"The Notice is the result of an investigation into China's semiconductor industry that the Biden administration commenced in December 2024, and which focused on "foundational semiconductors (also known as legacy or mature node semiconductors), including to the extent that they are incorporated as components into downstream products for critical industries like defense, automotive, medical devices, aerospace, telecommunications, and power generation and the electrical grid.""
"The investigation found,"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." Those practices, the document concludes, "severely disadvantaged U.S. companies, workers, and the U.S. economy generally." The Notice therefore concludes that tariffs on Chinese chips are appropriate, but not urgent because the document sets them at zero percent until mid-2027."
A USTR Notice establishes tariffs on semiconductors imported from China to take effect in mid-2027, with the tariff rate to be decided at least 30 days before June 23, 2027. The action follows a December 2024 investigation focused on foundational (legacy/mature node) semiconductors and their use in critical industries such as defense, automotive, medical devices, aerospace, telecommunications, and power generation. The investigation concluded that China pursued industry dominance through aggressive non-market policies that disadvantaged U.S. companies and workers. Tariffs are initially set at zero percent until mid-2027, providing time for negotiations and investment decisions tied to onshoring incentives under the CHIPS Act.
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