Because as always this won't be about the actual pacing, but about the details of how the regulation will be implemented: How would you control the pacing? By installing a position in the company, providing regular feedback to some government organisation. This will be something the big US players can afford and implement, while an open weight blob uploaded to huggingface or modelscope, by definition, won't have a pacing officer attached, and thus will be against the law. And the Chinese companies, of course, won't abide to US law, because why would they? The open models they provide right now are essentially gifts to the world public. If the US doesn't want them, that's their choice.

So the end result will be a protectionist regime keeping the competition out, just like with cars and solar. The local industry will have a protected market, but of course won't play a role on the global stage.

Remember: small government is only good as long as it benefits the industry.