The dispute over Huawei’s access to TSMC has highlighted how vulnerable American industry is to the loss of its sole supply of advanced chips. If the matter cannot be solved by negotiation, China may perceive the restrictions as economic warfare and rapidly escalate, potentially threatening Taiwan. It is not at all clear that Washington has thought through the consequences of its actions here, nor that the current administration has considered chip supply as part of a wider supply chain security and national industrial policy. Given that China has more positive options than the United States, it is surely time for those in charge to consider where this might lead.

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