President Trump promised to make America great again, but his aggressive approach has ultimately produced mixed results. Semiconductor companies, particularly Micron Technology (NASDAQ:MU), have certainly felt the heat. MU stock has been a powerhouse investment since recovering from its 2015 disaster. But with its shares recently slowing down, is the Trump administration an asset or a liability for Micron?

Take away the political biases, and you’ll find it’s a tough question to answer. Since the beginning of 2016, MU stock has skyrocketed over 260%. Last year, the memory-chip specialist jumped more than 86%. While Micron’s momentum has certainly slowed in 2018, it certainly has not been a slouch, having risen 22% as I write this column.

Micron’s robust performance is similar to the surges of other names in the semiconductor space, including Cypress Semiconductor (NASDAQ:CY), Cree (NASDAQ:CREE), and the surely parabolic Advanced Micro Devices (NASDAQ:AMD).

However, MU stock has recently resembled Intel (NASDAQ:INTC); that is, a company that has gotten off to a great start, but isn’t quite finishing well. Since June 1, Micron shares have dropped almost 14%. Another big slide and investors will find themselves losing money on the stock in 2018.

The most obvious stressor working against MU stock is China. Prior to the U.S.-China trade conflict escalating to fever-pitch levels, Micron had its own conflict with Chinese regulators. For several months, Micron and United Microelectronics (NYSE:UMC) battled in China’s court system over intellectual property and patent infringements.

In July, MU suffered a legal setback. A Chinese court granted a preliminary junction against the semiconductor firm, preventing its China-based subsidiaries from manufacturing and distributing certain products inside the country.

Management treated the situation as if it were no big deal. And in reality, it’s not. The bigger issue, though, is the underlying dynamics. Micron can’t afford a perpetually poor relationship with China.

MU Stock Caught in a Political Crossfire

Usually, investing is a boring enterprise. You pick a company or asset that you believe will do well over time, and you buy it. You’re happy when you win, and not so much if you lose.

But lately, the events surrounding MU stock have become akin to a classic Tom Clancy thriller. While the focus is on Micron and UMC’s individual allegations and grievances, their legal conflict is part of a bigger picture.

It’s no secret that China wants to dominate this century and beyond. In an effort to accomplish that goal, the Chinese government has played dirty. That’s according to author Gordon Chang, who stated in a Fox Business interview that intellectual property theft is at the core of the Chinese system.

Chang didn’t mince his words in the shockingly frank interview. He stated that cheating, stealing, and lying are baked into Chinese society.

I don’t want to go that far, but I also believe that we should acknowledge Chang’s central criticism. Whether you agree with President Trump or not, we cannot let IP theft go unpunished. Doing so would undermine American credibility at an especially vulnerable time. In addition, available evidence indicates that such theft has occurred frequently, triggering Chang’s anger.

But this long-simmering conflict places MU stock in a risky situation. As a company, Micron can’t afford to let IP theft slide for myriad reasons. Primarily, the company also must retain its credibility. Otherwise, it’s open season against MU.

At the same time, Micron generates half of its revenue from China. I doubt whether the Asian powerhouse will launch a severe crackdown on Micron’s Chinese operations. Still, the current political trajectory is far from favorable.

Buy MU Stock for the Long-Term

Indeed, the gambler would likely wager that U.S.-China relations will worsen in the nearer-term. The Chinese desperately want to avoid losing face. Trump isn’t going to back down on China, not when he’s made perceived concessions to Kim Jong-un and Vladimir Putin.

Given this standoff, MU stock might absorb some pain. However, if push comes to shove, my money is on the U.S. While I respect and admire China’s rapid rise over the years, no one country can compete with American economic firepower.

Even a coordinated effort — involving OPEC, the EU, or Russia and its neighbors  — cannot hope to topple the U.S. Sure, we have our problems, but we’re still the lone superpower.

Ultimately, that’s our trump card. Hopefully, we don’t have to use it, but it’s available to us. Plus, in the long run, Trump’s strident approach is a net asset.

We can’t have a situation in which China or any of our economic rivals feels emboldened to rip off American companies. Business thrives on trust. Micron might suffer as China’s government learns this the hard way. Still, we’re better off teaching Beijing this lesson now while we have leverage, rather than when China becomes the second superpower.

As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities.