Chip Photo: VCG

President Donald Trump's administration on Tuesday claimed it will slap tariffs on Chinese semiconductor imports over Beijing's so-called "unreasonable" pursuit of chip industry dominance, but would delay the action until June 2027, Reuters reported Wednesday.

A Chinese expert said the June 2027 timeline suggests there may still be room for dialogue, warning that if the tariffs are ultimately imposed, such moves would amount to weaponizing trade in ways that run counter to WTO rules, potentially harming the US's own high-tech sector and disrupting global semiconductor supply chains.

The initial tariff level will remain zero for 18 months, increasing on June 23, 2027 "to a rate to be announced not fewer than 30 days prior to that date," Office of the United States Trade Representative (USTR) wrote in a Federal Register notice, Bloomberg reported.

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" chips to the US, launched by former president Joe Biden's administration, Reuters reported.

Zhou Mi, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times that the US plans to impose tariffs mainly target mature-node chips, a segment that has seen some of the fastest growth in China in recent years. Through tariff measures, the US aims both to ease competitive pressure on its domestic firms in the mature-chip market and to reduce reliance on Chinese chip supplies.

In December 2024, as Biden was nearing the end of his term, the USTR launched a Section 301 investigation into China's mature-node chip industry to assess its impact on the US economy. The 301 investigation initially focused on China's manufacturing of foundational semiconductors, also known as legacy or mature-node chips, including their use in downstream products across critical industries such as defense, automotive, medical devices, aerospace, telecommunications, and power and electrical grids, according to the USTR official website.

The new 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, according to Reuters.

However, the Trump administration has recently sent relatively restrained signals to avoid further escalating China-US trade tensions amid the current international and domestic environment, Zhou said. Against the backdrop of earlier consultations, Washington also appears intent on maintaining a relatively stable trade atmosphere so as not to disrupt potential high-level interactions and communication, he said.

The potential implementation date was set for June 2027 mainly because such investigations require lengthy processes for initiation, assessment and decision-making, Zhou analyzed, noting that as for policy directions further down the line, there could be variables along the way, leaving room for communication.

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. 

Meanwhile, the chip industry is awaiting the administration's decision on a much broader tariff investigation into global chip imports, according to the report.

Zhou stressed that the semiconductor industry is highly globalized, and tariff measures alone are unlikely to reshape the industrial landscape. If the US ultimately moves forward, politicizing economic and trade issues could disrupt market mechanisms, drive up costs across the board, and even backfire on its own high-tech sector, while triggering ripple effects across multiple industries, including artificial intelligence, and other countries, he said.

Previously, China has responded with strong dissatisfaction and firm opposition after the USTR announced on December 23 US time the launch of a Section 301 investigation into China's chip industry-related policies.

MOFCOM's spokesperson on December 23, 2024 said in a statement that China is strongly dissatisfied with and firmly opposes this, noting that the US' Section 301 investigations carry obvious unilateral and protectionist tendencies. 

The previous Section 301 tariffs have been ruled to violate WTO rules and were opposed by many WTO members, and China has lodged stern representations with the US multiple times, the spokesperson said.  

The US has initiated a new Section 301 investigation into China's chip industry policies, aiming to suppress China and for domestic political reasons. This will disrupt and distort the global semiconductor industry and supply chains and will also harm the interests of American businesses and consumers. It is repeating mistakes, the spokesperson said.