Trade Tensions Rise as China Targets US Chip Industry Ahead of Key Discussions in Spain
In a move that has heightened trade tensions, China has initiated two investigations into the American semiconductor industry. This comes just before the two countries are scheduled to engage in crucial trade discussions in Spain. The discussions are set to cover topics such as trade, national security, and the control of a popular social media platform.
China's trade department revealed that it has commenced an anti-dumping investigation focusing on specific analog IC chips that are imported from the United States. The probe is expected to zero in on certain commodity interface IC chips and gate driver IC chips, typically produced by American firms.
China Takes On US Measures
In a separate move, the same department declared another investigation. This one is an anti-discrimination probe aimed at measures taken by the United States against China’s semiconductor industry.
In the upcoming days, the US Treasury Secretary is expected to have a meeting with the Chinese Vice Premier in Madrid, as confirmed by the latter's office.
As per a spokesperson from the Chinese trade department, they believe that American actions, such as export restrictions and tariffs, "are an effort to restrict and suppress China's growth in high-tech industries" which includes areas like advanced computer chips and artificial intelligence.
US Adds Chinese Companies to Entity List
The announcement of these probes by China comes on the heels of the United States adding 23 Chinese companies to an "entity list". These businesses will face restrictions because of alleged activities against US national security and foreign policy interests. This list includes two Chinese companies that are suspected of procuring chipmaking equipment for a leading Chinese chipmaker.
Forthcoming Madrid Talks Aim to Ease Trade Tensions
The upcoming meetings between the US Treasury Secretary and the Chinese Vice Premier in Madrid are part of a series of negotiations intended to alleviate trade tensions and defer the imposition of higher tariffs on each other’s products.
Both countries have had prior discussions in various cities such as Geneva in May, London in June, and Stockholm in July. Both governments have agreed to several 90-day breaks on a series of escalating reciprocal tariffs, thereby averting a full-blown trade war.
The Treasury Secretary has previously described the talks during the last round in Stockholm as "very comprehensive" and emphasized the need to "de-risk with certain, strategic industries, whether it’s the rare earths, semiconductors, medicines, and we discussed what we could do together to achieve balance within the relationship."