Thanks to exemptions granted to various businesses by the government, President Biden is giving the go-ahead for South Korean and Taiwanese manufacturers of semiconductors to keep growing their operations in China.
The Biden administration imposed restrictions on IT exports to China in the latter part of last year. The regulations were created to stop American enterprises and international corporations that employ American technology from exporting chips to China, which is dependent on them.
However, several producers received one-year exemptions that permitted them to keep growing their semiconductor operations across China. These producers included Samsung, Taiwan Semiconductor, and SK Hynix.
The Wall Street Journal claimed this week that Biden officials had assured business insiders that the exemptions, which were due to expire in a few months, would be prolonged to allow semiconductor producers to continue expanding chip production in China.
According to the Journal:
‘The deadline for the exemptions was October. Attendees at a conference of the Semiconductor Industry Association said that Estevez stated that the exemptions are going to be extended for the foreseeable future.”
“According to industry insiders, the decision to prolong the exemptions instead of wind them down represents a realization by U.S. officials that attempts to isolate China from high-tech exports are more challenging than originally anticipated in a highly linked global market. Additionally, it comes as some international corporations protest Washington’s growing meddling in their corporate affairs.”
“Some multinational corporations have had their rule exemptions extended at a time when Biden and other top agency officials have made it clear that his team isn’t interested in disconnecting from China,” according to the article.
At the G7 Summit last month, Biden stated, “We’re not attempting to disconnect from China; we’re wanting to reduce the risk of and diversify our ties with China. That requires taking measures to diversify our supply chains, and we are not — so we are not dependent on any one nation for the product needed,” the speaker said.
Similarly, in April, Treasury Secretary Janet Yellen stated that the globe would become “disastrous” and “destabilizing” if the United States broke its relationship with China.
“As I’ve already stated, the United States will act decisively to protect its critical interests,” according to Yellen. “We do not, however, want to ‘decouple’ our economic situation from China’s. Our economies could not coexist fully, which would be detrimental to both nations.”