Letter to Secretary Raimondo on Foundational Semiconductors

Chairman Mike Gallagher (R-WI) and Ranking Member Raja Krishnamoorthi (D-IL) of the House Select Committee on the Strategic Competition Between the United States and Chinese Communist Party wrote to Commerce Secretary Gina Raimondo and United States Trade Representative Katherine Tai with concern that the People’s Republic of China (PRC) will flood the United States and world markets with subsidized foundational semiconductors, also known as legacy chips, to gain global dominance over the ‘lifeblood of a modern economy and a modern military.’

Gallagher and Krishnamoorthi urged the cabinet officials to stem U.S. reliance on PRC legacy chips by using all existing trade authorities and asked the officials if they have sufficient authority to implement “component tariffs” on PRC legacy chips within finished products, to counter the CCP's move to flood our markets.

The lawmakers write, “Urgent action is needed to prevent the PRC from dominating foundational chips, which would give the PRC excessive leverage over the modern global economy...If the United States becomes dependent on the PRC for foundational chips, our military and economic well-being may run the risk of being overly reliant on the Chinese Communist Party.”

They continue, “We urge USTR and the Department of Commerce to utilize all existing trade authorities to address the flow of PRC foundational semiconductors into the United States or to explain what new authorities or mechanisms are needed to protect our supply chains and our domestic producers of similar technology.”

Chairman Gallagher and Ranking Member Krishnamoorthi asked for a briefing within 60 days and answers to the following questions: 

• Does the United States have sufficient authority to establish “component tariffs” that impose import duties on the foundational chip itself, rather than the finished product?
• If not, what additional authorities are needed?
• How can the U.S. work closely with our key trading partners to ensure that the U.S. is not acting alone and that U.S. actions are coupled with intensified efforts to help create new markets for U.S. exports globally? 

Read the lawmakers' letter HERE.