just keep coming back with innovations at breakneck speed. Yes, as previously mentioned, the US has an agreement with ASML blocking EUV machines from China, because that's the game plan. To get a...