In October 2022, the United States rolled out sweeping restrictions on advanced semiconductor exports to China. The move was not a tariff. It was not a sanction in the traditional sense. It was something more surgical—an attempt to freeze an adversary's technological trajectory by cutting off access to the tools needed to build cutting-edge chips.

Export controls have existed for decades, but their role has fundamentally shifted. What began as Cold War nonproliferation instruments—designed to keep nuclear and missile technology out of hostile hands—have become the sharp edge of great power economic competition. Today, they target artificial intelligence accelerators, lithography machines, and quantum computing components.

This transformation matters because it rewrites the assumptions underpinning global trade. For thirty years, the prevailing logic held that economic interdependence would moderate geopolitical rivalry. Export controls represent a decisive break from that logic. They are the clearest signal that major powers now view certain economic relationships not as stabilizing bonds but as strategic vulnerabilities to be managed.

The modern export control system was built in layers. During the Cold War, the Coordinating Committee for Multilateral Export Controls—known as CoCom—united Western nations around a shared goal: deny the Soviet bloc access to militarily relevant technology. It was blunt, broad, and effective enough for a bipolar world with clear adversary lines.

After the Soviet Union collapsed, CoCom gave way to the Wassenaar Arrangement in 1996, a broader multilateral framework covering conventional arms and dual-use technologies. Other regimes like the Nuclear Suppliers Group and the Missile Technology Control Regime addressed specific proliferation risks. These systems operated on consensus among like-minded states, and they were designed primarily to prevent the spread of weapons of mass destruction—not to shape commercial competition.

The critical shift came when major powers—principally the United States—began layering unilateral controls on top of these multilateral frameworks. Washington's Entity List, administered by the Bureau of Industry and Security, allows the U.S. to restrict exports to specific foreign companies without needing multilateral agreement. This tool has expanded dramatically since 2018, targeting hundreds of Chinese firms across semiconductors, AI, surveillance technology, and supercomputing.

The architecture now reflects a hybrid system. Multilateral regimes still exist, but the decisive action happens unilaterally or in small coalitions. The U.S. has pressured the Netherlands and Japan—home to ASML and Tokyo Electron, makers of essential chipmaking equipment—to align their controls with American policy. This coalition-building approach bypasses the slow consensus of formal regimes while creating de facto multilateral restrictions among the nations that matter most for the targeted supply chains.

Takeaway

Export controls have evolved from collective nonproliferation tools into unilateral instruments of strategic competition—and the nations that control critical supply chain nodes hold disproportionate leverage regardless of formal multilateral agreements.

The strategic logic of modern export controls rests on a deceptively simple insight: not all points in a supply chain are equal. Some nodes are so concentrated, so technically difficult to replicate, that controlling them gives you leverage over entire downstream industries. Policymakers call these chokepoints, and identifying them has become a core discipline of economic statecraft.

The semiconductor supply chain offers the clearest example. There are thousands of companies involved in chip design, fabrication, packaging, and testing. But extreme ultraviolet lithography—the technology needed to manufacture the most advanced chips—depends on a single company: ASML in the Netherlands. The specialized chemicals, optics, and light sources required are themselves produced by a handful of firms. By restricting access at this one bottleneck, export controls can constrain an entire nation's ability to produce frontier semiconductors without disrupting the vast majority of global chip trade.

This precision matters economically. Broad trade restrictions—like sweeping tariffs—impose significant costs on the restricting country's own consumers and businesses. Chokepoint controls aim for asymmetric impact: maximum disruption to the target with minimal blowback to the initiator. The U.S. restrictions on advanced chips, for instance, initially carved out exemptions for less sophisticated semiconductors that American firms sell profitably to Chinese customers.

But chokepoint strategy carries a deeper risk. By revealing exactly where the leverage lies, you also reveal exactly where adversaries need to invest to break free. Every restriction is simultaneously a strategic signal and a roadmap for the target's industrial policy. The more precisely you target a chokepoint, the more precisely your competitor understands what capability gap to close.

Takeaway

Chokepoint controls trade breadth for precision, maximizing strategic impact while minimizing economic self-harm—but every chokepoint exploited is also a chokepoint your adversary now knows it must build around.

No country absorbs export controls passively. China's response to U.S. semiconductor restrictions has followed a predictable but consequential pattern: accelerate domestic substitution, diversify suppliers, and impose reciprocal costs. Beijing has poured billions into its domestic chip industry through subsidies, state-directed investment funds, and aggressive talent recruitment. Huawei's development of the Kirin 9000s processor—fabricated domestically by SMIC using older-generation equipment—demonstrated that progress, however imperfect, is possible under pressure.

Targeted nations also exploit the restrictions' economic seams. China has restricted exports of gallium, germanium, and antimony—critical minerals used in semiconductor manufacturing, defense systems, and solar panels—where it holds dominant global market share. This is not symmetrical retaliation in the same technology; it is lateral escalation, imposing costs on different links in the restrictor's own supply chains.

Alternative sourcing is another response vector. Nations under restriction seek technology from countries outside the control coalition, cultivate relationships with firms willing to navigate gray areas, and invest in building parallel supply chains with partners who share their strategic interests. Russia's wartime procurement of Western-origin microelectronics through third countries illustrates how controls leak without rigorous enforcement across all potential transshipment points.

The long-term effect may be the most consequential: export controls accelerate the fragmentation of the global technology ecosystem into competing blocs. Each round of restrictions and counter-restrictions widens the gap between interdependent and bifurcated models of technological development. The question policymakers face is whether the near-term strategic advantage of controls outweighs the long-term cost of a permanently divided innovation landscape.

Takeaway

Export controls do not eliminate capability—they buy time. The strategic question is always whether the restricting power uses that time more effectively than the targeted nation uses the urgency restrictions create.

Export controls represent a fundamental reordering of the relationship between trade and security. The old assumption—that economic integration makes conflict irrational—has given way to a harder calculus where technological access is itself a security variable.

The architecture is still evolving. Unilateral controls, coalition-based restrictions, and retaliatory counter-measures are shaping a new and unfamiliar international economic order—one defined less by open markets than by managed dependencies and strategic denial.

What remains uncertain is the equilibrium. Every control tightened creates incentives for workarounds, domestic innovation, and bloc formation. The competition is not over who restricts most effectively, but over who adapts fastest in a world where technological self-sufficiency has become a strategic imperative.