US launches tariff action on Chinese chips, flags economic threat

In a decisive trade move against China’s semiconductor industry, the US Trade Representative Office said it had determined that Beijing’s drive for dominance in the sector is “unreasonable and discriminatory” and poses a direct threat to US commerce.

In a formal Notice of Action filed with the Federal Register, the agency said the US is implementing a tariff action on a wide range of Chinese semiconductors, with an initial rate of 0 per cent. The rate is set to rise in 18 months, on June 23, 2027, to a higher level that will be announced 30 days before the deadline.

The investigation, launched on December 23, 2024, concluded that China has employed “sweeping non-market policies” to capture global market share and displace foreign competitors. The USTR said China’s industrial plans target “every major segment of the semiconductor supply chain,” including fabrication, design, assembly, testing and packaging.

“China’s pursuit of its dominance goals has severely disadvantaged US companies, workers, and the US economy generally,” the notice said, citing lost sales, reduced competition, and the creation of dangerous economic dependencies.

More to follow…

South China Morning Post