The 47th President-elect of the United States had made these remarks of levying tariffs on China even during campaign and also during his post-election victory address to his supporters.
Wood calls this a negotiating tactic.
“Trump wants to threaten to raise tariffs to such an extent that overseas cos will want to move production to US,” Wood said in an interaction with CNBC-TV18 during the Global Leadership Summit last week.
In 2022, the US Commerce Department had restricted the ability of companies like Nvidia and AMD to export top AI-related chips to China. It also asked chip equipment makers like Lam Research, Applied Materials and KLA to restrict tools to make advanced chips to China.
The Biden Administration, in September this year, rolled out new export controls on critical technologies, including quantum computing and semiconductor goods, as China made advances in the global chip industries. The new rules covered quantum computers and components, advanced chipmaking tools, some components and software related to metals and metal alloy, along with high-bandwidth chips, a critical component for AI applications.
The US commerce department cited national security and foreign policy reasons behind the move and that it was a product of extensive discussions with international partners.
Wood added under a Democrat-leadership, the policy would have been a status-quo, which would have meant further deterioration of the US-China relationship.
“What China most dislikes is the aggressive US stance of depriving China of advances semiconductor policy. China would willingly trade higher tariffs for opportunity to buy advanced semiconductors,” Wood said.
In the first half of 2024, China spent $24.73 billion on chipmaking equipment, which was more than the combined spending of South Korea, Taiwan, North America, and Japan, according to data from SEMI, a global semiconductor industry association. Annual spending on chipmaking equipment had increased from $28 billion in 2022 to $36.6 billion in 2023.
