US Designates China’s Chip Strategy a Threat, Unveils Delayed-Action Tariff
The US Trade Representative has formally determined China's semiconductor drive is a threat to US commerce, launching a new tariff that starts at 0% and is set to rise in 18 months, on June 23, 2027.
In a significant new trade move, the Trade Representative Office (USTR) has determined that ’s drive for semiconductor dominance is “unreasonable and discriminatory” and poses a direct threat to commerce. The agency is now implementing a novel tariff action that starts at zero but is set to rise sharply.
A Formal Finding of Unfair Practices
According to a formal Notice of Action filed with the Federal Register, the concluded that ’s state-led efforts in the chip sector are designed to distort the market and undermine American industry. This official designation provides the legal and political groundwork for subsequent punitive measures, marking a new chapter in the ongoing tech rivalry between the two global powers.
The 'Ticking Clock' Tariff
The is rolling out its response with an unusual structure. A tariff action will be applied to a wide range of semiconductors, but the agency confirmed the initial rate will be . This approach avoids immediate disruption while sending a clear signal of intent.
However, the rate is temporary. The USTR notice specifies that the rate is set to rise in , on . The future rate wasn't disclosed, suggesting it may be used as a bargaining chip in future negotiations or adjusted based on ’s response.
This delayed-action tariff is less an economic weapon and more a strategic maneuver. It serves as a formal warning shot, putting Beijing on notice while giving US and allied companies a clear, 18-month deadline to adjust supply chains. It's a tactic designed to maximize leverage and minimize immediate economic pain, effectively starting a countdown clock for negotiation or escalation.
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