TAIPEI (Taiwan News) — US Trade Representative Katherine Tai announced Monday the US will investigate China’s practices and policies for semiconductor industry dominance.

Tai in a press release said the investigation underscores the Biden administration’s commitment to American workers and support for US semiconductor investment. The trade office said it will focus on China’s semiconductor manufacturing and downstream industries including defense, automotive, and telecommunications.

The trade office added the investigation will examine whether China’s silicon carbide substrate production discriminates or burdens US commerce.

The investigation will be conducted under Section 301 of the Trade Act of 1974. This rule allows US authorities to investigate trade partners and take legal action against them.

Taiwan Institute of Economic Research researcher Liu Pei-chen (劉佩真) said increased US regulations on China’s advanced semiconductor processes have led Chinese companies to shift towards third-generation semiconductors or mature processes, per CNA.

Liu said China might significantly increase its mature process capacity. The US is responding with tariffs to prevent a large influx of these products into its market, she added.