US to Impose Unknown Tariffs in June 2027 on Chinese Chips
The Office of the U.S. Trade Representative said that while China has been burdening U.S. commerce with its non-market practices to develop its semiconductor industry, it won't be hiking Section 301 tariffs on Chinese chips until June 2027.
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The delayed action -- which covers 16 8-digit codes in Chapter 84 of the Harmonized Tariff Schedule, as well as silicon under HTS 2804.61.00 and chemicals used to make chips under HTS 3818.00.00 -- was authorized by a Section 301 investigation on Chinese chipmaking that began Dec. 23, 2024.
The silicon and chemical HTS codes are already tariffed at 50% under the Section 301 changes implemented in December 2024; a 50% Section 301 rate also currently applies to all the chips.
USTR said whatever additional rate is decided will be announced at least 30 days ahead of the June 23, 2027, deadline, and will be on top of the current 50%.
Wendy Cutler, senior vice president at the Asia Society Policy Institute, said in response to e-mailed questions: "The decision by USTR to postpone until 2027 the imposition of tariff hikes on semiconductors should be welcome news in Beijing and not lead to any countermeasures. As both sides work hard to keep their trade truce in place, they will continue to avoid taking measures that the other could view as escalatory. "
The notice said the action is warranted because "for decades, China has targeted the semiconductor industry for dominance and has employed increasingly aggressive and sweeping non-market policies and practices in pursuing dominance of the sector. China’s pursuit of its dominance goals has severely disadvantaged U.S. companies, workers, and the U.S. economy generally through lessened competition and commercial opportunities and through the creation of economic security risks from dependencies and vulnerabilities."
USTR added that China has been willing to weaponize those dependencies.
"China directs non-market advantages to China’s semiconductor industry across every major segment of the semiconductor supply chain, including fabrication, design, ATP, materials, critical minerals, chemicals, photoresists, and manufacturing equipment," the investigation found.
The Chinese government declined to hold consultations on the issues. "The U.S. Trade Representative will continue to monitor the efficacy of this action, the progress made toward resolution of this matter, and the need for any additional action," the notice said.