> I just don't understand this American elites view that cutting off China from acquiring Nvidia chips will result in a strengthened American position instead of getting obliterated by SMIC+Huawei

It’s just a combination of wilful ignorance or otherwise being stuck in past modes of thinking of the US being ahead of the world technologically. It’s not just elites, “USA #1” is an important aspect of American culture.

But regardless the policy is not the issue here, it’s the open corruption, allowing laws to be circumvented due to connections to the White House or people connected to them.