US Trade Representative Katherine Tai has announced a trade investigation into older Chinese-made semiconductors that power everyday goods, including autos and washing machines. The probe aims to protect American semiconductor producers from China’s state-driven buildup of domestic chip supply.
The investigation, launched four weeks before President-elect Donald Trump takes office, will be handed over to his administration in January for completion. This could offer Trump a quick way to impose tariffs on Chinese imports.
According to the US Commerce Department, two-thirds of US products using chips have Chinese legacy chips in them, and half of US companies do not know the origin of their chips. China’s commerce ministry has called the probe “protectionist” and said it will take measures to defend its rights and interests.
The investigation is being conducted under Section 301 of the Trade Act of 1974 and may have complex implications for the global economy and supply chains. The US administration has imposed a 50% tariff on Chinese semiconductors starting January 1, and this probe could be a step towards further action against China’s chip exports.
The Biden administration has also tightened export curbs on advanced artificial intelligence and memory chips, and is building its own semiconductor supply chain with new subsidies. The Technology Roundup newsletter brings the latest news and trends straight to your inbox. Sign up here.
Source: https://www.reuters.com/technology/biden-launches-new-us-trade-probe-into-legacy-chinese-chips-2024-12-23