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Raimondo Called Holding China Back on Chips a “Fool’s Errand”—But She Wasn’t Rejecting Export Controls

Gina Raimondo said permanently holding China back in semiconductors was a “fool’s errand.” The policy distinction is between targeted delay and permanent containment.
From TheFinanceBase Team6 min to read
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Gina Raimondo’s December 2024 warning was about permanent containment, not abandoning every restriction. The then-U.S. Commerce secretary argued that export controls could slow China’s access to frontier chips and equipment, but only sustained American investment, research and innovation could preserve a lasting lead.

The distinction matters: a policy can delay a rival without stopping it. Raimondo’s reported position was that Washington should use controls as a targeted “speed bump” while making the United States run faster through the roughly $53 billion semiconductor program in the CHIPS and Science Act.

What Raimondo actually said

The Wall Street Journal report dated December 22, 2024, attributed the phrase “trying to hold China back is a fool’s errand” to Raimondo, who was approaching the end of her tenure as Commerce secretary. The remark came during the final weeks of the Biden administration, not as a new statement by a sitting secretary in 2026. The report was indexed by Techmeme, with additional discussion published by SoylentNews.

“Holding China back” referred to efforts to prevent China from catching up in advanced semiconductors and related manufacturing technology. U.S. measures covered advanced AI and high-performance-computing chips, semiconductor-manufacturing equipment, design and production software, and Chinese companies subject to export restrictions or Entity List rules.

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Her point was narrower than “controls are useless.” As contemporary reporting summarized it, restrictions might slow China and make progress more expensive, while the United States still had to innovate faster. Sina Finance’s account of the interview described the emphasis on staying ahead rather than assuming controls could halt China indefinitely.

The apparent contradiction in Biden policy

Raimondo helped implement export controls while also promoting domestic semiconductor investment. That was a two-track strategy, not necessarily a reversal:

Track Purpose What success would look like
Targeted denial and delay Limit access to the most sensitive chips, equipment and software. China takes longer, pays more or has less access to frontier military, AI and supercomputing capabilities.
Domestic acceleration Expand U.S. manufacturing, research, talent and supply-chain resilience. American firms retain a technology, production and commercialization lead even as China develops substitutes.

Under that framework, controls buy time; investment determines whether the United States uses the time effectively. Raimondo’s “fool’s errand” formulation applies to the ambition of permanently stopping a large, well-funded country from developing semiconductor capabilities, not automatically to every narrowly designed restriction.

Why permanent containment is unrealistic

China has a large domestic market, state-backed financing, engineering talent and powerful incentives to replace foreign suppliers. Restrictions can raise barriers, but they cannot erase the knowledge already circulating in the industry or prevent every route to substitution.

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  • Companies can redesign products around less restricted components.
  • Manufacturers can stockpile equipment and chips before rules tighten.
  • Supply may move through intermediaries, brokers or third countries, creating enforcement challenges.
  • Older-generation equipment and chips remain useful in cars, appliances, telecommunications and industrial systems.
  • Restrictions can encourage Chinese spending on domestic alternatives and reduce dependence on U.S. suppliers.

That does not establish that China has matched the United States, Taiwan or the Netherlands at the technological frontier. It means “China can still make progress” and “China has achieved broad parity” are different claims.

What export controls can still accomplish

Judged as a permanent containment strategy, controls are unlikely to succeed. Judged as a delay-and-denial instrument, they can be strategically valuable.

  • Delay frontier capability: Slower access to leading AI accelerators, high-performance computing and advanced fabrication tools can matter in military planning and technology races.
  • Raise cost and complexity: Replacing restricted equipment, software or components requires money, engineering time and often lower yields or smaller production volumes.
  • Protect specific applications: The relevant question is not whether China can make any chip, but which chips it can make, in what volume and for which military, surveillance or AI uses.
  • Buy time for the United States and allies: A delay has value only if Washington uses it to expand capacity, research and talent.
  • Reduce exposure to sensitive supply chains: Restrictions can limit dependence on Chinese production in strategically important areas.

The strongest test is counterfactual: would China have developed a capability faster, more cheaply or at greater scale without the controls? Continued progress alone cannot answer that question.

Why Raimondo emphasized the CHIPS and Science Act

The CHIPS and Science Act, signed in 2022, created a broad industrial-policy framework for U.S. semiconductor manufacturing, research and workforce development. Contemporary coverage commonly described approximately $53 billion in semiconductor incentives and research support; that figure should not be read as $53 billion paid solely to build factories. Asia Times summarized Raimondo’s argument and the figure.

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The semiconductor-related effort combines several functions:

  • Incentives intended to attract and expand chip manufacturing in the United States.
  • Research and development support for semiconductor technology.
  • Workforce and training initiatives.
  • Public funding designed to draw in private capital.
  • Broader science and technology provisions in the law beyond direct fab subsidies.

Investment is not an automatic win. New plants still face construction delays, labor shortages, high power and water needs, yield problems, expensive operations and dependence on international suppliers. A factory can expand capacity without guaranteeing leadership in process technology, advanced packaging, memory, design software or commercially viable products.

What evidence showed that China was adapting

Contemporary reports cited Huawei’s smartphone technology and the expansion of domestic suppliers such as Phytium and Loongson as evidence that restrictions had not stopped Chinese development. Yahoo Finance discussed those companies and domestic adoption. Such examples demonstrate progress in particular products or customer segments; they do not prove comprehensive independence or technological parity.

China’s response also included substitution, redesign, stockpiling and efforts to obtain alternatives through less direct channels. Global Times reported on domestic demand and responses to U.S. restrictions. Circumvention is therefore an enforcement problem, not proof that every restriction had no effect.

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Why the chip category matters

“China’s chips” is too broad a category for a useful policy verdict. Frontier logic and AI accelerators pose different security questions from mature-node chips used in vehicles or appliances. Equipment can matter as much as the chip itself: lithography, inspection, metrology, deposition, etching, packaging and design software are produced across a multinational supply chain.

Nor does a process-node label settle the question. Yield, cost, volume, packaging, memory, software compatibility and reliability determine whether a design can be deployed at scale. One product launch or technical milestone cannot establish broad parity.

The strongest case for each side

Why Raimondo’s warning is persuasive

  • China has the resources and incentives to pursue domestic substitutes for decades.
  • Controls alone do not create American factories, researchers or commercial products.
  • Lost sales in China can reduce revenue that U.S. companies use for research and development.
  • Overly broad rules may encourage customers to replace U.S. suppliers with non-U.S. alternatives.

Why controls remain defensible

  • Frontier delays can have disproportionate value for military systems, AI and supercomputing.
  • Higher costs and weaker access can limit the scale or speed of Chinese deployment.
  • Restrictions can protect particularly sensitive designs and equipment while the United States expands its lead.
  • Coordinated controls can reduce strategic dependence on Chinese supply chains.

How to judge whether the policy worked

The answer depends on the objective:

Objective Reasoned assessment
Stop China from making semiconductors Unrealistic. China has too much capital, demand and technical motivation.
Delay China at the frontier Plausible, but the effect must be measured against what would otherwise have happened.
Protect U.S. leadership Requires manufacturing, R&D, talent, infrastructure and commercialization—not controls alone.
Reduce national-security risk Assess specific military, AI, surveillance and high-performance-computing capabilities rather than “chips” in general.
Improve economic resilience Balance security gains against lost sales, weaker scale and incentives for customers to diversify away from U.S. suppliers.

Bottom line

Raimondo was not conceding that China had caught up, nor admitting that every Biden-era control was mistaken. Her warning was that permanently preventing Chinese semiconductor development is an unrealistic goal. Export controls can still delay frontier capabilities, raise costs and protect specific applications—but they are a complement to U.S. technological leadership, not a substitute for it.

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