On December 23, 2024, the Office of the United States Trade Representative (USTR) launched an investigation of China’s acts, policies, and practices related to targeting of the semiconductor industry for dominance. The investigation was launched under Section 301 of the Trade Act of 1974.
As basis for the investigation, the USTR stated that the “evidence indicates that China seeks to dominate domestic and global markets in the semiconductor industry and undertakes extensive anticompetitive and non-market means, including setting and pursuing market share targets, to achieve indigenization and self-sufficiency. China’s acts, policies, and practices appear to have and to threaten detrimental impacts on the United States and other economies, undermining the competitiveness of American industry and workers, critical U.S. supply chains, and U.S. economic security.”
The investigation will initially focus on China’s manufacturing of foundational semiconductors (i.e., mature node semiconductors). It will include an assessment of the impact of silicon carbide substrates or other wafers used as inputs into semiconductor fabrication. In addition, the investigation will also review “existing or threatened non-market capacity or overconcentration of semiconductor production in” China and the potential harm it poses to U.S. semiconductor producers and foundries.
Important Deadlines:
Parties wishing to participate in the public comment period can submit their comments starting January 6, 2025. The deadline for submission of comments is February 5, 2025. A public hearing has been scheduled for March 11-12, 2025. Parties wishing to testify must submit a request to participate, with a summary of their testimony, by February 24, 2025. Post-hearing rebuttal comments may be submitted within seven calendar days from the last day of the public hearing.
Specifically, the USTR is soliciting comments on the following:
- China’s acts, policies, and practices related to its targeting of the semiconductor industry for dominance;
• Anticompetitive and non-market means employed by the PRC in pursuit of its semiconductor industry targeting objectives (e.g., political guidance, directives, and control within state and private enterprises, market access restrictions, to name a few.);
• Whether China’s acts, policies, and practices are unreasonable or discriminatory;
• Whether China’s acts, policies, and practices burden or restrict U.S. commerce and, if so, the nature and level of the burden or restriction such as assessments of the burden or restriction on semiconductors, semiconductor manufacturing including foundries, silicon carbide substrates or other wafers, and downstream products with a particular focus on certain critical industries (e.g., defense, medical devices, aerospace, etc.)
• What action, if any, should be taken, including tariffs and non-tariff actions.
