China initiates semiconductor investigations before US trade discussions in Madrid

China Launches Two Investigations Against U.S. Semiconductor Sector

In a significant development, China has initiated two separate investigations targeting the U.S. semiconductor industry, signaling heightened tensions between the two global economic powers. These moves come ahead of critical trade discussions set to take place in Spain, focusing on trade relations, national security, and the ownership of TikTok.

The Chinese Ministry of Commerce announced an anti-dumping probe into certain analog integrated circuits (ICs) imported from the United States. This includes commodity interface IC chips and gate driver IC chips, which are commonly manufactured by leading U.S. companies such as Texas Instruments and ON Semiconductor. The investigation is part of broader efforts to address what China perceives as unfair trade practices by American firms.

In addition to the anti-dumping probe, the ministry also launched an anti-discrimination investigation into U.S. actions that have impacted China's chip industry. This move highlights Beijing's growing concerns over the U.S. government’s policies, which it claims are designed to hinder China's technological advancement.

Escalating Trade Tensions

The timing of these investigations coincides with the upcoming meeting between U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng in Madrid. The talks, scheduled to take place from Sunday to Wednesday, aim to address various issues, including trade and national security. A Chinese commerce spokesperson emphasized that U.S. measures such as export restrictions and tariffs are intended to "contain and suppress China's development" in high-tech sectors like advanced chips and artificial intelligence.

This latest development follows the U.S. decision to add 23 Chinese companies to its "entity list" on Friday. The list includes entities accused of posing threats to national security and foreign policy, with two companies specifically cited for allegedly acquiring chipmaking equipment for SMIC, a major Chinese semiconductor manufacturer.

Ongoing Negotiations and Diplomatic Efforts

The Madrid talks are part of a series of diplomatic engagements this year, including meetings in Geneva, London, and Stockholm. These negotiations aim to ease trade tensions and prevent the imposition of higher tariffs between the two nations. Despite the recent escalations, both sides continue to engage in dialogue, reflecting the complex nature of their economic relationship.

China's actions underscore its determination to protect its domestic semiconductor industry from what it views as external pressures. The country has been investing heavily in its own technology sector, aiming to reduce reliance on foreign components and achieve self-sufficiency in key areas.

Implications for Global Trade

The ongoing disputes between the U.S. and China have far-reaching implications for global trade and supply chains. As both nations seek to assert their influence in the tech sector, the semiconductor industry remains at the forefront of these tensions. The outcome of these negotiations could shape the future of international trade policies and technological innovation.

With the world watching closely, the coming weeks will be crucial in determining the direction of U.S.-China relations. The decisions made during these talks could have lasting effects on global markets, affecting everything from consumer electronics to national security strategies.