The Office of the United States Trade Representative (USTR) has launched an investigation into China's semiconductor industry looking for anti-competitive trade practices. The US Trade Representative is investigating China for “actions, policies and practices” that have reduced or eliminated competition in the semiconductor market.
The investigation is being conducted through US Trade Act of 1974 to examine trade practices in “essential” semiconductors used in the automotive, medical, infrastructure, aerospace and defense industries. The White House on Monday accused China of “routinely” engaging in “non-market policies and practices and industrial assault on the semiconductor industry,” which has significantly harmed its competition and created “dangerous supply chain dependency,” according to a White House statement. statement.
If action is taken as a result of the investigation, Section 301 allows the US Trade Representative to “impose duties or other restrictions on imports,” “withdraw or suspend concessions under a trade agreement,” or enter into an agreement with China to “either eliminate the conduct in question… or compensate the U.S. satisfactorily trade benefits,” according to the US Trade Act. However, these decisions will be left to the discretion of President Trump's administration and new US Trade Representative Jamison Greer.
A spokesman for China's Ministry of Commerce said in a statement that China “strongly condemns and firmly opposes” the U.S. investigation. According to the president, the country will also “take all necessary measures to resolutely protect its rights and interests.” .
Tensions between the US and China are already high. President Biden launched to China and other unnamed countries due to possible vulnerabilities and threats from connected vehicles. Then in May the White House announced on Chinese imports, including semiconductors, worth $18 billion.