At a state level it's a pretty good defensive strategy against the American AI industry, as a whole, gaining a monopolistic advantage. This prevents the US from using this as a coercive leverage through things such as tarrifs, export bans etc.
In a world, that's increasingly dependant on the AI "opium" that the US is dealing, it's conceivable that the current administration could try to sabotage something like, say Chinese-European relationships, by threatening to cut access to Anthropic or OpenAI products for Europeans, if China cosies up to the EU.
The disadvantage of trying to use these leverages, is that once the genie's out of the bottle, the other party will divert their focus quickly, so it only works if the US truly has a choke-hold on frontier AI. Otherwise, you just scared the other party into never trusting American frontier AI ever, and you didn't even truly hurt them, because they already have a quick fix from China.
Unfortunately behind a paywall, but there's an article in the previous issue of Foreign Affairs about how the Trump administration has fumbled this coercion strategy repeatedly because they overestimated their advantage in different markets (tariffs on Canada, Iran, etc) and what an actually effective strategy can look like https://www.foreignaffairs.com/united-states/how-fight-econo...
tl; dr: You need to have a monopoly, the enemy should not bounce back quickly, you shouldn't cripple your own economy doing it.
AI may just be the next economic offensive the Trump administration fumbles, because China planned ahead by incentivising development of close-second alternatives to their frontier models.