The case for tariffs on more Chinese chips

To combat this and future Chinese market threats to American national security, Congress should reinstate and modernize Section 421 of the 1974 Trade Act to allow the federal government to evaluate and recommend tariffs to the President for specific Chinese imports. While China struggles to produce advanced chips that companies like TSMC in Taiwan manufactures, the Chinese Communist Party hopes to eventually dominate low-end legacy chip production-chips that are used in everything from everyday appliances to military technology. While the U.S. government has taken steps to prevent the PRC from obtaining the tools to produce more advanced chips through the CHIPS Act, it has not addressed Chinese legacy chip production. Section 421's definition of a "Threat" is intentionally broad, stating that if a Chinese product is imported into the U.S. "Under such conditions as to cause or threaten to cause market disruption to the domestic producers of a like or directly competitive product, the President shall proclaim increased duties or other import restrictions." The case for Chinese legacy chips easily satisfies these requirements. In 2009, President Obama implemented Section 421 on Chinese tire imports-the only time a President has implemented Section 421 recommendations. " In the case of legacy chips, Section 421 tariffs could work in tandem with the $2 billion set aside in the CHIPS Act to build up domestic legacy chip manufacturing. To get around Section 421 tariffs, the PRC could still produce Chinese-made chips elsewhere-a problem the Biden Administration had to resolve after implementing the CHIPS Act.