The rumbling trade war between the US, China and the EU took a new twist this week. It emerged that if China were to invade Taiwan, which manufactures the world’s top-end computer chips, Taiwan would be able, remotely, to disable the machines that made the chips, curtailing China’s ability to access and manufacture them.

Bloomberg reported that the Dutch-based ASML, the only producer of the machines that make the most advanced semiconductors, and its largest customer, Taiwan Semiconductor Manufacturing Company (TSMC), had confirmed to the Dutch government that this could be done. The Netherlands , it reported, had been carrying out simulations on what would happen were China to invade.

The significance of this is that there is a US ban on exporting the highest specification chips to China because they can be used for military purposes. ASML, which is Europe’s most valuable company, does not sell the machines that make them to China and the aim was to reassure the Biden administration that it cannot seize the technology by force.

Access to advanced chip technology is just one front in what is becoming an increasingly acrimonious trade battle between the US and China, a fight into which the EU is gradually being drawn.

There are many different aspects to the conflict and the difficulty is to distinguish what is really significant and what is just sniping. But the broad facts are well known. China is the world’s largest manufacturer and the largest exporter of goods, passing the US and Germany around 2008. That growth took off after China joined the World Trade Association and was supported by successive US administrations, which considered trade as the best way of binding China into the Western economic system.

But that policy had the effect of China........

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