The older-style chips are crucial for a wide array of appliances and other machinery, including weaponry.The New York Times reports that the Biden administration has launched a trade investigation into China’s production of older types of computer chips. These chips are crucial for a wide range of appliances and machinery, including cars, dishwashers, telecom networks, and military weaponry. The inquiry could potentially lead to tariffs or other measures to block Chinese chips from entering the US market, but the final decision will be made by the incoming Trump administration.
The concern is that China’s heavy investment in manufacturing facilities has led to a flood of low-cost products in various industries, causing American companies and others to shut down. This has left Chinese firms in control of the global market. U.S. officials are worried that the semiconductor industry could be the next target. Chinese companies are rapidly expanding their production of chips, particularly the older types that are still used in many machines and appliances. China is also building more new semiconductor factories than any other country, which American officials argue could threaten the viability of chip plants in Europe and the United States.
Katherine Tai, the U.S. trade representative, stated that China’s policies are allowing its companies to offer artificially lower-priced chips, which could harm or even eliminate their market-oriented competition. This creates vulnerable supply chains that can be used to economically coerce other countries. The concern is that this could result in supply chain choke points, making countries dependent on China for these crucial components.
Source:Read More