Ongoing trade tensions between China and other countries, particularly the US, could impact the prospects of importing semiconductors from China in 2023. The US-China trade war has affected consumers and producers in both countries, as well as their trading partners1. The tariffs have reduced trade between the US and China, but the bilateral trade deficit remains broadly unchanged1.
According to Jeremy Mark and Dexter Tiff Roberts, authors of the Atlantic Council’s issue brief “United States–China semiconductor standoff: A supply chain under stress,” the US initiatives represent a profound turn toward competition with China in the high-tech realm2. They also highlight an effort to restructure the complex, multinational supply chains centered on East Asia that manufacture hundreds of billions of dollars of semiconductors a year2.
The raising of US tariffs to 25 percent on $200 billion of annual Chinese imports, together with the announced Chinese retaliation, marks the latest escalation in the US-China trade tensions1. The impact of previously imposed tariffs by the US and subsequent retaliation by China is already evident in trade data1. Both the countries directly involved and their trading partners have been affected by rising tariffs1.
Consumers in the US and China are unequivocally the losers from trade tensions1. Research has found that tariff revenue collected has been borne almost entirely by US importers1. Some of these tariffs have been passed on to US consumers, while others have been absorbed by importing firms through lower profit margins1. A further increase in tariffs will likely be similarly passed through to consumers1.
The effect on producers is more mixed, with some winners and many losers1. Some US and Chinese producers of goods competing in domestic markets with imports affected by tariffs, as well as competing third country exporters, are potential winners1.
In conclusion, ongoing trade tensions between China and other countries, particularly the US, could impact the prospects of importing semiconductors from China in 2023. The trade war has affected consumers and producers in both countries, as well as their trading partners. The situation remains fluid and it is difficult to predict how it will evolve in the future. Experts such as Jeremy Mark and Dexter Tiff Roberts suggest that the momentum to constrain Beijing’s semiconductor program is likely to continue in the coming months2.