Expect significant new tariffs on Chinese imports and moderate levies on goods from other nations , as President-elect Donald Trump rolls out his protectionist agenda. However, with his preference for chaotic policymaking and sudden shifts , there’s uncertainty on how soon these import taxes will actually hit. Dubbed “ Tariff Man ,” Trump aims to use tariffs both strategically and tactically . He’s mentioned taxing all Chinese goods up to 60% and potentially setting 10%-20% tariffs on imports globally , but details on these plans remain vague . Key players within Trump’s team are divided: Robert Lighthizer , a staunch tariff advocate, sees permanent duties as crucial to balance US trade , while others, like billionaires John Paulson and Scott Bessent , view tariffs as temporary leverage. Trump’s previous administration had mixed feelings, especially on national security-related trade limits , which he sometimes dismissed, favoring an “open for business” approach. High-profile busin
The Biden administration is set to announce a new rule next month that will expand the United States' authority to restrict exports of semiconductor manufacturing equipment to China from certain foreign countries, according to sources familiar with the matter.
However, the rule will exempt key allies that export crucial chipmaking equipment, such as Japan, the Netherlands, and South Korea, thereby limiting the overall impact. Major equipment manufacturers like ASML and Tokyo Electron will remain unaffected.
Rule Details and Scope
The new rule, an extension of the Foreign Direct Product rule, aims to prevent approximately half a dozen Chinese fabs involved in advanced chipmaking from receiving exports from numerous countries. Nations affected by the rule include Israel, Taiwan, Singapore, and Malaysia. Specific Chinese fabs to be impacted were not disclosed.
A spokesperson for the US Commerce Department, which manages export controls, declined to comment.
Strategic Objectives
The rule is part of broader US efforts to curb advancements in Chinese supercomputing and artificial intelligence (AI) that could bolster the Chinese military. The US had already imposed export controls on chips and chipmaking equipment for China in 2022 and 2023.
This new rule exemplifies Washington's strategy to maintain pressure on China's semiconductor sector while avoiding conflicts with key allies.
Mechanism of the Rule
The Foreign Direct Product rule enables the US to control the sale of products made with American technology, even if these products are manufactured in foreign countries. This rule has been used to restrict chips made abroad from being sold to Chinese tech giant Huawei, which has since pivoted to focus on advanced chip production and development.
Additional Measures
The new export control package will also lower the threshold for US content that determines when foreign items fall under US control, effectively closing a loophole in the existing rule. For instance, equipment could be controlled simply because it contains a chip with US technology.
Moreover, the US plans to add around 120 Chinese entities to its restricted trade list. This will include several chipmaking factories, toolmakers, providers of electronic design automation (EDA) software, and related companies.
Diplomatic Considerations
The planned rule is currently in draft form and could undergo changes. The goal is to publish it in some form next month. Exemptions are planned for over 30 other countries that are part of the A:5 group, indicating the need for diplomatic sensitivity.
The US Commerce Department states that it categorizes countries based on factors like diplomatic relationships and security concerns to simplify export control regulations and ensure secure international trade.
Conclusion
The planned exemptions underscore the importance of diplomacy in implementing export controls. “Effective export controls rely on multilateral buy-in,” said a US official. “We continually work with like-minded countries to achieve our shared national security objectives.”
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