Surely the point here is that we might see some useful competition between VLSI sources?
Aside from military uses, this tech is capable of making China a lot of money. Had negotiations not fixated on a belief only zero sum winner-loser negotiations exist, we might be talking about this differently.
A different approach to negotiations would have changed little, since Chinese industrial policy isn't just a reactive mirror of the policies of other countries. As usual, everyone just did what they were mostly going to do anyway.
This is also belief of Putin, which I suppose is not surprising given the orange man is admiring him.