The Biden administration announced a new trade investigation into “legacy” chips made in China on Monday, even though the White House has just four weeks left.
this The move aims to counter China’s “unfair trade practices”,” could intensify Beijing’s trade woes despite any possible decision on what Fourth wave of chip tariffs According to reports, it will be left to the incoming President Trump.
Traditional chips are basic semiconductors that power everyday items such as cars, washing machines and telecommunications equipment.
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Biden administration officials said that the “Section 301” investigation will be handed over to his administration for completion.
The effort could provide Trump with a ready way to begin enacting some major, 60% tariff He issued threats against Chinese imports.
Outgoing President Joe Biden has implemented a U.S. imposes 50% tariff on Chinese semiconductors Starting January 1st.
His administration has tightened export restrictions on China’s advanced artificial intelligence and storage chips and chip manufacturing equipment, and recently raised tariffs on Chinese solar wafers and polycrystalline silicon to 50%.
The U.S. Trade Representative’s office, which will conduct the new investigation, said it was aimed at protecting U.S. and other market-driven chip producers from a massive Chinese government-driven increase in domestic chip supplies.
“China’s fight for global chip dominance”
U.S. Trade Representative Catherine Tai said the trade body had found evidence that Beijing was targeting the semiconductor industry to achieve global dominance, similar to its efforts in steel, aluminum, solar panels, electric vehicles and critical minerals.
“This allows Chinese companies to rapidly expand production capacity and provide artificially low-priced chips, which can seriously damage and potentially eliminate their market competition,” she told reporters on a conference call.
Traditional wafers use older, mature manufacturing processes and are widely used in the mass market. They do not include advanced chips or complex microprocessors for artificial intelligence applications.
The Biden administration will begin accepting public comments on the investigation on January 6 and plans to hold public hearings on March 11 and 12, according to a Federal Register notice of the investigation.
It is unclear whether Jamieson Greer, Trump’s choice to lead the Office of the United States Trade Representative, a trade lawyer and former head of the Office of the United States Trade Representative during Trump’s first administration, will be elected by the U.S. Senate. will confirm this decision.
The investigation was conducted under Section 301 of the Trade Act of 1974, which Trump invoked to impose tariffs of up to 25% on about $370 billion worth of Chinese imports in 2018 and 2019, triggering a recent Three lawsuits.
If Trump launches an investigation, it would need to be completed within a year of its launch.
Research review impact on key sectors
Biden administration officials said that in addition to examining the impact of imported chips themselves, the investigation will also consider their inclusion in downstream parts and end-use products for key industries such as defense, automotive products and medical equipment.
It will also target China’s production of silicon carbide substrates and wafers used in semiconductor manufacturing.
U.S. Commerce Secretary Gina Raimondo said her department’s research shows that two-thirds of U.S. products that use chips contain Chinese legacy chips and that half of U.S. companies do not know the origin of their chips, including some in the defense industry wafer, this discovery is “quite convincing.”
The United States seeks to build its own semiconductor supply chain, investing $52.7 billion after the Covid-19 pandemic disrupted semiconductor supplies and temporarily halted production of automobiles and medical equipment. New subsidies for chip productionresearch and workforce development.
But Raimondo said China’s plan to build more than 60% of the world’s new legacy chip production capacity in the next decade is hindering investment elsewhere and constitutes unfair competition.
She told reporters that this “cripples our companies and makes the United States dependent on China for the chips we use every day in so many ways.”
Despite a difficult presidential campaign, one of the few areas of continuity between the Biden and Trump administrations will be tariffs on China.
Biden retains all tariffs Trump imposed on Chinese imports and increased tariffs, including 100% Tariffs imposed on Chinese-made electric cars Efforts were made to exclude them from the U.S. market.
- Reuters Additional editing by Jim Pollard
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