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U.S. Takes Aim at China’s Production of Essential Chips

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The older-style chips are crucial for a wide array of appliances and other machinery, including weaponry.The Biden administration on Monday initiated a trade investigation into China’s production of older types of computer chips that are integral for cars, dishwashers, telecom networks and military weaponry.The probe could ultimately result in tariffs or other measures to block Chinese chips from entering U.S. markets, though the decision of which, if any approach to take would fall to the incoming Trump administration.In industry after industry — from steel and ships to solar panels and electric vehicles — China has pumped money into building world-class manufacturing facilities, creating a surge of low-cost products that ultimately flood global markets. American companies, along with firms in many other countries, finding themselves unable to compete, have shut down, leaving Chinese firms largely in control of the global market.United States officials have been worrying that the semiconductor industry could be next. Chinese companies have been massively ramping up their production of chips, particularly the older types of semiconductors that continue to power a wide array of machinery and appliances. China is building more new semiconductor factories than any other country, a development that American officials argue threatens the viability of chip plants in Europe and the United States.Katherine Tai, the United States Trade Representative, said in a call on Sunday that China’s policies were enabling its companies to rapidly expand and to “offer artificially lower-priced chips that threaten to significantly harm, and potentially eliminate, their market-oriented competition.”That resulted in supply chains that “are more vulnerable and subject to supply chain choke points that can be used to economically coerce other countries,” she said.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Biden Prepares to Target Chinese Legacy Chips With Trade Investigation

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    The investigation could result in tariffs on older types of chips from China, though the decision would ultimately fall to Trump.The Biden administration is preparing a trade investigation into China’s production of older-model semiconductors, in response to fears that the United States’ growing dependence on these products could pose a national security threat, according to people familiar with the matter and government and industry documents reviewed by The New York Times.The investigation could ultimately result in tariffs, import bans or other actions on certain Chinese chips and the products that contain them. But the decision about what course to take would fall to the incoming Trump administration. The Biden administration may initiate its investigation in the coming weeks, but it would most likely take at least six months to conclude.The U.S. government has already tried to clamp down on China’s access to the most advanced types of semiconductors due to national security concerns. But it has largely left untouched China’s production of older types of chips, which are still vital for powering a huge swath of products including smartphones, cars, dishwashers, refrigerators and weaponry, along with American telecommunications networks.But with Chinese companies and the government now investing heavily in new factories, or fabs, to make those “legacy” or “foundational” chips, U.S. officials are concerned that Chinese production could put chip factories in the United States or allied countries out of business. That could increase U.S. supply chain dependence on China and potentially pose cybersecurity threats as those chips are integrated into American infrastructure or weaponry.“China is subsidizing those chips in these new fabs, dumping them into the global market and tanking the price,” Gina Raimondo, the commerce secretary, said at the Reagan National Defense Forum in Simi Valley, Calif., on Dec. 7. “That isn’t fair. And there may be a case for tariffs on that.”The Biden administration has been weighing whether to proceed with a trade investigation under two different laws. One is Section 232 of the Trade Expansion Act, which focuses on threats to national security and falls to the Commerce Department. The other option is Section 301 of the Trade Act of 1974, which applies to acts that are “unjustifiable” or “unreasonable” and burden U.S. commerce, and is carried out by the Office of the United States Trade Representative.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Is Trump More Flexible on China Than His Hawkish Cabinet Picks Suggest?

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    President-elect Donald J. Trump is assembling a team of aides bent on confrontation with China. But he also has advisers who do business there, including Elon Musk.They are the new class of cold warriors, guns pointed at China.President-elect Donald J. Trump has chosen cabinet secretaries and a national security adviser who stress the need to confront China across the entire security and economic spectrum: military posture, trade, technology, espionage, human rights and Taiwan.Those choices could open a new era of conflict with a nuclear-armed nation that has the world’s largest standing army and second-largest economy, and where many top officials see the United States as a superpower in decline.Mr. Trump’s hawkish advisers so far include Marco Rubio, a Florida senator named as secretary of state; Michael Waltz, a Florida congressman tapped for national security adviser; and Pete Hegseth, a former Fox News television personality designated to be defense secretary. Cabinet secretaries must be confirmed by the Senate, although Mr. Trump has floated the idea of getting around that by using recess appointments.Those men are more explicitly hostile to China than their counterparts in the Biden administration, though President Biden has taken an aggressive tack with China and continued some of the policies from Mr. Trump’s first term. A consensus has solidified among Democrats and Republicans in Washington that China must be constrained because it is the nation most capable of upending American global dominance.Yet there are signs that Mr. Trump might consider a more moderate approach on trade, perhaps to avoid upsetting a roaring stock market nurtured by Mr. Biden.Mr. Trump with President Xi Jinping of China in Beijing in November 2017. Mr. Trump hosted Mr. Xi at Mar-a-Lago earlier that year, but their budding relationship eventually fell apart over a trade war that Mr. Trump started.Doug Mills/The New York TimesWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Trump’s Tax Proposals Face a Fiscal Reckoning

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    No tax on tips? Lower corporate taxes? No tax on Social Security benefits?The slew of tax cuts President-elect Donald J. Trump proposed in loosely defined slogans over the course of his victorious campaign will now face a fiscal reckoning in Washington. While Republicans are poised to control both chambers of Congress, opening a path for Mr. Trump’s plans, the party is now grappling with how far they can take another round of tax cuts.Mr. Trump’s ambitions for a second term will ultimately have to compete with the signature accomplishment from his first: the giant tax package that Republicans passed and Mr. Trump signed into law in 2017. Large swaths of that tax cut expire at the end of next year, setting up an expensive debate that could overshadow Mr. Trump’s other goals.“Nobody wants to acknowledge at all the sheer enormity of the challenge,” said Liam Donovan, a Republican strategist. “There’s a reckoning coming.”Unlike in 2016, when Mr. Trump’s victory surprised many in Washington, Republicans have spent months preparing for their return to power. They have been discussing using a fast-track budget process that skirts the supermajority requirement for legislation in the Senate, a tactic that would allow for a party-line passage of more tax cuts if Republicans ultimately keep control of the House.But lawmakers and advisers to Mr. Trump are undecided about how much money they can commit to lowering the nation’s taxes again. The cost of just preserving the status quo is steep. The nonpartisan Congressional Budget Office has estimated that continuing all of the expiring provisions would cost roughly $4 trillion over a decade, and Mr. Trump’s campaign proposals could add trillions more to the debt.In interviews before the election, some Republicans said the party would have to show some fiscal discipline.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Trump’s Economic Plans Could Worsen Inflation, Economists Say

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    Many Americans fretted about inflation as they headed out to vote. But Donald J. Trump’s approach comes with risks of a renewed boost.Americans have been chafing against higher prices for years now, propelling unhappy voters to the polls and helping to deliver the White House to the Republican candidate, Donald J. Trump.But how Mr. Trump’s policies would help on costs is unclear. And in fact, many economists have warned that his proposals could instead make inflation worse.Inflation measures how much prices are rising over a given period, usually a year. It picked up sharply starting in 2022 and remained rapid in 2023. While prices are no longer climbing as quickly, those two years of rapid increase have left costs for many common purchases — from eggs to apartments and restaurant meals — notably more expensive than consumers remember them being as recently as 2019 or 2020.For months, that has weighed on consumer confidence and caused many voters to give the nation’s economic performance poor marks, even though the unemployment rate is very low and companies have been hiring.Voters regularly cited the economy as a top concern in polls headed into the election, and they often suggested that they thought Mr. Trump would do a better job in managing it. While the economic perception gap between Mr. Trump and Vice President Kamala Harris, the democratic candidate, closed somewhat over time, it never fully faded.While rapid inflation had been a global trend, Mr. Trump regularly pinned the blame for it on the Biden administration. And exit polls suggested that voters were indeed worried about the economy as they headed out to vote. Roughly three in four voters said that inflation had caused their families hardship over the past year.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    How Is the Economy for Black Voters? A Complex Question Takes Center Stage.

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    The 2024 election could be won or lost on the strength of the Black vote, which could in turn be won or lost based on the strength of the American economy. So it is no surprise that candidates are paying a lot of attention — and lip service — to which of the past two administrations did more to improve the lives of Black workers.Former President Donald J. Trump, the Republican candidate, makes big claims about the gains Black workers made under his watch, saying that he had the “lowest African American unemployment rate” and “the lowest African American poverty rate ever recorded.” But those measures improved even more under the Biden administration, with joblessness touching a record low and poverty falling even further.“Currently, Black workers are doing better than they were in 2019,” said Valerie Wilson, a labor economist whose work focuses on racial disparities at the liberal-leaning advocacy organization EPI Action.That may sound like an unambiguous victory for Vice President Kamala Harris, the Democratic nominee, especially when paired with a recent increase in homeownership rates for Black families and the fact that the Black unemployment rate dipped in September.But even with those notable wins, the economy has not been uniformly good for all Black Americans. Rapid inflation has been tough on many families, chipping away at solid wage growth. Although the labor market for Black workers was the strongest ever recorded for much of 2022 and 2023, the long shadow of big price increases may be keeping people from feeling like they are getting ahead.In fact, nearly three in four Black respondents rated the economy as fair or poor, a recent New York Times/Siena College poll of Black likely voters found. And that is notable, because Black voters do tend to prioritize economic issues — not just for themselves, but also for the overall welfare of Black people — when they are thinking about whether and how to vote.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Meet Michelle Bowman, the Fed Official Cited by JD Vance

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    Michelle Bowman, a Trump-appointed Fed official recently cited by JD Vance, has been gaining prominence.When Senator JD Vance wanted to back up the assertion he made during the vice-presidential debate that new immigrants are exacerbating America’s housing affordability crisis, he cited a Federal Reserve study. Except it wasn’t a study. It was a speech by Michelle Bowman, a Fed governor appointed by former President Donald J. Trump.Ms. Bowman’s name is likely little known outside Washington. But that may be about to change, as Ms. Bowman positions herself as a prominent conservative voice at the central bank ahead of a possible Trump presidency.Ms. Bowman, 53, was first nominated to the Fed’s seven-person Board of Governors by Mr. Trump in 2018. A former state bank commissioner of Kansas, she had previously worked in community banking and as an adviser in the Department of Homeland Security during the George W. Bush administration. She filled the governor spot on the Fed Board that is earmarked for community bankers.Unlike many Fed officials, she is not a doctoral economist with a string of coastal schools behind her name. Ms. Bowman holds a degree in advertising and journalism from the University of Kansas and a law degree from Washburn University. Given her limited macroeconomic experience, she has never been a closely watched player when it comes to the Fed’s interest rate decisions. Her speeches have long focused on nitty-gritty banking issues.But Ms. Bowman’s criticism of the Fed’s approach to bank rules over the last two years — as well as her recent and rare move to push back on the central bank’s half-point interest rate cut — has raised her public profile.In September, Ms. Bowman voted against the central bank’s decision to lower interest rates sharply. That stood out, because Fed governors hardly ever dissent on economic policy: Hers was the first “no” vote by a governor since 2005.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Trump Blames Immigrant Surge for Housing Crisis. Most Economists Disagree.

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    The former president often implies that deportations will bring down housing costs. Reality is more complicated.Former President Donald J. Trump and his running mate, Senator JD Vance, regularly blame America’s housing affordability crisis on a recent surge in immigration. They point to their plans for mass deportations of undocumented workers as part of the solution.But most economists do not believe that immigrants have been a major driver of the recent run-up in housing prices. Rents and home costs started to surge in 2020 and 2021, before the flow of newcomers began to pick up in 2022 and 2023.And while immigrants could have kept housing demand elevated in some markets, past studies suggest that they are a small part of the overall story. Even the economist whose paper Mr. Vance had cited as evidence said in an interview that she thought that immigration’s recent impact on housing costs had been minuscule.In fact, a number of economists and housing industry experts said that one of the solutions Mr. Trump was proposing — large-scale deportations — could actually backfire and make the housing crisis worse.That’s because immigrants do not simply add to the demand for housing: They are an important part of the work force that supplies it. Foreign-born workers make up a quarter of the construction labor force, and they are especially concentrated in trades like plastering, hanging drywall and roofing.Across many booming housing markets, particularly in the South, the recent flow of migrants has helped residential builders meet demand for both skilled trades and relatively unskilled laborers, industry groups say and job market data suggest.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Fed Minutes Show a Cut ‘Likely’ to Come in September

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    Even before a disappointing July jobs report, Federal Reserve officials thought they would probably cut rates at their Sept. 17-18 meeting.Federal Reserve officials held off on cutting interest rates at their July meeting, but minutes from that gathering showed that they were clearly poised to lower them at their meeting in September, just weeks before the presidential election.“The vast majority” of officials thought that “if the data continued to come in about as expected, it would likely be appropriate to ease policy at the next meeting,” according to notes from the meeting released on Wednesday.Days after the Fed’s July gathering, a disappointing employment report showed that employers hired more slowly than expected. And in the weeks since, fresh data have showed that inflation continues to cool.That leaves the Fed primed to cut rates at their next meeting on Sept. 17-18, though just how much they will lower borrowing costs is still an open question. Investors think that a quarter-point reduction is most likely, but they see a half-point cut as a possibility.While the Fed is independent of politics, that move is likely to draw attention to the central bank. A reduction would come just weeks before November’s presidential election, and at a time when the Fed’s policies — especially its effort to fight inflation and its effect on the housing market through mortgage costs — have become a common topic of conversation on the campaign trail.The Fed has held interest rates steady at 5.3 percent, the highest level in more than two decades, since July 2023. At that level, interest rates are hefty enough to discourage many families and businesses from borrowing money, which weighs on demand and helps to cool the economy, making it harder for companies to lift prices.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More