Harbin Researchers Sidestep US Sanctions as China’s EV Exports Hit a Standstill in 2025

Key Takeaways

• U.S. sanctions restrict the sale of Extreme Ultraviolet (EUV) lithography equipment to China.
• However, researchers at the Harbin Institute of Technology recently developed a new way of generating EUV light.
• After years of double-digit growth, Chinese electric vehicle exports are expected to stall in 2025.

Efforts to curb Chinese manufacturing and technology dominance have opened up two distinct fronts in a simmering trade war that is likely to escalate under Donald Trump.

On the one hand, tariffs and duties impact what countries buy from China, while export controls restrict what they sell. However, after several years of rising trade friction, the two strategies have delivered mixed results.

Have Export Restrictions Failed?

Although the policy of restricting technology exports to China has its roots in Trump’s first term, Joe Biden introduced the strictest sanctions.

Facing the threat of an ascendant Chinese semiconductor industry, the U.S. has imposed significant restrictions on sales of chips and chip-making equipment to Chinese firms. 

But recent breakthroughs in semiconductor manufacturing suggest American sanctions may have backfired by driving Chinese researchers to develop new processes that don’t rely on Western technology. 

EUV Lithography

Recent advancements in Lithography may prove critical in promoting Chinese technological sovereignty.

At the center of the latest breakthrough is a manufacturing process known as Extreme Ultraviolet (EUV) lithography.

In the world of chip-making EUV lithography is essential for printing the minute circuits that distinguish the most advanced components. 

While Chinese firms are adept at lower-resolution Deep Ultraviolet (DUV) lithography, they are barred from buying EUV equipment exclusively manufactured by the Dutch company ASML. 

Without access to ASML’s EUV machines, the technology has been off-limits to Chinese chip-makers, limiting their ability to manipulate silicon at the sub-7nm scale. 

However, researchers at the Harbin Institute of Technology recently developed their own way of generating EUV light.

The Harbin Breakthrough

Led by Professor Yongpeng Zhao, the Harbin researchers have taken a different approach to EUV lithography than ASML.

Once refined and scaled, their process could significantly lower technological barriers and pave the way for lower-cost, more efficient manufacturing techniques.

The research is the latest in a string of Chinese innovations that have been driven by necessity following U.S. sanctions. Others include the development of new DUV processes that let chipmakers produce higher-resolution circuits with more widely available equipment.  

Meanwhile, recent AI breakthroughs are arguably a direct result of U.S. sanctions that forced Chinese startups to prioritize hardware efficiency and think outside of the box.

If the purpose of U.S. sanctions was to curb the advancement of China’s domestic semiconductor industry, recent innovations suggest the strategy may have had the opposite effect. 

However, export controls are only one part of a two-pronged strategy to limit Chinese influence. The other is tariffs, which early signs suggest might be working. 

EV Slowdown 

After decades of mostly unopposed trade liberalization that helped fuel China’s manufacturing boom, growth may hit a wall in 2025. 

Facing the threat of U.S. tariffs, many industries are vulnerable, arguably none more so than the automotive sector, which in China is heavily skewed toward electric and hybrid vehicles.

According to the U.S. International Trade Commission, Chinese electric vehicle exports increased by 1,016% from 2018 to 2023.

However, the latest data from the China Passenger Car Association suggests growth may stall to zero in 2025, driven by weak demand from Russia and EU tariffs introduced in 2024. 

At the beginning of Trump’s second term, EVs may offer a perfect case study for how tariffs can be wielded to lock Chinese manufacturers out of the U.S. market. 

With import duties of up to 100% introduced by the Biden administration, Chinese EVs are a rare sight on American roads. Unless Chinese firms set up shop stateside (as they have started in Europe), they will likely stay that way for the foreseeable future.