Trump's election victory could take the chip war between the US and China to a new level

Since President-elect Donald Trump's first term, the United States has used its trade restriction and sanctions powers to curb China's technological advances. Now that he returns to the White House, the semiconductor war between the US and China could escalate.

“If Trump takes office, he has already said in his campaign rhetoric that he will double and even tighten tariffs and export controls,” Arthur Dong, a professor at Georgetown University's McDonough School of Business, told Quartz in an interview before the election .

The Biden administration's efforts to slow China's advanced chip manufacturing capabilities continued during Trump's first term as president.

According to reports, the Biden administration was earlier this year Debate with export controls called foreign direct product rulewhich would impact companies in U.S. allies, including Japan's Tokyo Electron (TOELY+0.42%) and the Dutch chip machine manufacturer ASML (ASML-2.21%). The rule does not allow the export of goods to any country if it is made with a certain percentage of U.S. intellectual property components. This was reported later Some allies would be exempt when the rule is expanded.

“He (Trump) will likely go further than the Biden administration in imposing blanket tariffs on a much wider variety of goods,” Dong said.

Trump has already imposed restrictions on chip sales to China

A Chinese tech giant under Trump's first administration Huawei was added to the US Entity List in 2019 after the government found that she “engaged in activities that are contrary to the national security or foreign policy interests of the United States.” Other Chinese semiconductor companies were added to the list to block U.S. companies from shipping advanced chip manufacturing equipment.

Trump extended the ban on Huawei products until 2021, and trade restrictions on Huawei and other Chinese technology companies were only extended tightened under the Biden administration.

US-based chip equipment makers were reportedly affected before the election We are relying on more export controls under the Biden administration and communicated this to suppliers Fear of jeopardizing their status as a seller for the use of certain components supplied from China. The companies also reportedly asked their suppliers not to have Chinese investors or shareholders.

“Looking at the geopolitical landscape, I think it is clear that the US will continue to put pressure on its allies for further restrictions,” ASML chief Christophe Fouquet said said in October. “The question is: What is right for the Netherlands? What is right for Europe?”

Trump is not interested in protecting Taiwan

During his recent presidential campaign, Trump said he would impose tariffs on chips from Taiwan, which could have serious implications for global chip manufacturing since much of the world's most advanced chips are made by the Taiwan Semiconductor Manufacturing Company (TSM-1.14%). The Taiwanese chipmaker counts Nvidia (NVDA+4.08%) and Apple (AAPL-0.35%) as major customers.

In October, Trump accused Taiwan of stealing from the US chip industry during an online appearance The Joe Rogan Experience Podcast – a point he also made in July during an interview with Bloomberg Businessweek. In response to a question about Taiwan's support against Chinese aggression, Trump said the island had “taken away our chip business.”

“I mean, how stupid are we,” Trump said. “They took over our entire chip business. They are immensely rich.”

Instead, Trump said, Taiwan should pay the US to protect it.

“I don’t think we’re any different than an insurance policy,” Trump told Bloomberg. “Why? Why are we doing this?”

Trump is not a fan of the Chips Act

During his interview with Rogan, Trump also criticized – in part – the US CHIPS and Science Act, which was passed by the Biden administration in 2022 Stimulate domestic advanced chip manufacturing.

“This chip deal is so bad, we've allocated billions of dollars for rich companies to come and borrow the money and build chip companies here, and they won't give us the good companies anyway,” Trump said said on the podcast, adding that the US should instead impose tariffs on chips imported into the US

Over a dozen chipmakers, including U.S.-based Intel (INTC+7.63%), TSMC based in Taiwan and SK Hynix based in South Korea I'm still waiting for billions of dollars in funds and loans from the US CHIPS Act to build semiconductor centers across the US