China should allow all foreign players to supply non-US lithography equipment to supply the market until China develops its own lithography equioment.
When that happens then China should raise tariffs on all IC equipment containing US IP. Note that this will include non-US IP supplier as well but the tariffs should be small, e.g 10-25% while for US IP supplier should be at least 100%. (Hard tariffs or soft tariffs)
After 7-10 years or so, when domestic IC is comlarable to foreign, it should drop tariffs for non-US and could use dropping US supplier tariffs as a leverage when negotiating with the US.
I am leaning to the other side. I have a feeling both Korea and Taiwan got jealous when they heard China is developing its own EUV and now they want to get into the mix. What EUV they develope the west will not tolerate because that's their domain. So Taiwan and Korea are planning using China market to nurture their own EUV development.
At the same time they are in US camp as far as security concerned. I am leery of helping Korea and Taiwan further develope their tech by giving the crucial market support and they don't have their own and elsewhere.
Then again, China already had EUV prototype, and may come out EUV faster than Taiwan and Korea. So this would become a moot point.
Ultimately it's better off for China to decouple technologically not only from US but the west in general as well. It going to take some times.
China space tech and military already decoupled from the west.
