Silicon wafers with etched chips are seen as U.S. Vice President Kamala Harris tours a site where Applied Materials plans to build a research facility in Sunnyvale, California, on May 22, 2023.
Pool | Reuters
The Trump administration said in a Federal Register filing on Tuesday that the United States plans to increase tariffs on semiconductor imports from China in June 2027, with rates to be determined at least a month in advance.
But in the meantime, initial tariffs on semiconductor imports from China will be zero for 18 months, according to a filing from the Office of the U.S. Trade Representative.
As part of an investigation that began a year ago, authorities found that China engaged in unfair trade practices in the industry.
“China has been pursuing dominance in the semiconductor industry for decades and has adopted increasingly aggressive and extensive non-market policies and practices in pursuit of dominance in this sector,” the agency said in a filing.
The decision to postpone new tariffs for at least 18 months signals the Trump administration’s efforts to defuse trade hostilities between the United States and China.
If future negotiations break down, additional tariffs may become a bargaining chip.
U.S. President Donald Trump and Chinese President Xi Jinping reached a truce in their so-called trade war in October as part of a deal that included the U.S. lowering some tariffs and allowing China to export rare earth metals.
USTR’s Tuesday filing states that the tariffs will increase on June 23, 2027.
The notification is the next step in a process under Section 301 of the Trade Act that began during the Biden administration to focus on older chips.
The new 2027 date provides clarity for U.S. companies that said they are closely monitoring how U.S. tariffs could affect their businesses and supply chains.
These tariffs are in addition to other tariffs the Trump administration has threatened on Chinese chip imports under Section 232 of the Act.
