The Office of the U.S. Trade Representative (USTR) has launched an investigation into China’s anti-competitive trade practices into its semiconductor industry. According to the statement made by the White House; USTR scrutinizes China’s “policies and practices that reduce or eliminate market competition.”
This investigation is being conducted under Section 301 of the U.S. Trade Act of 1974 and aims to examine the trade practices of “essential” semiconductors used in industries such as automotive, healthcare, infrastructure, aerospace and defense. The White House claimed that China engaged in “industrial targeting” with “non-market policies and practices” in the semiconductor sector, stating that this situation seriously harmed competition and created “dangerous supply chain dependencies.”
If the investigation determines to take action against China, the USTR may, under Section 301, “impose tariffs or import restrictions,” “suspend trade agreement privileges,” or reach an agreement with China to eliminate such conduct or to provide the U.S. may request appropriate commercial benefits. It was stated that the final decisions will be made by the President Biden administration and the newly appointed Trade Representative Jamieson Greer.
In his statement regarding the US investigation, the spokesperson of the Chinese Ministry of Commerce said that China “strongly condemns and firmly rejects this situation.” The ministry also emphasized that China will “take all necessary measures” to resolutely defend its rights and interests.
Trade tensions between the USA and China are increasing
Trade tensions between the USA and China are increasing, especially in strategic areas such as semiconductor technologies. President Biden examined China and some other countries in February for potential security vulnerabilities and threats through connected vehicles. In addition, other strategic moves of the Biden administration on technology and supply chains are among the factors that increase the tension between the two countries.