US includes semiconductors in sweeping China tariff increases

Business news | May 14, 2024

By Peter Clarke

Semiconductors

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The US government unveiled a broad set of tariffs on Chinese goods Tuesday (May 14), including doubling the tariff on semiconductor imports to 50 percent.

The long-awaited announcement follows on from a two-year review of China trade and will touch a broad array of sectors. As expected electric vehicles are a key item in the list with duties on EVs set to quadruple in 2024 from 25 percent to 100 percent (see US looks to 100 percent China electric vehicle tariffs). The semiconductor tariff increase is delayed until 2025.

These steps are part of a set of tariff hikes targeting $18 billion worth of annual Chinese imports, including strategic sectors such as batteries, steel, and critical minerals. The White House has stated that these measures are in response to what it calls “unfair trade practices” by Beijing.

“After thorough review of the statutory report on Section 301 tariffs, and having considered my advice, President Biden is directing me to take further action to encourage the elimination of the People’s Republic of China’s unfair technology transfer-related policies and practices that continue to burden U.S. commerce and harm American workers and businesses,” said Ambassador Katherine Tai, in a statement.

US tariffs on China imports by category. Source: United States Trade Representative.

Ahead of the expected announcement PRC Foreign Ministry spokesman Lin Jian said: “Section 301 tariffs imposed by the former US administration on China have severely disrupted normal trade and economic exchanges between China and the US. The WTO has already ruled those tariffs [as being] against WTO rules.” Lin also said: “We urge the US to follow WTO rules, lift all additional tariffs on China and not to impose new ones. China will take all necessary measures to defend its rights and interests.”