The United States believes that China’s advance in the semiconductor field is a threat to both national security and the market position of American companies. Washington has been passing increasingly severe trade restrictions against Chinese companies. Now, the United States is launching a probe into China’s semiconductor industry to determine the level of danger and further potential measures to be taken.
The US probe into China’s semiconductor industry seeks to determine the potential danger it represents
According to the White House, Beijing is targeting the semiconductor industry to achieve some dominance over the supply chain on which others depend. To do so, the Chinese government “routinely engages in non-market policies and practices, as well as industrial targeting, of the semiconductor industry,” the statement said. China’s practices aim to create “dangerous supply chain dependencies,” the document added.
To begin the investigation, the United States will rely on Section 301 of the Trade Act of 1974. “Section 301(b) may be used to respond to unreasonable or discriminatory foreign government practices that burden or restrict U.S. commerce. Under Section 302(b) of the Trade Act, the U.S. Trade Representative may self-initiate an investigation under Section 301,” the statement reads.
The goal of the probe seeks to determine how much China’s alleged practices are unfairly harming the US semiconductor industry. The probe will also address the White House’s concern for US national security. They will study how China implements semiconductors in the defense, automotive, aerospace, medical, telecommunications, and energy industries.
In addition, the representatives will analyze the situation regarding the production of key materials for chip manufacturing. After the probe is complete, the government will take appropriate measures based on the findings. This could include further escalating the scope of trade restrictions.
The situation between the US and China is increasingly tense
Recently, Washington imposed a new set of restrictions on China’s chip industry. The move comes after Huawei was found using AI hardware produced with US technology. The US is also still dealing with Chinese infiltration of its telecommunications infrastructure.
