U.S. Launches Trade Probe Into China's Semiconductor Practices

The Biden administration initiates a Section 301 investigation into China's dominance in legacy chips, setting the stage for potential tariffs under the incoming Trump administration.

• The Biden administration announced a Section 301 investigation into China's trade practices in the semiconductor industry, focusing on legacy chips used in industries like defense, automotive, and medical devices.
• The probe will assess China's use of state subsidies, forced technology transfers, and other non-market practices to dominate the global semiconductor market, which the U.S. says undermines economic security and supply chains.
• Outgoing President Biden has already implemented a 50% tariff on Chinese semiconductors starting January 1 and tightened export controls on advanced chip technologies.
• Commerce Secretary Gina Raimondo emphasized investment in domestic chip manufacturing through the CHIPS Act, while expressing skepticism about the effectiveness of sanctions alone in countering China's advancements.
• The investigation's findings, due within a year, could lead to tariffs and other measures under the Trump administration, which has signaled plans for aggressive trade policies, including higher tariffs on Chinese imports.

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