Throwing sand on the chips

Export controls are central to US-China technological competition. We examine their short-term direct effects on US exports and indirect effects on third countries' exports. Using data on unilateral US measures targeting semiconductor products exported to China, merged with monthly trade data from production chain participants, we find two key results. First, US chip exports declined significantly. Second, EU, Japan, and Singapore exports of semiconductor manufacturing equipment increased significantly. This evidence suggests limited indirect enforcement of US policies abroad and reveals unintended consequences: unilateral export controls may redirect supply chains rather than constrain them, potentially undermining policy objectives while benefiting competing exporters.