Step-by-step progress with China possible, says former US trade chief

China criticized expanded U.S. restrictions on its access to semiconductor technology, saying they’ll harm supply chains and the world economy.

The Biden administration on Friday published a sweeping set of export controls, including a measure to cut China off from certain semiconductor chips made anywhere in the world with U.S. equipment.

Last December, South Korean semiconductor company Magnachip reluctantly announced the demise of its proposed $1.4bn merger with Chinese private equity firm Wise Road Capital.

With the clash of the two superpowers, the economic implications of this friction could be much worse than the Russia-Ukraine war, according to billionaire investor Ray Dalio.

Economist Zhong Zhengsheng says the US might use tariffs in concert with the IPEF economic framework to restrict China’s economy

As President Joe Biden debates whether to lift Trump-era tariffs on Chinese imports, his cabinet is split over a politically fraught issue that could influence the November congressional midterm elections.

Combating inflation has been on President Joe Biden’s mind lately. But any mention of the high tariffs on Chinese imports that he inherited from the Trump administration has been critically absent from these discussions.

Technological innovation is one of the main fields of US–China competition. Competition in the semiconductor industry is a significant point of tension where the continued interference of US bureaucracies in the industry is a source of contention between the superpowers.

In light of high inflation and rising prices, the Biden administration announced it’s considering dropping its current tariffs on Chinese imports to ease inflationary pressures. The tariffs have indeed hurt both U.S. industry and workers. Another consequence of the U.S. imposed tariffs is that they invited retaliatory tariffs, primarily from China, on U.S. exports. Retaliatory tariffs have further hurt American firms and workers, with certain geographies and industries bearing the brunt of the impact.