The US Trade Representative (USTR) has launched an investigation into China’s semiconductor industry, scrutinizing whether the country’s trade practices are anti-competitive. According to a White House statement, the probe focuses on China’s actions that allegedly reduce or eliminate competition within the global semiconductor market. Semiconductors are vital to various industries, including automotive, healthcare, infrastructure, aerospace, and defense, making them a critical focus of the investigation.
This probe is being carried out under Section 301 of the US Trade Act of 1974, which allows the USTR to examine unfair trade practices and their impact on American industries. The White House accuses China of routinely engaging in non-market policies, including industrial targeting, that harm competition and create dangerous dependencies within the semiconductor supply chain. These actions are seen as detrimental not only to US businesses but also to global stability in semiconductor production.
Joe Biden
If the investigation finds China’s actions to be damaging, the USTR has the authority to take several measures under Section 301. These could include imposing tariffs or other import restrictions, withdrawing trade concessions, or negotiating with China to either eliminate harmful practices or secure compensation for the US. The ultimate decisions about what actions to take will rest with President Biden’s administration and the new USTR, Jamieson Greer.
China has strongly opposed the investigation, with its Ministry of Commerce issuing a statement condemning the move. The Chinese government has vowed to take “all necessary measures” to protect its interests, signaling a potential escalation in the ongoing trade tensions between the two countries. This response adds to the growing animosity in US-China relations, particularly in the realm of trade and technology.
Tensions between the US and China have been escalating in recent months. In February, President Biden launched a separate investigation into security risks associated with connected vehicles, including concerns over vulnerabilities posed by China. Additionally, in May, the US raised tariffs on $18 billion worth of Chinese goods, including semiconductors. These actions highlight the broader context of economic rivalry and geopolitical conflict between the two nations.
