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U.S. Launches Trade Probe Into Chinese Chips Ahead Of Trump Administration

Photo credit: Reuters
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The Biden administration announced on Monday (December 23) the launch of a new investigation into Chinese legacy semiconductors used in products ranging from automobiles and household appliances to defense systems.

China “routinely engages in non-market policies and practices, as well as industrial targeting” of the chip industry, which allows Chinese firms “to significantly harm competition and create dangerous supply chain dependencies in foundational semiconductors,” the White House said in a statement.

Last-minute Trade Probe

The Biden administration’s ‘Section 301’ probe, launched four weeks before President-elect Donald Trump takes office on January 20, will transition to Trump’s team for completion, officials said. This investigation could pave the way for Trump to implement the 60 percent tariffs on Chinese imports he has vowed to impose.

The probe will look into China’s “acts, policies, and practices on the production of silicon carbide substrates or other wafers used as inputs into semiconductor fabrication,” the White House added.

Before departing, Biden enacted a 50 percent U.S. tariff on Chinese semiconductors, effective January 1. His administration also tightened export restrictions on advanced AI chips, memory chips, and chipmaking equipment destined for China. Additionally, tariffs on Chinese solar wafers and polysilicon were recently raised to 50 percent.

China’s Semiconductor Dominance Efforts

The U.S. Trade Representative’s office, which is overseeing the new investigation, stated that the probe aims to protect American and other market-driven chip producers from China’s extensive state-backed efforts to build up its domestic chip supply.

U.S. Trade Representative Katherine Tai emphasized that the trade agency has found evidence suggesting Beijing is targeting the semiconductor industry for global dominance, mirroring its previous strategies in steel, aluminum, solar panels, electric vehicles, and critical minerals.