Stay up to date with the CriptoTendencia WhatsApp channel: Instant news about Bitcoin, Altcoins, DeFi, NFT, Blockchain and Metaverse. Subscribe!
The Biden administration has launched a new trade investigation into legacy Chinese semiconductors.
This move seeks to impose more tariffs on chips that power products such as cars, washing machines and telecommunications equipment.
The investigation under Section 301 of the Trade Act of 1974 is presented as a strategic measure to protect the American technology industry and mitigate China’s influence in this key sector.
More Read
A problematic legacy: the goal of Chinese chips
Legacy semiconductors use mature manufacturing processes and are essential in mass consumer products. However, its low sophistication does not diminish its impact on the global economy. According to US Trade Representative Katherine Tai, China has built massive industrial capacity to dominate this segment, using state subsidies that distort the global market.
We see in the graph, as if to give us a more than approximate idea, that the revaluation of the manufacturing of Asian Chips is totally on the rise: so far this year it has increased by almost 90%. Source: Yahoo Finance.
These chips, although less advanced than those used in artificial intelligence or sophisticated microprocessors, have critical applications. They are found in industries such as automotive, medical devices, and telecommunications.
This ability of China to produce chips at low cost threatens to displace market-oriented competitors.
A plan inherited by Trump
The investigation, launched weeks before Donald Trump once again assumes a role in politics, offers a point of strategic continuity. Trump could use the findings of this investigation to impose 60% tariffs on Chinese semiconductors. The move follows the tariff policies of his first administration, which led to a protracted trade war with Beijing.
Joe Biden, meanwhile, had already established a 50% tariff on Chinese semiconductors that will begin to be applied on January 1. Additionally, his government tightened restrictions on the export of advanced chips and semiconductor manufacturing equipment to China.
The scope of this research is not limited to semiconductors as individual products. It will also analyze its incorporation into derived components and final goods in critical sectors. These include the defense, automotive and medical device industries.
Additionally, the US government is evaluating Chinese production of silicon carbide wafers and substrates, critical to semiconductor manufacturing. This analysis aims to determine how these practices affect global competitiveness and discourage investment in other countries.
Alarming technological dependence
US Secretary of Commerce Gina Raimondo revealed worrying data about the current market. Two-thirds of American products containing semiconductors use legacy Chinese chips. Even more alarming, half of American companies do not know the origin of these components, even in sensitive sectors such as defense.
The COVID-19 pandemic highlighted the vulnerabilities of global supply chains. The disruption in semiconductor production affected key industries such as automotive and medical equipment. Given this situation, the US has allocated $52.7 billion to strengthen its production, research and development capacity in this strategic sector.
China: a giant that worries
China plans to build more than 60% of global legacy chip capacity in the next decade.
This ambitious project has raised concerns in Washington as it may discourage investment in other countries. According to Raimondo, these practices constitute unfair competition and endanger the technological independence of the United States.
“Dependency on China for chips that we use daily in countless products weakens our economic and technological security,” Raimondo said.
A continuous commercial front
Although Biden and Trump have had a tense election campaign, both agree on maintaining firm policies towards China.
Biden has maintained the tariffs imposed by Trump, and even increased them in key areas such as Chinese electric vehicles, with the aim of protecting the US market.
The new investigation under Section 301 could mark a milestone in US trade policy and define the future of its technology industry. Meanwhile, the country seeks to strengthen its position in an increasingly competitive and strategic market.
Related
Crypto Keynote USA
For the Latest Crypto News, Follow ©KeynoteUSA on Twitter Or Google News.
