The Biden administration on Monday announced a last-minute trade investigation into old Chinese-made “legacy” semiconductors that could impose more U.S. tariffs on chips from China that power everyday goods from autos to washing machines to telecom gear. Gives.
US Trade Representative Katherine Tai said the investigation is aimed at protecting American and other semiconductor producers from China’s massive state-driven buildup of domestic chip supplies.
Biden administration officials said the “Section 301” investigation, launched four weeks before President-elect Donald Trump took office on Jan. 20, will be handed over to his administration for completion in January.
The effort could provide Trump with a ready opportunity to threaten to impose massive 60% tariffs on Chinese imports.
Outgoing President Joe Biden has already imposed a 50% tariff on Chinese semiconductors starting on January 1.
His administration has also tightened export restrictions on advanced artificial intelligence and memory chips and chip-making equipment.
Legacy chips use older manufacturing processes introduced more than a decade ago and are often far simpler than chips used in AI applications or sophisticated microprocessors.
Commerce Secretary Gina Raimondo said Monday that her department’s research showed that two-thirds of US products using chips had Chinese legacy chips, and half of US companies did not know the origin of their chips, Including some in the defense industry, the findings were “deeply worrying.”
China’s commerce ministry said in a statement that the investigation into US chips was “protectionist” and would harm US companies and disrupt the global chip supply chain. It added that Beijing “will take all necessary measures to firmly safeguard its rights and interests.”
A spokesperson for Trump’s transition team did not immediately respond to a request for comment.
Tai told reporters that the trade agency had found evidence that China is targeting the semiconductor industry for global dominance, adding: “It is encouraging its companies to rapidly expand capacity and artificially lower priced chips.” are able to make offerings that threaten to significantly harm and potentially eliminate their market.” -oriented competition.
According to a Federal Register notice on the investigation, the Biden administration will begin accepting public comments on the investigation on January 6 and has planned a public hearing for March 11-12, with the plan to be completed within a year.
The investigation is being conducted under Section 301 of the Trade Act of 1974, the same unfair trade practice law Trump invoked to impose tariffs of up to 25% on about $370 billion of Chinese imports in 2018 and 2019, taking nearly three years It took place. Trade war with Beijing.
The Information Technology Industry Council, a trade group representing the U.S. tech sector, said the investigation could have complex and far-reaching implications for the global economy and supply chains and urged the USTR “not to prejudge the outcome.”
“The group’s president, Jason Oxman, said he was concerned about the investigation being launched during a presidential transition, and we urge officials from the current and incoming administration to conduct the investigation in an objective and collaborative manner,” ITIC President Jason Oxman said. We do.” a statement.
Most American smartphones, laptop computers, video game consoles, and other consumer electronics products are still imported from China.
A Biden administration official said that in addition to examining the impact of imported chips, the investigation will look at their incorporation into downstream components and end-use goods for critical industries, including defense, automotive products and medical devices.
It will also target China’s production of silicon carbide substrates and wafers for semiconductor manufacturing.
The US is looking to build its semiconductor supply chain with $52.7 billion in new subsidies for chip production, research and workforce development, after the COVID-19 pandemic disrupted semiconductor supplies and temporarily halted production of auto and medical devices. Has demanded.
