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Semiconductors Could be Next Target of National Security Review

Monday, May 15, 2017
Sandler, Travis & Rosenberg Trade Report

Secretary Wilbur Ross said the Department of Commerce is considering whether to initiate a section 232 national security investigation of imported semiconductors because of their “huge defense implications” and the fact that China is ramping up its domestic production, according to a Reuters article. Section 232 investigations can result in the imposition of tariffs, quotas, or other restrictions. The DOC is already conducting section 232 investigations of imported steel and aluminum and President Trump has directed that both be expedited.

However, the article quotes Semiconductor Industry Association President John Neuffer as saying his organization does “not believe a Section 232 investigation is the right tool to be applied to our industry.” Instead, the article states, the SIA “advocates open trade and increased access to international markets” because 80 percent of U.S. production is exported and nearly half of U.S. chipmakers’ production capacity is located overseas.

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