As President-elect Donald Trump is preparing to enter the White House as the 47th President of the United States, igniting a new round of trade war with China seems to be one of his main priorities.
Amidst the efforts to curb China’s chip manufacturing capabilities, the US Secretary of Commerce, Gina Raimondo, stands firm in her belief that the key to holding back China in the chip race is to outpace them. “We have to run faster, out innovate them. That’s the way to win,” Raimondo emphasized.
As the Wall Street Journal reported, Raimondo even called these efforts a “fool’s errand” while emphasizing that the $53 billion CHIPS and Science Act “matters more than export controls.”
While the Secretary of Commerce head believes in subsidizing chip manufacturing in the US, Donald Trump already called out the plan, suggesting that imposing tariffs “so high that they will come and build their chip companies for nothing.”
So far, the US administrations under both Trump and Biden have imposed multiple rounds of export restrictions on China, aiming to limit its access to modern AI chips and manufacturing equipment. Meanwhile, China’s local companies still manage to get their hands on the newest chips and use reverse engineering techniques to build localized versions.
A few weeks ago, the Department of Commerce under the Biden administration fired its last bullet at China and announced export bans on high-bandwidth memory (HBM) chips. However, China quickly fired back by banning the export of key minerals to the US. These minerals are mostly used in chip and weapon manufacturing.
Tension in China-US relationship under Trump is expected to escalate, with Trump threatening to impose a 60 percent tax on imported goods from China and imposing new export bans on the horizon. The move has made China rush to stockpile tons of US-made chips before Trump enters the White House.
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