US Defers China Chip Tariffs Till Mid-2027 As Trade Truce Takes Shape

The United States plans to press punitive tariffs on Chinese semiconductor imports, but has deferred the action till at least mid-2027.

Washington's announcement of the future tariffs comes as it perceives Beijing's pursuit of the chip industry dominance as "unreasonable". At the same time, its deference of the same is an attempt to ease trade tensions with China, the biggest supplier of rare earth minerals.

The announcement follows a year-long investigation into China's chip imports into the United States, launched by Joe Biden's administration.

Even as no import duties were announced for now, the US Trade Representative has kept doors open for such punitive actions in the future. The tariffs will remain zero for 18 months till June 2027, and subsequently duties would be imposed. This tariff rate will be announced "not fewer than 30 days prior to that date", USTR wrote in a Federal Register notice. 

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

The reprieve till mid-2027 comes after the Trump administration, in October, stayed a rule that restricted US tech exports to units of already-blacklisted Chinese companies as part of the negotiations to dial down tensions.

Also, Washington launched a review this month that could potentially result in China receiving the first shipments of Nvidia's "second-most powerful" H200 AI AI chips.