The Office of the US Trade Representative (USTR) has launched an investigation into China’s semiconductor industry looking for anti-competitive trade practices. In China, the USTR is investigating “actions, policies and practices” that have reduced or eliminated competition in the semiconductor market.
The probe is passed through of the US Trade Act of 1974 to investigate trade practices for “essential” semiconductors used in the automotive, healthcare, infrastructure, aerospace and defense industries. The White House on Monday accused China of “routinely” engaging in “non-market policies and practices and industrialization of the semiconductor industry” that caused significant harm to its competitors and created “dangerous supply chain dependencies,” the statement said.
If action is taken as a result of the investigation, Section 301 allows the USTR to “impose tariffs or other import restrictions,” “withdraw or suspend trade agreement concessions,” or enter into an agreement with China to “eliminate either the conduct in question…” or the U.S “compensate with satisfactory commercial benefits,” says the US trade law. However, these decisions will be left to President Trump’s administration and new USTR Jamieson Greer.
A spokesman for China’s Ministry of Commerce said in a statement that China “deeply regrets and firmly rejects” the U.S. investigation. The nation will also “take all necessary measures to resolutely defend its rights and interests,” the statement said .
Tensions between the US and China are already high. President Biden started in China and other undisclosed countries due to possible vulnerabilities and threats from connected vehicles. Then, in May, the White House announced on $18 billion worth of Chinese imports, including semiconductors.
