The American decision comes at a very fragile juncture, considering the military tensions between China and Taiwan. Nancy Pelosi’s August visit to Taiwan only added to the existing mistrust between the two immensely dependent neighbours. China relies on Taiwan for its microchips in order to promote its technological edge while Taipei has found a huge market in Beijing for most of its products, making the trade war extremely detrimental to their respective economic well-being.

The impact of the ban does not remain limited to these two countries. The semiconductor industry is fragmented across the globe and its operation runs on a healthy supply chain. The ban will directly cause disruption to this well-integrated global supply chain which, according to economists, is bound to cost three to five times the American subsidies.

Apart from enormously increasing the costs worldwide, the ban will put China on a war-footing to achieve self-sufficiency in domestic semiconductor chip manufacturing, despite the initial hiccups. This might brutally backfire at the American intention of slowing down the Chinese race towards becoming a technological and military superpower. Another speculation is that the American administration has overestimated its clout in an increasingly multipolar world. The German premier has already declared that decoupling with the Chinese economy is an absurd idea and does not hold sufficient credibility. There is no guarantee that the rest of America’s allies will oblige, especially when addressing domestic issues has become a national priority in an increasingly populist governance model.

The recurring bitterness between nations as they scuttle to replace the existing powerful ones perpetuates the race, even as the finish line remains unclear. The intricate political and economic connections, supplemented with measures adverse to the national interests of others, create a paradoxical limbo. In this set-up, trying to intentionally harm another is akin to shooting oneself in the foot. The USA’s unprovoked erratic sanctions tend to destabilise the rhythm of trade the world has eased into. A more calculated measure with consensus from its European and East Asian allies might help alter the policy design for a mutually beneficial outcome. The wounded supply chains in the post-pandemic world continue to be ravaged by unforeseen disasters and conflicts. Amidst such circumstances, a trade war is not only diplomatically unsound but also detrimental to political and economic security.