Today, I had the pleasure of speaking to Paul Triolo on a host of things. We actually have been talking to each other for a while offline, but I finally got a chance to speak to him in a person today and it was great. And as you will hear in this podcast, we are nowhere close to being finished. I will definitely have Paul back on the show to talk about semiconductor industry in the future.

I think it was great to hear from him on just how this China/USA tech competition started and his experience through all of this as someone who first spent time in China in the late 80s! Ever since, he has always taken a very fair and thoughtful role in being vocal about the importance of China/US ties in the media.

But I guess the focus of our talk today was on how the October surprise sanctions came about and the rationales behind these decisions. And I think it’s important for people to remember that while Biden started all these sanctions, the brunt of Chinese retaliations did not hit until 2025 after Trump started his tariff war. The reason is that export control regimes take time to develop. While America is the master of this art, China hasn’t been that involved in tech export controls (especially on supply chain side & extra-territorial) until the wake-up call from Biden sanctions.

The vast majority of the DC crowd simply did not ever think there would be consequences to their actions, so there was apparently very little cost-benefit analysis when these decisions were made in the first place.

We didn’t really get into the semi industry part of this which will be fun to talk about next time. We did talk a lot about critical minerals and Paul has actually worked with American customers of Chinese Rare Earth magnet customers as well as Indium. We talked about why Coherent visited China with Trump this time.

We also talked about why the Chinese Rare Earth retaliations only came around when the trade war started. Simply put, China just had not developed the same type of export control back in 2022. It only ramped up building these export control policies after it suffered from them. So, I think Trump was just unlucky that he was the one that got hit hard by them. Those controls were actually in retaliations for 3 years of US export controls prior to Trump admin.

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