US delays slapping tariffs on China chips until 2027

[WASHINGTON] President Donald Trump’s administration said it will slap tariffs on Chinese semiconductor imports over Beijing’s “unreasonable” pursuit of chip industry dominance, but would delay the action until June 2027.

The tariff rate will be announced at least 30 days in advance, according to the filing, which follows a year-long “Section 301” unfair trade practices investigation into China’s exports of “legacy” or older-technology chips to the US, launched by former president Joe Biden’s administration.

“China’s targeting of the semiconductor industry for dominance is unreasonable and burdens or restricts US commerce and thus is actionable,” the US Trade Representative said in its release.

The Chinese Embassy in Washington expressed opposition to any tariffs. “To politicise, instrumentalise and weaponise trade and tech issues and destabilise the global industrial and supply chains will benefit no one and will eventually backfire,” it said in a statement to Reuters. “We will take all measures necessary to firmly safeguard our lawful rights and interests,” it added.

The move, which preserves Trump’s ability to impose the duties, seeks to dial down tensions with Beijing in the face of Chinese export curbs on the rare earth metals that global tech companies rely on and which China controls.

As part of negotiations with China to delay those curbs, Washington pushed back a rule to restrict US tech exports to units of already-blacklisted Chinese companies. It has also launched a review that could result in the first shipments to China of Nvidia’s second-most powerful AI chips, Reuters reported, despite grave concerns from China hawks in the US who fear the chips could supercharge China’s military.

SEE ALSO

US bars approvals of new models of DJI, all other foreign drones

Global investors turn to Chinese AI as Wall Street fears bubble

The chip industry is awaiting the administration’s decision on a much broader tariff investigation into global chip imports.

That probe, under the “Section 232” national security statute, could heap more tariffs on Chinese semiconductors and a vast array of electronics devices containing them from all countries. But US officials are privately saying that they might not levy them anytime soon, Reuters has reported.

Biden already imposed an additional 50 per cent tariff on Chinese semiconductors that started on Jan 1, 2025. REUTERS