The Biden administration on Monday announced a last-minute trade investigation into old Chinese “legacy” semiconductors, further increasing U.S. tariffs on Chinese chips that power everyday products from cars to washing machines to communications equipment. There is a possibility that
U.S. Trade Representative Katherine Tai said the investigation was aimed at protecting the U.S. and other chip makers from China's massive state-sponsored expansion of domestic chip supply.
Biden administration officials say the Section 301 investigation, which began four weeks before President-elect Donald Trump took office on Jan. 20, will be turned over to the administration for completion in January.
The effort could provide a ready path for Trump to begin imposing some of the hefty 60% tariffs he has threatened on imports from China.
Outgoing President Joe Biden has already imposed a 50% tariff on Chinese semiconductors starting January 1st.
The administration has also tightened export controls on advanced artificial intelligence, memory chips, and chip manufacturing equipment.
Legacy chips use older manufacturing processes introduced more than a decade ago and are often much simpler than chips used in AI applications or advanced microprocessors.
Commerce Secretary Gina Raimondo said Monday that her department's research shows that two-thirds of U.S. products that use chips use legacy chips made in China, and half of U.S. companies, including those in the defense industry, use Chinese-made legacy chips. He said it turned out he didn't know the origins of his chips. “It's quite alarming.”
China's Ministry of Commerce said in a statement that the U.S. chip investigation is “protectionist” and will harm U.S. companies and disrupt the global chip supply chain. The Chinese government said it would “take all necessary measures to resolutely protect its rights and interests.”
A spokesperson for Trump's transition team did not respond to a request for comment.
Tai told reporters that trade authorities had found evidence that China was targeting the semiconductor industry in its bid for global domination. “It would be possible to offer price tips, which could seriously harm and potentially eliminate the market,” it added. Competition of intentions. ”
The Biden administration began accepting public comments on the investigation on January 6, and is planning public hearings on March 11 and 12, according to a federal filing regarding the investigation, which is expected to be completed within a year. That's what it means.
The investigation is being conducted under Section 301 of the Trade Act of 1974, which allows President Trump to impose tariffs of up to 25% on approximately $370 billion worth of Chinese imports in 2018 and 2019. This is the same unfair trade law that was invoked in 2017, and the trade war with China has lasted about three years.
The Information Technology Industry Council, a trade group representing the U.S. high-tech industry, said the investigation could have complex and far-reaching implications for the global economy and supply chains and urged the USTR to “not prejudge the outcome.” I asked.
The group's president, Jason Oxman, said he was concerned that an investigation would be launched during the presidential transition and said he would “conduct an investigation in an objective and cooperative manner against officials of the current and incoming administrations. We urge you to do so,” said ITIC Chairman Jason Oxman. statement.
Most of the United States' smartphones, laptop computers, video game consoles, and other consumer electronics are still imported from China.
In addition to examining the impact of the imported chips themselves, Biden administration officials said they will also look into their contamination with downstream components and end-use products in critical industries such as defense, automotive products and medical devices.
It also plans to target China's production of silicon carbide substrates and wafers for semiconductor manufacturing.
The U.S. is offering $52.7 billion in new subsidies for chip production, research and workforce development as the coronavirus pandemic disrupts semiconductor supplies and temporarily halts production of cars and medical equipment. The company has been aiming to use the dollar to build its own semiconductor supply chain.
