**Introduction** Big power competition between the United States and China has intensified over the past decade by evolving from targeted trade frictions into systemic rivalry across tariffs, advanced technology, industrial policy, critical supply chains, and global governance. Economic instruments are now embedded within national security and strategic frameworks, producing structural changes in trade flows, investment patterns, and institutional cooperation. **Contextual background** Since the mid-2010s, economic policy in both economies has increasingly incorporated resilience, technological self-reliance, and supply-chain security. Tariffs, export controls, industrial subsidies, and investment screening are deployed as tools of economic statecraft. At the same time, trade-restrictive measures have accumulated globally, and concerns about geoeconomic fragmentation have become more prominent in assessments of growth and trade stability[1][2]. **Drivers of intensified US-China competition** **1.** **Continued tariff measures and their effects on supply chains** The tariff escalation that began in 2018 marked a structural shift in bilateral trade relations. A substantial share of the additional duties remains in place, maintaining a higher effective tariff burden than in the pre-2018 period. The persistence of these measures has influenced firm behavior beyond immediate price effects. Companies have adjusted sourcing strategies, relocated segments of production, and diversified export markets to reduce exposure to tariff risk. Over time, these adjustments reshape investment incentives and entrench trade diversion. The result is a sustained decline in bilateral trade intensity in selected sectors and higher transaction costs across affected value chains[1]. **2.** **Expansion of advanced technology controls** Competition has intensified most sharply in advanced technologies, particularly semiconductors and high-performance computing. Controls now extend beyond final products to include semiconductor manufacturing equipment, advanced-node chips, and related technical services. These measures seek to limit access to capabilities with military and dual-use applications. Because semiconductor production relies on highly specialized and geographically distributed inputs, restrictions in one segment can affect the entire ecosystem. The outcome is partial segmentation of technology supply chains, with firms operating under distinct regulatory regimes and compliance requirements. This reduces cross-border technology diffusion and encourages parallel innovation trajectories[3]. **3.** **Industrial policy rivalry and subsidy expansion** Industrial policy has become central to strategic competition. Subsidies, tax credits, concessional finance, and local content requirements are used to expand domestic capacity in semiconductors, clean energy equipment, electric vehicles, and battery supply chains. Such measures influence not only individual firms but also the structure of entire production networks. China’s coordinated industrial ecosystem — based on scale expansion, integrated supply chains, and state-linked finance — has supported dominant positions in solar photovoltaic manufacturing and electric vehicle batteries. In parallel, US industrial legislation has sought to rebuild domestic semiconductor fabrication and clean energy manufacturing capacity. This interaction reflects competition between state-supported production ecosystems, increasing fiscal commitments and raising the risk of excess capacity and trade tension[1][4]. **4.** **Competition over critical minerals and upstream inputs** Rivalry has expanded upstream into critical mineral supply chains that underpin semiconductors, renewable energy systems, advanced batteries, and defense technologies. High concentration in processing and refining capacity creates strategic vulnerabilities during geopolitical stress. Policy responses include export controls, investment screening, stockpiling, and partnerships structured around trusted suppliers. These measures reorient trade along geopolitical lines rather than cost efficiency, contributing to supply-chain realignment. Such adjustments may enhance resilience but can also increase production costs and reduce global specialization, particularly in sectors central to the energy transition[2]. **5.** **Diverging trade rules and institutional tensions** Competition now extends to institutional governance. Divergent approaches to subsidy disciplines, digital trade regulation, and national security exceptions complicate multilateral rulemaking and enforcement. The accumulation of unilateral measures reduces predictability in the trading system and increases reliance on bilateral and plurilateral arrangements. Fragmentation scenarios suggest measurable output losses if competing regulatory and industrial blocs consolidate[2]. This governance dimension elevates rivalry from sectoral disputes to systemic contestation over rules and standards. **Conclusion** Over the past decade, US–China competition has deepened through sustained tariff barriers, expanded technology controls, intensified industrial subsidy programs, upstream competition over critical inputs, and widening differences in trade governance. What began as targeted trade disputes has evolved into broad geoeconomic rivalry that is reshaping supply chains, influencing investment allocation, and affecting the diffusion of advanced technologies. Economic interdependence remains substantial, but it is increasingly conditioned by security concerns and strategic alignment. The direction and management of this rivalry will play a central role in shaping global growth patterns, industrial structure, and the future stability of the multilateral trading system.
