China Opens Case at WTO Against US over Chips

China has initiated a suit at the World Trade Organization (WTO) against the US over what it views as punitive chip export control measures.

Saying it was simply defending its legitimate interests, China’s commerce ministry accused the US of threatening global supply-chain stability with trade protectionism practices.

In October, the US published a broad set of export controls designed to hamstring China’s progress in the semiconductor industry. Under the rules, Chinese companies cannot buy advanced chips and chip-making equipment without a license.

The launch of the suit is only the first step in what promises to be a drawn-out procedure. This is not the only commodity under trade dispute between the two countries. China is still aggrieved by events set in motion during the days of former President Donald Trump, whose administration slapped 25% tariffs on steel imports and 10% on aluminum imports in 2018. Free trade partners Canada and Mexico were later exempted.

China later opened a suit against those tariffs, with the WTO ruling against Washington in the last few days. The US has rejected the WTO’s findings.

US officials say the chip export controls were intended to protect national security interests. Trade disputes between major nations are not uncommon. However, many experts believe that large economies are jockeying for semiconductor domination as these products will form a vital part of computing infrastructure in the artificial intelligence and machine learning-enabled future.