Biden launches new Chinese chips trade probe, will hand off to Trump

The Biden administration announced a last-minute trade investigation into older Chinese-made “legacy” semiconductors.

The Biden administration announced on Monday a last-minute trade investigation into older Chinese-made "legacy" semiconductors that could heap more U.S. tariffs on chips from China that power everyday goods from autos to washing machines to telecoms gear.

U.S. Trade Representative Katherine Tai said the probe aims to protect American and other semiconductor producers from China's massive state-driven buildup of domestic chip supply.

The "Section 301" probe, launched four weeks before President-elect Donald Trump takes office on January 20, will be handed over to his administration in January for completion, Biden administration officials said.

The effort could offer Trump a ready avenue to begin imposing some of the hefty 60% tariffs he has threatened on Chinese imports.

Departing President Joe Biden has already imposed a 50% U.S. tariff on Chinese semiconductors that starts on January 1. His administration also has tightened export curbs on advanced artificial intelligence and memory chips and chipmaking equipment.

Legacy chips use older manufacturing processes introduced more than a decade ago and are often far simpler than chips used in AI applications or sophisticated microprocessors.

U.S. Commerce Secretary Gina Raimondo said on Monday her department's research showed that two-thirds of U.S. products using chips had Chinese legacy chips in them, and half of U.S. companies did not know the origin of their chips including some in the defence industry, findings that were "fairly alarming."