I don’t think that there’s anything ideological behind this, it’s just protectionism. Of course that P word is a dirty word, so the US will dress this up as fighting off the evil forces of communism, but it’s about protecting US industries from a strong rival who can beat them on price.
The section about less powerful chips is interesting, and worth paying attention to. When Intel started making the Pentium back in the 90s, some folks wondered about the 486 and 386.
They shouldn’t have. Simpler Intel chips were selling like hot cakes, being used with embedded systems in cars, air cons, and even F1 racing cars (a 286 had all the fire power you needed for a mid 90s F1 car).
So it will be the same here. You want that fancy chip for your AI enabled smart phone. But you can go for something with a bit less oomph and a lot less price when you have to control charging and monitoring in an EV with rear impact sensors and a lane detector.