The U.S. strategy in its intensifying technological competition with China has evolved into a sophisticated exercise in tactical diversification. From unilateral sanctions to the “small yard, high fence” doctrine, Washington has sought to mobilize a collective front to safeguard its technological edge. Yet, these efforts consistently encounter a structural ceiling. This failure is not a matter of tactical execution but is rooted in a fundamental divergence of interests within the international power hierarchy. While Washington, as a dominant power in relative decline, views the tech race as a bipolar zero-sum game dictated by relative gains in security, its middle-power allies remain anchored in the pursuit of absolute gains for economic interest. Consequently, Washington’s strategic adaptation fails to forge a monolithic denial regime, as it cannot offset the existential economic costs of decoupling for its partners.
The Logic of Strategic Misalignment
In the current international power hierarchy, the U.S. and its allies operate under divergent systemic pressures. For a dominant power facing a rising challenger of near parity, any technological advancement by China is perceived as a direct attrition of U.S. primacy in technology and military dominance, at worst. Given the threat posed by China to its dominance and security, the US considers its relative gains in security vis-à-vis China outweigh the potential absolute gain brought by partnering with China in a two-player zero-sum game. Under this securitized logic, denying China access to frontier technology aligns to its national interests.
Conversely, European allies are middle powers within the international system. As their power parity is incomparable to that of the US or China, they do not consider China’s rise an immediate security threat as the US does. Without the same relative-gains preponderance, middle powers’ behaviors are primarily driven by the absolute gains derived from deep economic interdependence. This structural reality facilitates a preference for strategic hedging. The EU’s view on China as “a partner for cooperation, an economic competitor, and a systemic rival” reflects the fact that the allies may not necessarily only eye the relative gains against China as the US does. Absolute gains between the US allies and China still exist. Besides, as articulated in Macron’s “Third Power” doctrine, Europe seeks to maintain “strategic autonomy”—a posture designed to avoid being subordinated to a Sino-U.S. systemic rivalry while safeguarding independent industrial interests. Macron’s view further illustrates that the European allies view the international system as a multipolar world that is not a zero-sum game. Hence, this divergence in power positions dictates an inevitable divergence in worldview and strategy; so long as the structural hierarchy remains misaligned, a synchronized tech alliance remains a geopolitical improbability.
The Failure of Unilateral Coercion: The 5G Precedent
The first Trump administration’s attempt to utilize unilateral coercion demonstrated the inherent limits of American pressure. The campaign to exclude Huawei and ZTE from allied 5G networks serves as a preeminent case study. Washington implemented comprehensive sanctions and pressured allies to follow these restrictions, even threatening to curtail intelligence-sharing. However, allies exhibited significant strategic inertia, prioritizing the absolute economic advantages of cost-effective Chinese infrastructure over U.S. security mandates.
The United Kingdom’s trajectory is illustrative of this friction. Despite intense U.S. lobbying, London initially resisted an outright ban, eventually opting for a seven-year grace period to remove Huawei components by 2027. Similarly, France avoided categorical exclusion, utilizing license expiration (set for 2028) to phase out equipment, while Germany delayed its removal process until 2029. Unlike the U.S., which provided congressional funding for immediate “rip and replace” operations, European capitals adopted a “soft approach” to insulate their commercial sectors from fiscal shocks—proving that unilateral coercion cannot harmonize policies when absolute gains are at stake.
The Economic Imperative: Semiconductors and AI
This strategic rift has persisted despite the Biden administration’s pivot toward multilateralism. Notwithstanding the establishment of the EU-U.S. Trade and Technology Council (TTC) in 2021, six ministerial meetings have failed to yield binding export control alignments or meaningful standardization. The divergence is most visible in the private sector, where the imperative of market entrenchment consistently eclipses the U.S. drive for technological containment.
While Washington has tightened restrictions on artificial intelligence and silicon carbide (SiC) technologies, European middle powers continue to facilitate technology transfers through business cooperation. German industrial giants such as Siemens and Mercedes-Benz have deepened collaborations with Alibaba and ByteDance on industrial AI ecosystems. Most notably, STMicroelectronics—jointly controlled by the French and Italian governments—formalized a $3.2 billion joint venture with Sanan Optoelectronics for a SiC wafer facility in Chongqing in 2023. These projects underscore the structural ceiling: even in sensitive dual-use sectors, the promise of absolute gains from the Chinese market outweighs the incentives for transatlantic synchronization.
Trump 2.0: Coercive Hybridity and the Subsidies Race
Under the second Trump administration, U.S. strategy has mutated into a form of coercive hybridity. Washington now employs a “carrots and sticks” approach, utilizing frameworks like the Pax Silica Declaration to entice allies with mineral security while introducing bills to pressure allies, such as Japan and the Netherlands, to impose stricter export control of semiconductors and relevant equipment to China.
However, these intensified measures have ironically fuelled further fragmentation. The U.S. CHIPS Act, with its $39 billion in direct subsidies, has been perceived not as a collective shield, but as a protectionist instrument. This prompted the EU to introduce its own EU Chips Act to compete for technological sovereignty. Rather than a unified front, the transatlantic relationship is increasingly defined by industrial competition.
Conclusion: A Coalition of the Unwilling
The “structural ceiling” of allied interests ensures that Washington’s technology strategy will continue to face systemic resistance. Given the inherent differences in their power positions, middle-power allies will remain more concerned with the absolute gains of economic cooperation than the relative gains of a technological blockade. Disputes and conflicts are not anomalies but inherent features of this misaligned alliance. As Germany, the UK, and France continue to pivot toward autonomy, the prospect of a truly synchronized U.S.-led tech regime remains an elusive goal in an increasingly multipolar world. Washington may find itself leading not a unified phalanx, but a fragile coalition of the unwilling.
