The Biden administration announced on Dec. 23 a trade investigation into “legacy semiconductors” made by China. The investigation falls under Section 301, a part of the U.S. Trade Act of 1974 that allows Washington to challenge imports on national security grounds. The investigation comes less than a month before Biden is to leave the U.S. Presidency, and appears to escalate and lock into place a trade war with China, before Donald Trump takes office, even if Trump has indicated a tough stance on China trade.
The press release of U.S. Trade Representative Katherine Tai states:
“Evidence indicates that China seeks to dominate domestic and global markets in the semiconductor industry and undertakes extensive anticompetitive and non-market means, including setting and pursuing market share targets, to achieve indigenization and self-sufficiency. China’s acts, policies, and practices appear to have and to threaten detrimental impacts on the United States and other economies, undermining the competitiveness of American industry and workers, critical U.S. supply chains, and U.S. economic security.”
Further: “The [USTR] investigation will initially focus on China’s manufacturing of foundational semiconductors … to the extent that they are incorporated as components into downstream products for critical industries like defense, automotive, medical devices, aerospace, telecommunications, and power generation and the electrical grid.”
