China escalates with anti-dumping and anti-discrimination cases while Washington tightens controls
China opened two investigations into the US semiconductor sector just days before Treasury Secretary Scott Bessent meets Vice Premier He Lifeng in Madrid, underscoring how trade, technology and security are now inseparable. Beijing is moving against American-made analog chips while also challenging US restrictions on China’s chip industry, even as Washington expands its entity list to curb support for China’s military and surveillance ambitions.
What Beijing is targeting
The commerce ministry’s anti-dumping case focuses on commodity interface ICs and gate driver ICs, mature-node parts widely used across autos, appliances and industrial gear. Those segments include major US players such as Texas Instruments and Onsemi. In parallel, Beijing launched an anti-discrimination probe into US measures that have limited China’s access to advanced semiconductors and chipmaking tools. Beijing frames these steps as a response to containment, but they function as leverage ahead of talks and a warning to foreign suppliers who feed China’s vast mid-tier electronics ecosystem.
Washington’s countermoves and the stakes
The US on Friday added 23 Chinese entities to its entity list, including firms accused of procuring equipment for leading foundry SMIC, tightening a web of controls designed to prevent military diversion. Bessent and He will try to manage tensions in Madrid after prior rounds in Geneva, London and Stockholm produced rolling 90-day pauses on tariff escalations. Bessent has cast the US approach as de-risking in critical sectors like rare earths, semiconductors and medicines. That is the right frame: safeguard the backbone technologies and supply chains without giving Beijing a pass on coercive trade behavior.
The strategic picture
This is not a routine trade spat. China picked analog chips for a reason: they are the quiet workhorses of modern industry and an area where US firms dominate. By threatening that tier, Beijing pressures US companies that still sell into China while avoiding a direct fight over bleeding-edge processors that it cannot credibly access under current controls. Washington should not confuse dialogue with concession. A limited-government approach here means targeted, rules-based tools rather than sprawling subsidies: enforce export controls, tighten outbound investment screening where technology transfer risks are clear, and accelerate friend-shoring for mature-node semiconductors so China cannot weaponize dependencies.
What to watch in Madrid
Key signals will include whether tariff pauses are extended, whether there is any movement on a forced divestment path for TikTok, and how closely Europe aligns with US export controls and new Russia sanctions. Expect Beijing to dangle market access while pressing to dilute controls. The US should hold firm: prioritize national security, protect core tech, and avoid open-ended industrial policy. Measured pressure works best when paired with allied coordination and legal clarity. If China escalates with punitive duties on mature-node chips, Washington should respond with tighter enforcement and accelerated diversification, not with blanket concessions.