Earlier, the US government implemented measures to limit the export of advanced US technology to China. Credit: IM Imagery/Shutterstock.

The US government is planning to launch a trade investigation into Chinese semiconductors, Bloomberg reported.

This move is said to be part of the government’s plans to reduce reliance on technology that US officials view as a national security risk.

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This probe may lead to tariffs or restrictions on imports of older-model semiconductors and products containing them, such as medical devices, cars, smartphones, and weaponry.

The investigation into foundational chips is expected to take months.

Government officials have debated initiating the investigation under Section 301, which allows the US to impose restrictions on countries with unfair trade practices.

In mid December 2024, White House officials agreed to proceed with the inquiry to protect the US chip industry.

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Earlier, the government implemented measures to limit the export of advanced US technology to China.

Furthermore, a law legislation was signed recently, providing billions in incentives for chipmakers to build factories in the US.

During 2023 and 2024, the White House has implemented export restrictions on advanced semiconductors made with American and allied technology.

Meanwhile, China has been able to produce older, widely available semiconductors at a lower cost than competitors.

Officials are concerned that without restrictions, Beijing will flood US and global markets with inexpensive chips, undercutting other companies.

In November 2024, China cautioned that it would take “necessary actions” to defend its companies if the US intensifies its restrictions on semiconductor.

In May 2024, the White House announced plans to increase tariffs on Chinese legacy semiconductors from 25% to 50% by 2025.

However, the officials believe this is insufficient to prevent future market disruption, especially as the US aims to boost domestic semiconductor production.