The Office of the United States Trade Representative (USTR) has launched an investigation into China’s semiconductor industry, looking for anticompetitive business practices. USTR is investigating China for “acts, policies, and practices” that have reduced or eliminated competition in the semiconductor market.
The investigation is carried out through of the US Trade Act of 1974 to examine trade practices regarding “fundamental” semiconductors used by the automotive, healthcare, infrastructure, aerospace and defense industries. The White House on Monday accused China of “systematically” engaging in “non-market policies and practices, as well as industrial targeting of the semiconductor industry” that have caused significant harm to its competition and created “dangerous dependencies in the supply chain,” according to the statement.
If action is taken as a result of the investigation, Section 301 allows the USTR to “impose customs duties or other restrictions on importation,” “withdraw or suspend concessions granted in under trade agreements” or to enter into an agreement with China to “either eliminate the conduct in question…” or compensate the United States with satisfactory trade advantages,” according to the US Trade Act. Those decisions, however, will be left to President Trump’s administration and the new U.S. Trade Representative, Jamieson Greer.
A spokesperson for China’s Commerce Ministry said in a statement that China “strongly deplores and firmly opposes” the U.S. investigation. The nation “will also take all necessary measures to resolutely defend its rights and interests,” according to the statement. .
Tensions between the United States and China are already high. President Biden launched in China and other unnamed countries due to possible vulnerabilities and threats related to connected vehicles. Then, in May, the White House announced on $18 billion in Chinese imports, including semiconductors.
