Chris Miller highlights an important aspect of American relations with Chinese adversaries.

As the incoming Trump administration devises its strategy to rebalance trade with China, electronics—the computers, phones, and servers that define the digital world—will be at the center. China is the largest manufacturer and assembler of electronics, while the United States is the world’s biggest designer and buyer of them.

A quarter of the goods that China exports to the United States are electronics. China produces a large share—perhaps dangerously so—of the world’s electronics, exporting 63 percent of the world’s smartphones and 72 percent of computers.

Despite multiple rounds of tariffs and export controls, in recent years, China’s position has in many ways strengthened. The West has criticized Beijing’s industrial policies like Made in China 2025, but these tactics have helped China gain market share in many segments.Export controls on advanced chips have slowed China’s progress in that sphere, but China is gaining market share and technological aptitude in nearly every other segment of the electronics supply chain.

Simpler semiconductors, substrate materials, display screens, printed circuit boards (PCBs), and assembly capabilities have attracted far less attention from policymakers. Yet electronic devices from smartphones to servers require many other components beyond advanced chips to function.

China is applying the same playbook it has deployed in semiconductors—including vast, market-distorting subsidies for government-linked firms—to shift the balance of influence in these sectors too. The US and other Western countries risk becoming overdependent on China-based manufacturing for some types of electronic components.

Chinese firms, meanwhile, are developing advanced capabilities. Because subsidized Chinese companies can offer below-market prices, their world market share will grow. Unless the West takes policy action to counteract Chinese subsidies, Chinese firms will play a bigger role in the electronics supply chain—including in more advanced, higher-value segments. This poses two challenges for the United States: the risk that China dominates specific segments and uses them as leverage against the West and the risk that—amid a military crisis—the US could lack the components its defense industrial base needs if supply from China and the rest of Asia is disrupted.