Remember when Democrats criticized Trump for waging a trade war with China? Now it’s Biden’s turn.
The Biden Administration has plans starting next month to put pressure on United States Trade with China. The Commerce Department sent a cease and desist to several US corporations that trade with China. These letters order them to halt their dealings with China immediately. Some are quickly becoming codified rules.
Affected Companies
KLA Corp, Lam Research Corp, and Applied Materials Inc all said that they received Commerce Department letters with new regulations.
The new restrictions would halt chipmaking equipment shipments to Chinese factories. Specifically to factories that produce advanced semiconductors with sub-14 nanometer processes. Only specific licenses will allow them to get around this.
This ruling will also codify restrictions on Nvidia Corp and Advanced Micro Devices. Both companies received similar letters from the Commerce Department in August. New rules will bar them from shipping artificial intelligence computing chips to China without specific licenses.
Those letters take effect immediately, and only apply to the organizations receiving them. However, when they are codified, they will be broad and sweeping rules. “Is informed” letters are essentially a shortcut past the lawmaking process.
Biden’s Attack on China
These five companies are not the only ones to receive these letters. Biden is targeting China’s technological infrastructure in an effort to limit their capabilities.
Jim Lewis, a technology expert at the Center for Strategic and International Studies calls this a “choke point” strategy.
“The strategy is to choke off China and they have discovered that chips are a choke point. They can’t make this stuff, they can’t make the manufacturing equipment. That will change.”
Reuters was first to report on this story. They reported that The Chanmber of Commerce warned of imminent restrictions on AI chips and tools.
They issued this foreboding warning:
“We are now hearing that members should expect a series of rules or perhaps an overarching rule prior to the mid-term election to codify the guidance in recently issued (Commerce Department) ‘is-informed’ letters to chip equipment and chip design companies.”
They announced that they also plan to add several Chinese technology companies to a trade blacklist. Barring US companies from selling to China? Blacklisting Chinese companies? Sounds like a trade war to me.
Conclusion
So what is the grand scheme of Joe Biden’s trade war? For Donald Trump it was about securing American prosperity and demanding respect for American markets. For Biden, it’s a panic button for a war that he may have already started.
So far, as president, he has destroyed military recruiting and made us a foreign policy laughing stock. Is it possible that this will stop China from invading Taiwan? Unlikely. The impacts of these policies will be minimal on Chinese military capability in the near future. If this is how he plans to prevent an invasion of Taiwan, the President is in for a rude awakening.
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