A low-profile firm in a quiet corner of the Netherlands has become crucial to a half-trillion-dollar global industry. Martin van den Brink joined the company in 1984, little knowing that someday it would be the center of a US-China fight over semiconductors.

In October, the Biden administration imposed new restrictions on exports of advanced chip-manufacturing equipment to China to hobble Beijing’s efforts to build its high-tech industry and slow its military advances. The restrictions target “American technology that is essential for the national security of the United States,” according to a statement from the Commerce Department.

That included the machines that manufacture the brains of computers and phones, known as the logic processing units (LPU). Specifically, Washington sought to limit exports of “high-end optical and electron beam lithography systems,” which create the complex patterns needed for the LPU. These machines take a picture of the circuitry and use powerful lasers to cut it. Each machine can cost up to $160 million.

The move targeted the most sophisticated machinery manufacturers, such as Lam Research Corp. and KLA Corp., for their clients. It effectively cut off the equipment makers from sales in China. The US government acted under a rarely used legal authority that allowed it to regulate equipment made anywhere in the world using American technology. That prompted foreign equipment makers to comply, cutting off Chinese access to critical segments of the global supply chain.

But the new restrictions also hit the high-tech firms that buy and install the equipment. These include companies that design and create chips, like Nvidia and Advanced Micro Devices. The repercussions have rippled through the global tech economy, threatening to crimp innovation in artificial intelligence and 5G networks, which could slow economic growth.

Despite the setbacks, officials are optimistic that a deal can be reached to end the conflict. On Wednesday, a senior White House official and the head of China’s National Development and Reform Commission, Liu He, met for the first time since early in the trade war. US Treasury Secretary Steven Mnuchin and Commerce Undersecretary David Malpass were also present and spoke of the need for both sides to work together to achieve a “win-win outcome.”

Still, experts say a deal is unlikely in the near term. The US and its allies will likely have to exert pressure on Beijing to make concessions. But “while the US government is right to sanction China, it needs to do so in a way that doesn’t harm American businesses and their allies,” says Jimmy Goodrich, vice president of global policy at the Semiconductor Industry Association.