FX.co ★ US tightens grip on chip trade with China

In the rapidly evolving world of technology, semiconductor chips have become hot commodities. And as China seeks more access to them, the United States is ensuring its tech treasures remain shielded. According to a recent report from Reuters, the US administration is gearing up to further restrict China's access to its coveted semiconductor chips. Joe Biden’s administration intends to reinforce current limitations related to AI technologies and semiconductor production tools. This move aims to plug a loophole that previously allowed China to obtain American chips. At present, overseas subsidiaries of Chinese corporations have had almost unrestricted access to these products. The primary concern fueling this tightening of trade restrictions is the potential smuggling of US chips into China. To mitigate these fears, the White House is considering a strategy to block any possible routes that give China access to American technologies. These restrictions are intended specifically for Chinese users, as highlighted by US officials. Earlier in October, Reuters shed light on the US intentions to take a firmer stance in the ongoing "chip war" with China. The rumored regulations suggested a potential embargo on the export of chips and chip-making technologies to China, which would effectively cut China off from a vast array of semiconductor production technologies. There were also talks of obstructing the delivery of these products to China via third-party nations. In September 2023, the US Department of Commerce made the groundbreaking decision to prohibit China from using US subsidies to fund semiconductor production. The restrictions extended to directing these funds for expansion in foreign countries, including both China and Russia. Additionally, a ban was placed on collaborative research and the licensing of technologies developed with the help of organizations deemed untrustworthy by the United States.