>But longer term it creates a trend in which Armerican companies themselves will struggle in China. So what? Well, China will overtake the US so ultimately the US will have a disadvantage in the world's top market.
The Chinese market was never actually open to American companies. Not long term. They may have had temporary success but the CCP's goal was always to displace and replace with their own domestic competitors.
While the Chinese market may be close off to the US and foreign companies, the world market is greater than just the Chinese market and the American markets. For example, American companies are doing well in India, a market which is increasingly becoming closed to China due to geopolitical tensions.
Currently the US sell for $70b worth of semiconductors to China annually, that's 36% of all US chip sales [1]
Of course, any government's goal should be to diversify and not to be too dependent on a single country (like China is dependent on the US at the money). But that indeed should something for the Chinese government to worry about and, arguably, not for the US to force their hand in a move that will actually benefit China in the long term.
The Chinese market was never actually open to American companies. Not long term. They may have had temporary success but the CCP's goal was always to displace and replace with their own domestic competitors.
While the Chinese market may be close off to the US and foreign companies, the world market is greater than just the Chinese market and the American markets. For example, American companies are doing well in India, a market which is increasingly becoming closed to China due to geopolitical tensions.