Before you can say anything, Washington responded to Beijing’s move to target the giant American semiconductor company Nvidia, launching an investigation into “potential antitrust practices.”
On Monday, the eve of Christmas, the outgoing Biden administration’s Commerce Secretary, Gina Raimondo, announced that US antitrust authorities were launching an investigation to determine whether Chinese semiconductor companies were engaging in practices that “distort competition in order to gain a dominant position in the global market.”
“Nearly two-thirds of American products contain chips from China, which is worrying. Beijing is seeking to dominate this market, and given the methods used, we have seen companies hesitate to come and invest in the United States,” the American minister complained at a press conference.
The investigation, led by the Office of the White House Trade Representative (USTR), is set to determine whether China is implementing policies that create “dangerous supply chain dependency” for semiconductors.
Washington fears that Beijing is seeking to “undermine the competitiveness of American companies and workers, undermine key supply chains for the United States, and generally undermine the economic security of the country,” according to the USTR.
The Computer CHIPS Act
“The evidence shows that China is implementing a policy that allows it to dominate the industry, allowing its companies to quickly develop production capacity and offer artificially low prices that risk threatening and potentially eliminating competition,” explained USTR head Catherine Tai.
The United States is concerned about the competitive advantage that Chinese semiconductor companies enjoy from subsidies, favorable tax policies and all kinds of privileges that they enjoy from the central government in Beijing. However, Washington is already trying to revive semiconductor production in the United States with similar means.
Donald Trump did not have to return to the White House to implement the CHIPS Act. This is a legislation whose authorship undoubtedly belongs to Joe Biden. The legislation, effective from August 2022, provides for the allocation of up to $52 billion in subsidies to support infrastructure projects in the semiconductor industry.
Towards a general war
In this case, the investigation by the US authorities will focus on so-called mature semiconductors. These are chips that equip a wide range of products ranging from medical devices to telecommunications networks and cars. The investigation will begin on January 6 and will last 90 days. Therefore, it should continue under the presidency of Donald Trump, who will be sworn in on January 20.
Under Biden, the United States has already imposed a series of measures in recent years to limit Chinese companies’ access to advanced semiconductors as well as the equipment needed to manufacture them.
One argument Washington gives for imposing trade sanctions on Beijing is “the need to hinder China’s ability to produce and acquire the technologies necessary for its military modernization.” Beijing denounces Washington’s trade policy, accusing it of “politicizing trade and technology issues.”
However, since early December, China has been implementing retaliation against the United States on the grounds of the CHIPS Act, mainly imposing restrictions on exports of many rare metals to the United States, such as gallium and germanium. These are raw materials that are essential for the manufacture of semiconductors.
Everything indicates that in 2025 we are heading towards a generalized Sino-American trade war. Monday’s decision shows an escalation of war preparations by the Biden administration, which is responding to Beijing’s moves against Nvidia but at the same time laying the carpet for Donald Trump to proceed with the imposition of tariffs on Chinese imports at a rate of 60%.
