China Initiates Investigations into U.S. Semiconductor Imports

China has launched two investigations targeting the U.S. semiconductor industry, a move that comes just ahead of critical trade talks set to take place in Madrid this week. The investigations, announced by the Ministry of Commerce, include an anti-dumping probe into specific analog integrated circuit (IC) chips imported from the United States and a separate inquiry into U.S. practices affecting China’s chip sector.

The anti-dumping investigation focuses on commodity interface IC chips and gate driver IC chips, products commonly associated with major U.S. manufacturers such as Texas Instruments and ON Semiconductor. In a statement, a spokesperson from the Chinese commerce ministry claimed that recent U.S. measures constitute “the containment and suppression of China’s development of high-tech industries,” particularly in sectors like advanced computer chips and artificial intelligence.

The timing of these investigations is significant, as U.S. Treasury Secretary Scott Bessent is scheduled to meet with Chinese Vice Premier He Lifeng in Madrid from July 16 to July 19, 2023. These discussions will address not only trade but also national security issues and the ownership of the social media platform TikTok.

Just prior to the announcement of the probes, the U.S. added 23 Chinese companies to its “entity list,” which restricts their ability to access certain technologies and resources. Among those listed are two companies accused of acquiring chipmaking equipment for SMIC, a significant Chinese chipmaker.

The Madrid meetings represent the latest in an ongoing series of negotiations aimed at alleviating trade tensions between the two nations. These discussions follow previous meetings in Geneva, London, and Stockholm, where both sides have sought to postpone the implementation of higher tariffs on each other’s goods.

During the last round of talks in Stockholm, Bessent described the discussions as “very fulsome,” indicating a willingness to explore collaborative solutions. He emphasized the need to “de-risk” strategic industries, such as rare earths, semiconductors, and medicines, and to find a balanced approach within the relationship between the U.S. and China.

U.S. policies restricting China’s access to advanced semiconductors have been in place for several years, initiated under former President Donald Trump and continued by President Joe Biden. While U.S. officials maintain that these restrictions are necessary for national security, Chinese authorities argue that they serve as part of a broader strategy to hinder China’s growth and technological advancement.

As the trade talks unfold in Madrid, the outcome could have significant implications for the global semiconductor market and the economic relationships between these two major powers.