I do not know full details, but China did exactly that. There were articles about limiting Nvidia chip imports more than a year ago. It really highlighted the absurdity of the export ban.
To my non-expert knowledge, the reasoning behind the export ban has never been explained beyond a vague assertion that China would do some sort of evil with AI if they have bigger GPUs than some arbitrary number of transistors, and also some silliness where paying a 15% tax made some of the GPUs safe to export. It has been pretty great for Huawei.
There are. A lot of Nvidia chips are still stuck in Hong Kong.
What the government does is not always what corporations follow.
https://nationaltechnology.co.uk/Nvidia_GPUs_Sitting_Unused_...
https://www.tomshardware.com/tech-industry/u-s-commerce-secr...
If this principle were true, then autarchies like North Korea would be the most advantaged since they never have to worry about international competition in their domestic market.
Your confidence is not backed by any data or observation, it's just an unfounded inference.