Since US President Trump has ordered TSMC not to do business with Huawei/HiSilicon anymore, this leading Chinese company is cut-off from using latest advanced chip technology (7nm/5nm process) in its products (hi-end smartphones etc.). Now, what if China in response brings a new law/regulation/executive order that says this: Denying this technology to our companies, but allowing US companies to sell their products using these same technologies in China creates an unjust and unfair competition and also an unfair market condition: it discriminates Chinese companies and favors US companies. Therefore, as long as the US denies Chinese companies equal access to such technologies in the free market, then consequently China will not let any products using those same technologies enter the Chinese market. Bingo! This would mean Apple's and Google's latest hardware products with the latest chip technology would be banned from entering the huge Chinese market. Same with AMD, Nvidia and some other companies. So, should investors in the involved US companies begin selling-off their stocks?... I personally think yes. One should even buy Put options with long expiration dates...
That is generally how trade wars work yes, but judging by TSMC's chart, Donnie was likely bullshitting per usual.
INTC couldn't develop the latest chip manufacturing technology and just started using TSMC to manufacture their CPU chips.
Is Trump demanding a ransom for TikTok, or is it a funny kind of sales tax? https://finance.yahoo.com/news/trump-calls-tiktok-hot-brand-185036192.html
This could work as an incentive to Chinese semiconductor foundries to reduce the gap in technology. They might try to speed up their development and installation of newer equipment. We have already seen examples of this: US government (i.e. Trump) has put pressure on the Dutch government to not give an export license to ASML to ship their latest equipment to Chinese customers.