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President Joe Biden’s administration is launching an investigation that will give President-elect Donald Trump an option about whether to impose new tariffs on Chinese-made semiconductor chips.
The White House announced Monday that it will launch an investigation into so-called foundational chips — also known as legacy or mature-node semiconductors — made in China. Although not as advanced as the chips that operate artificial intelligence, the older technology is ubiquitous in a wide range of applications, including autos, airplanes, medical devices and the telecommunications industry.
The move raises potential tariffs on an area that U.S. officials say could pose a national security threat if too much of it becomes concentrated under Chinese control.
“We need resilient supply chains for these chips, because we saw what happened during COVID when we needed a chip but we didn’t have it,” Commerce Secretary Gina Raimondo told reporters Sunday. Relying on foreign suppliers disrupted production lines and increased the cost of domestic goods, he said.
Raimondo and other US officials briefed reporters that China has expressed a desire to dominate the global chip market and is unfairly subsidizing the industry, but an investigation is necessary to take legal action.
The legislation authorizing it called for a Section 301 investigation, with the US Trade Representative first determining whether China’s actions have been “unfair” or “discriminatory” and burden American commerce. If so, a future administration could impose retaliatory tariffs, restrict imports — or recommend further action to the President and Congress.
The investigation will take several months and any decision will be left to Trump’s administration, which used similar trade powers to impose sweeping tariffs on imports from China. Trump said he would nominate Jameson Greer to be Trade Representative, replacing current Representative Katherine Tai.
Biden has moved to boost the US semiconductor industry, including through a bipartisan subsidy bill. This includes steps to limit exports of advanced technology to China.
US officials worry that China could flood the market with older, widely available types of chips and tighten its grip on the sector.
Earlier this year, the White House announced it would raise tariffs on Chinese legacy semiconductors from the current 25% rate to 50% by 2025.
With assistance from Jenny Leonard.
This article was generated from an automated news agency feed without any modifications to the text.
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