Shares of Apple Inc. (NASDAQ: AAPL) have fallen by nearly 7% this week. The company should be thankful that it is only a four-day week. After dropping by 3.5% on Wednesday and 2.9% on Thursday, the stock was down a mere 0.2% in Friday’s premarket session. But it is still early.

By now, everyone knows why: China’s government has forbidden employees of state companies and government-backed agencies to use Apple’s iPhone at work. According to a Reuters report, sales in China account for about 19% of Apple’s annual sales, the hit to Apple’s top line could be more than $77 billion for the 2023 fiscal year that ends in October. If Apple’s profit margin is 35%, the sales ban destroys some $280 million profit, or about $8 billion valuation.

Even after this week’s disaster, Apple’s market cap is still nearly $2.8 trillion and the loss of $8 billion in profit is just 0.2% of the company’s market cap. In the view of Wedbush analyst Dan Ives, China’s “iPhone ban is way overblown.” He told Bloomberg that the ban affects fewer than half a million iPhones in a country where Apple expects to sell 45 million of the devices in the next 12 months.

Still, that is not a good look for Apple, especially given Huawei’s newly announced Mate 60 Pro smartphone. The timing of the announcement coincided with the Chinese government’s announced ban on iPhones, and that was surely not accidental. The performance specs of the Mate 60 Pro indicate that China is making progress in working around the U.S. ban on exporting high-performance technology products to China.

A possible U.S. winner in this episode could be the Biden administration. The strict bans on exporting advanced technology to China from companies like Nvidia, AMD and ASML are forcing China to develop the technology on its own. According to a teardown by TechInsights, the new Huawei phone is powered by a new Kirin 9000s 7-nanometer chip fabricated by Semiconductor Manufacturing International Corp. (SMIC), a Shanghai-based contract chipmaker with about 35% government ownership.

The 7-nm technology trails the most advanced 3-nm technology that will be available in production quantities next year from fabs owned by Taiwan Semiconductor and Samsung. But the U.S. export ban was supposed to limit sales of chipmaking equipment to China to machines only capable of producing 14-nm chips.

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When the Biden administration last month introduced tighter controls on tech exports to China, officials were careful to couch the restrictions as aimed at protecting U.S. national security and not at China’s economy. Republicans in Congress had been pushing for stricter controls.

Now the Republicans are doubling down. In a statement Thursday, Mike Gallagher (R-WI) said, “The time has come to end all U.S. technology exports to both Huawei and SMIC to make clear any firm that flouts U.S. law and undermines our national security will be cut off from our technology.”

Another Congressperson, Michael McCaul (R-TX), who is chair of the House Foreign Affairs Committee, said the committee will seek a briefing from the Commerce Department’s Bureau of Industry and Security (BIS) and “will continue urging them to strengthen our controls to prevent more circumstances like the one we’re seeing right now.”

If the Biden administration does not move to tighten controls on exports to China, Biden will be accused of being soft on China and endangering national security. If it does recommend stricter controls, then the administration will be subject to complaints over its interference with business. Welcome to Politics 101.

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