US-China tech “Cold War” is on

A CPU semiconductor chip is displayed among flags of China and the US.
A CPU semiconductor chip is displayed among flags of China and the US.
REUTERS/Florence Lo

The best fallacies stem from kernels of truth. In the case of what is being framed by some as the US-China “Cold War,” that kernel lies in the tech sector, where competition between the world’s two largest economies is fierce. The Biden administration has been increasingly clear that it is intent on slowing down China’s technological rise, and has centered its efforts toward decoupling — a low-grade form of economic warfare.

The rivalry has been bubbling for years, as US national security officials worried that Chinese tech firms were stealing intellectual property from American companies and data from US citizens. It spans from crucial sectors like software and semiconductors, where the US is fighting to maintain its competitive advantage, to industries like electric vehicles, smartphones, and drones, where China has the edge (maybe AI too).

China’s technological rise can be attributed to its skilled and lower-cost workforce and its ability to subsidize domestic companies and push out Western rivals. As a result, Chinese companies lead the world in smartphone sales, especially in Asia and Africa, and Huawei dominates the (non-Western) telecommunications sector.

Alarmed by the mounting competition, the Biden administration’s decoupling strategy has taken the form of tariffs, export controls, investment blocks, and visa limits. It has also put pressure on its allies to ban Huawei from the 5G networks. Washington has dramatically expanded its control over tech flowing to Beijing and imposed aggressive sanctions on China’s chip and semiconductor industry.

Yet, the costs of decoupling may outweigh the gains. It won’t cripple China’s tech sector, but merely “slows down China at the cost of hurting US companies at the same time,” says Eurasia Group expert Xiaomeng Lu.

One way the US-China tech race could acquire Cold War vibes is by creating a bipolar world where Chinese technology reigns supreme in Asian and African nations but is blocked from the West. The US weighing a TikTok ban is a step in this direction, and US tech giants like Twitter, Google, and Facebook are already unavailable in China.

What’s more, social media is likely only the first step of the US-China decoupling. In 2020, the State Department launched a plan to block out any connection to China, including telecommunications networks, mobile apps, cloud services, and even the undersea cables that carry web data between nations.

More from GZERO Media

US President Donald Trump speaks to reporters aboard Air Force One after departing early from the the G7 summit in Canada to return to Washington, D.C., on June 17, 2025.
REUTERS/Kevin Lamarque

US President Donald Trump’s “Liberation Day” tariffs prompted warnings of high inflation, but it never materialized.

More than 60% of Walmart suppliers are small businesses.* Through a $350 billion investment in products made, grown, or assembled in the US, Walmart is helping these businesses expand, create jobs, and thrive. This effort is expected to support the creation of over 750,000 new American jobs by 2030, empowering companies like Athletic Brewing, Bon Appésweet, and Milo’s Tea to grow their teams, scale their production, and strengthen the communities they call home. Learn more about Walmart's commitment to US manufacturing. *See website for additional details.

Last month, Microsoft released its 2025 Responsible AI Transparency Report, demonstrating the company’s sustained commitment to earning trust at a pace that matches AI innovation. The report outlines new developments in how we build and deploy AI systems responsibly, how we support our customers, and how we learn, evolve, and grow. It highlights our strengthened incident response processes, enhanced risk assessments and mitigations, and proactive regulatory alignment. It also covers new tools and practices we offer our customers to support their AI risk governance efforts, as well as how we work with stakeholders around the world to work towards governance approaches that build trust. You can read the report here.