China has started a dispute with the United States at the World Trade Organization in an effort to challenge the Biden administration’s semiconductor export limits meant to restrict Chinese development of high-tech military weaponry.
The dispute relates to restrictions issued by the Commerce Department in October that limited China’s ability to acquire high-grade semiconductor chips and is the first step in a yearslong legal process for China to challenge the controls.
“China takes legal actions within the WTO framework as a necessary way to address our concerns and to defend our legitimate interests,” China’s Ministry of Commerce said in a statement, according to Reuters. The ministry alleged that the export controls “threatened the stability of the global industrial supply chains.”
U.S. officials said that the restrictions were not a trade matter subject to WTO rules. “We have received a request for consultations from the [People’s Republic of China] related to certain U.S. actions affecting semiconductors,” a spokesperson for the U.S. Trade Representative noted. “As we have already communicated to the PRC, these targeted actions relate to national security, and the WTO is not the appropriate forum to discuss issues related to national security.”
Trade disputes in the WTO can take several years to resolve, but China has taken the first step toward the process, known as a request for consultations. The newly filed dispute arrives days after China won a separate suit regarding metal tariffs.
The Commerce Department passed rules in October that would limit China’s ability to get more advanced semiconductors from U.S. developers. It also added 31 Chinese tech companies to its “unverified list,” which will limit their ability to acquire certain tech-related items from U.S. vendors.
The rules also arrived months after Biden passed the CHIPS Act, a bill that provided tens of billions of dollars to developers and factories to expand U.S. ability to produce semiconductors.