The Biden administration is preparing to initiate a trade investigation into Chinese semiconductor imports, aiming to safeguard US national security and domestic industries. The move, expected in the coming days, focuses on older-model semiconductors, which are widely used in products such as medical devices, cars, smartphones, and weaponry, according to sources familiar with the matter.
Section 301 Investigation into Unfair Trade Practices
Officials have debated for months whether to proceed with the probe under Section 301, which allows the US to impose trade restrictions on countries engaging in unfair trade practices. This week, the administration agreed to move forward, marking a significant step to shield the US semiconductor industry.
The inquiry could lead to tariffs or import restrictions but is unlikely to conclude until President-elect Donald Trump’s team assumes office. By initiating the investigation now, the Biden administration ensures the incoming leadership will have the option to impose measures to protect domestic semiconductor production.
White House Focus on Semiconductor Industry
Bolstering the US semiconductor industry has been a central focus of Biden’s economic and national security policies. The administration has taken steps to limit advanced US technology exports to China while promoting domestic chip production through significant legislative incentives.
“The Biden administration’s resolve to protect national interests has paved the way for this probe,” a source indicated, underscoring the critical role semiconductors play in national security and economic competitiveness.
Global Competition and Concerns over Market Disruption
Over the past two years, the US has imposed export controls on advanced semiconductors produced with American and allied technology. However, China has continued to manufacture older, more accessible chips at lower costs, raising concerns that Beijing could flood global markets with inexpensive semiconductors.
Officials worry this strategy could drive US and allied manufacturers out of business, undermining efforts to expand domestic semiconductor production.
In May 2024, the White House announced plans to increase tariffs on Chinese legacy semiconductors from 25% to 50% by 2025. Despite this, Biden officials determined additional measures were necessary to prevent long-term disruptions.
Looking Ahead: Incoming Trump Administration
The upcoming trade probe aligns with a broader effort to curtail China’s influence in global semiconductor markets. As Biden’s term concludes, his administration’s decision ensures President-elect Trump’s team will have actionable findings and the authority to impose new tariffs or restrictions.
By leveraging the same trade authority Trump previously used to impose tariffs on $300 billion worth of Chinese goods, Biden’s move underscores the bipartisan concern about China’s role in global technology markets and national security.
The impending investigation highlights ongoing US efforts to counter Beijing’s trade practices while promoting domestic semiconductor production. With national security at stake, the Biden administration’s decision sets the stage for the next administration to address challenges in the global semiconductor industry.
Read More : Elon Musk’s Net Worth Reaches Historic $500 Billion
