Us Extends China Chip Curb Waiver For Allies' Fabs

At the same time, the Biden administration offered a one-year waiver to allow Taiwanese and South Korean chipmakers, such as TSMC, Samsung Electronics and SK hynix, to shiptools to their mainland fabs without having to apply for a licence. The exemptions were set to expire October this year.

Some analysts said the waiver can help prevent widespread disruption in the global semiconductor supply chain. But some others said the prolonged exemptions will reduce the effectiveness of thechip export control against China.

In June,Undersecretary of Commerce for Industry and Security Alan Estevez told an audience at an industry gathering that the government would extend exemptions for South Korean and Taiwanese chip suppliers with their facilities in China.

The Wall Street Journal reported on June 12 that thegovernment was considering the waiver extension in view of perceptions that it may have underestimated the complexity and effects of isolating China from the production of advanced technology.

Meanwhile, the Biden administration is reportedly monitoring whether US-sanctioned Chinese telgiant Huawei is constructing facilities under the names of other companies and indirectly purchasing American chip-making equipment in order to bypasssanctions. Bloomberg reported on Tuesday that Huawei is receiving an estimated US$30 billion in state funding for secretive chip production.

In the first seven months of this year, China's Foreign Direct Investment (FDI) fell 9.8% to US$111.8 billion from the same period of last year, according to the Ministry of Commerce.

For the same period, China's exports to thedecreased 18.6% to US$281.7 billion, according to the General Administration of Customs. The country's total exports dropped by 5% to 1.46 trillion. Some economists blamed the slowing economy in the West for the decline.

On August 17, theCommerce Department said it will set preliminary anti-dumping duties of 122.5% on tin mill steel imported from China, 7.02% on imports from Germany and 5.29% on imports from Canada to protect domestic steelmakers. No duties will be imposed on the steel products imported from Britain, the Netherlands, South Korea, Taiwan and Turkey.

China's duties were higher as a major producer refused to cooperate in the investigation while other respondents could not prove that they were independent of the Chinese government, according to a Commerce Department official.

“This is a major example of the United States' harsh measures against China's economy and trade,” Liu Xiaowei, a Hubei-based commentator, says in an article.“Aofficial said a lack of cooperation of a Chinese company led to an 'adverse inference' determination. What kind of hegemonic logic is this?”

Liu adds:“While themedia claimed that Raimondo's visit is aimed at strengthening communication with Beijing, we should maintain a clear mind and closely monitor the United States's actions. If thebecomes capriciagain after the talks, it is questionable whether Sinorelations will continue to improve.”

He says China should not place too many hopes on Raimondo's trip as the Biden administration's overall China strategy remains confrontational.

In March 2018, thenPresident Donard Trump ordered the imposition of 25% tariffs on steel imports and 10% tariffs on aluminium imports. The order mainly targeted China. It exempted imports from Canada and Mexico.

In April of the same year, China initiated a World Trade Organization (WTO) dispute complaint against the United States's extra tariffs.

On December 9 last year, the WTO said theSection 232 tariffs violated its rules because they were not imposed“in time of war or other emergency in international relations.” But on August 16 this year, the WTO said it recognized that theSection 232 actions on steel and aluminium are security measures, and that China illegally retaliated with sham“safeguard” tariffs.

“China's decision to pursue this dispute highlights its hypocrisy by both suing thein the WTO and at the same time unilaterally retaliating with tariffs,” said the Office of theTrade Representative.“China's use of the WTO dispute settlement system to challenge theSection 232 national security actions has caused grave systemic damage to the WTO.”

Wu Xuelan, a TV commentator, says in a recent video that if Washington wants to improve Sinorelations, it should cancel its additional tariffs imposed on China's steel and aluminium products. But if theimposes more sanctions on China after Raimondo's visit, she says, Beijing may rethink whether Chinese leaders should attend the APEC Summit in San Franciin November.

read: raimondo could ease the tech war while in china

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