As a trade war looms between the two superpowers, China has put forward a proposal to reduce the surplus by offering to purchase more semiconductors from the United States. Multiple reports have been published today suggesting that China has quietly put forward a proposal to the United States in the ongoing trade negotiations to purchase more semiconductor chips from American manufacturers.
China will reportedly increase the percentage of computer chips that it purchases from the United States at the cost of purchases from South Korea and Taiwan, provided that China and the United States can come to an agreement which moves their trade relationship forward.
What China has essentially proposed is that it would reduce the number of chips it buys from South Korean and Taiwanese companies so that it can give those orders to American companies. The step would be aimed at reducing the trade deficit between China and the United States which hit an all-time high last year of $375 billion.
The proposal isn’t without merit when you consider the fact that China is the world’s largest consumer of semiconductor chips. Diverting another chunk of its chip sourcing to the United States could have a major impact on the deficit and the industry at large.
The U.S. hasn’t responded to this proposal as yet, at least not publicly, so it might be a while before the public comes to know about whether or not this proposal helped in calming the tensions between the two countries.