The America-China Chip War: Origin, Causes, Impacts, and Remedies

THE AMERICA-CHINA CHIP WAR: ORIGIN, CAUSES, IMPACTS, AND REMEDIES
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The America-China Chip War: Origin, Causes, Impacts, and Remedies
Introduction
The Chip War between America and China is a recent manifestation of the trade war between the two countries that broke out in 2018 with the imposition of massive tariffs on Chinese products by the Trump Administration. Despite a decades-long trade partnership between the two countries, this radical shift in American trade policy ignited a series of chain reactions characterized by banning and imposing taxes on imports by both countries, leading to a full-fledged trade war. Ultimately, after continuous imposition of trade bans and tariffs, the Chinese government resorted to thrusting the semiconductor industry into the war by announcing a ban on the export of minerals required for the production of computer chips to the United States. Similarly, the U.S. Commerce Department also altered the famous trade regulation, called the Entry List, by imposing stricter limits on the transfer of U.S. technology abroad, especially to China. This limit was further extended to include the export of computer chips to China. Finally, the imposition of restrictions on the sales of Huawei products for security and trade concerns brought the focus of the trade war between the two countries to the silicon and semiconductor industry.[Singh, Gunjan. "China-US Trade War: An Overview." Manag Econ Res J 5, no. 2019 2019.] [Miller, Chris. "Chip War: The Fight for the World's most critical technology." 2022.]
The geopolitical, social, economic, and even environmental implication of this version of the trade war between the two countries is worth paying attention to avoid any long-lasting impact on global economic and political stability. Despite efforts and negotiations to curtail the extent of this war, new and sweeping restrictions announced by the Biden administration to limit China’s access to the American semiconductor industry, even from American allies, is a case in point. Therefore, it is crucial to understand the history, nature, dynamics, and stimulants of this chip war between America and China to come up with some resolution. The following discussion offers a detailed analysis of this trade war based on facts and figures that would help estimate the possibility of a radical solution.[Jin, Keyu. "How China Is Fighting the Chip War With America." The New York Times - Breaking News, U.S. News, World News, and Videos. Last modified October 28, 2022. /2022/10/27/opinion/china-america-chip-tech-war.html.]
U.S. China Chip War: Historical Context
Careful estimates of the timeline of the chip war reveal that Trump Administration’s successive and massive trade impositions on China since 2018 forced China to retaliate in kind, and this retaliation finally and naturally dragged the semiconductor industry onto the battlefield. Donald Trump initiated a trade war with China to avoid the monopoly of Chinese products in the American market by imposing a 30% tariff on Chinese solar panels in 2018. Later, a 20% tariff was imposed on the import of Chinese washing machines, and taxes and tariffs were increased by 50% on other Chinese products....