Us Japan Semiconductor Agreement Reddit

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The direction of trade policy in the 1990s was entirely influenced by the interaction with the general state of the economy, as it had been in the mirror of time in the 1980s. When the Clinton administration took office in 1993, the ultimate imperative was “the economy, stupid.” America`s economic situation abroad was largely tinged by the realities of the 1980s: a severe macroeconomic imbalance, linked to lax fiscal policy and strict monetary policy and a sharp erosion of international market share and “competitiveness” in the main manufacturing sectors. Japan was seen as the greatest threat of competition which, to the extent possible, should be questioned and rewarded where it is not. Indeed, one of the main points of the agreement between the new economic team of the Clinton administration, which took office, was that American politicians could take off their gloves after the end of the Cold War with Japan. Export controls were too broad economically, even though they limited U.S. sales of products that did not endanger U.S. national security to Huawei or HiSilicon. If, for example, concerns stemming only from the base stations of the telecommunications equipment sector cut off exports from the U.S. semiconductor industry for huawei smartphones, that would be unnecessary and excessively costly.

The latest government restrictions do more than close technology exports to China. The policy limits some U.S. sales to third countries, even if they are U.S. military allies. U.S. semiconductor manufacturers, for example, cannot sell their equipment to large semiconductor manufacturers in South Korea or Taiwan if companies want to use U.S. tools to sell something to sell to Huawei, the Chinese telecommunications company, which is targeted by the government as a threat to national security. The industry has been put in the crosshairs of Trump`s policy. Nearly a quarter or $49 billion of the total annual revenue of the U.S.

semiconductor industry comes from sales to Huawei and other Chinese companies. [14] However, despite the strong performance of the sector`s exports in 2020, it provided only 5% of China`s semiconductor imports (Chart 4). Geographically, chips from Taiwan and South Korea were China`s largest sources of supply abroad. Third, Huawei could do more than stop future purchases of U.S.-designed semiconductors. If huawei fails financially or sees no future relationships with U.S. companies, Huawei could end the payment of billions in royalties it owes U.S. companies for the use of previous technologies. 5. In 2019, Chinese imports amounted to $359 billion (34%) and Hong Kong`s imports amounted to $167 billion (16 percent) of global imports of semiconductors ($969.7 billion of products, classified under harmonized system codes (SH) 8541 and 8542), and semiconductors ($85.6 billion in products according to HS 8486).

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