Mike Gallagher (R-Wis.), Chairman of the Select Committee on the Chinese Communist Party (CCP), and Ranking Member Raja Krishnamoorthi (D-Ill.) have voiced concerns over the United States' potential dependence on foundational semiconductors from the People's Republic of China (PRC). The lawmakers are urging action to thwart China's dominance in the semiconductor industry.
"Urgent action is needed to prevent the PRC from dominating foundational chips, which would give the PRC excessive leverage over the modern global economy," Gallagher stated.
In a letter addressed to Commerce Secretary Gina Raimondo and United States Trade Representative Katherine Tai, the legislators expressed their apprehensions about these semiconductors, also known as "legacy chips." They highlighted both economic and military implications, advocating for the power to impose "component tariffs" on these chips to "counter the CCP's move to flood our markets", according to a press release from the Select Committee on the CCP.
The lawmakers warned in their letter that 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 further urged that "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."
According to a press release from their committee, they requested a briefing within 60 days. This briefing would address various questions such as whether "the United States has sufficient authority to establish 'component tariffs' that impose import duties on the foundational chip itself, rather than the finished product," and if it can "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."
The Select Committee on the CCP, chaired by Gallagher, was established to counter the influence of the Chinese Communist Party. The bipartisan committee is committed to "working on a bipartisan basis to build consensus on the threat posed by the Chinese Communist Party and develop a plan of action to defend the American people, our economy, and our values". Its members include Representatives such as Michelle Steel (R-Calif.), Andy Barr (R-Ky.), Shontel Brown (D-Ohio), Jake Auchincloss (Mass.), among others.
