This would literally put some company like Siemens out of business. They're much more likely if not obligated to continue business in China and cease doing business in the United States. Like there's just no way they can possibly comply with this and not ruin their company.

Moreover, it's not like stopping a new supply of software is going to slow China down. They will absolutely crack the existing software continue to use it as a matter of national security on their side. and then just continue to work independently on it.

This administration really doesn't understand the reach of soft power. And that by continuing these software relationships, they could simply make sure that the US is prioritized for any new developments. Which would offer an inherent priority and advantage to your economy while allowing the other government to still participate and not become hostile.

Instead, this is absolutely a hostile act towards another country, and China will interpret it as so.