Experts remove Kirin 9000 series chips manufactured by China Semiconductor Manufacturing International Co. from Huawei smartphones. (James Park/Bloomberg News)
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President Joe Biden’s administration plans to launch a trade investigation into Chinese semiconductors in coming days as part of efforts to reduce dependence on technology that U.S. officials believe poses a national security risk.
The investigation could lead to tariffs and other measures restricting imports of older semiconductors and products containing them, including medical equipment, cars, smartphones and weapons, the people said.
The investigation into the so-called foundational chip could take months to conclude, meaning any reaction to the findings will be at the discretion of President-elect Donald Trump’s incoming team.
Biden officials have been debating for months whether to launch an investigation under Section 301, which allows the U.S. to impose restrictions on countries with unfair trade practices, the people said. White House officials agreed this week to move forward with an investigation that could help protect the U.S. semiconductor industry.
Approval of the study means the new Trump administration will likely have the option of imposing trade restrictions to protect domestic semiconductor production in the first months of the incoming president’s term.
Strengthening the U.S. semiconductor industry has been a key focus for Biden, who has taken aggressive steps to restrict exports of advanced U.S. technology to China. Mr. Biden signed a bill that gives billions of dollars in incentives to chip makers to build semiconductor factories in the United States to avoid demand for cheaper Chinese chips.
Spokespeople for the National Security Council and the Office of the U.S. Trade Representative declined to comment.
global competition
The White House has used the past two years to implement export restrictions on advanced semiconductors made with technology from the United States and its allies. But during that time, China was able to produce older, widely available semiconductors at lower costs than its competitors.
Biden officials worry that without regulation, Beijing could flood the U.S. and global markets with cheap chips, overwhelming other companies and forcing them into bankruptcy. .
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In May, the White House announced that tariffs on legacy semiconductors made in China would increase from the current 25% to 50% by 2025. But the Biden team largely agreed that that alone would not be enough to prevent future market turmoil, especially in the United States. The United States is aiming to expand domestic production of semiconductors.
To impose these tariffs, Biden used the same authority that President Trump used to impose tariffs on more than $300 billion of Chinese goods during his first term.
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