US punishes China’s ‘dominance’ of legacy chips with zero percent tariffs
- Reference: 1766538140
- News link: https://www.theregister.co.uk/2025/12/24/us_china_chip_tariffs/
- Source link:
News of the plan emerged in a [1]Notice of Action [PDF] signed by Jennifer Thornton, General Counsel at the Office of the United States Trade Representative, which posted the document on Monday.
The Notice is the result of an investigation into China’s semiconductor industry that the Biden administration [2]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.”
[3]
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.”
[4]
[5]
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.
The US will increase tariffs on June 23rd, 2027, and will decide the rate of that impost no fewer than 30 days before the aforementioned date.
[6]
Also on Monday, US Trade Representative Jamieson Greer penned an [7]opinion piece arguing that tariffs are a tool that brings trading partners to the negotiating table to discuss investments that help the Trump administration pursue its goal of re-industrializing America.
The administration has therefore given Chinese chipmakers time to contemplate whether they want to open for business in the USA.
Similar negotiating tactics and incentives offered under the CHIPS Act have already seen foreign chipmakers such as TSMC and Samsung make massive investments in manufacturing on US soil, and Intel resolve to build factories at home instead of offshore.
[8]US PC shipments hit the buffers as Trump’s tariffs take their toll
[9]Transatlantic chip war fizzles as EU and US framework confirms 15% tariff cap
[10]US lowers tariffs on major tech exporting nations - but buyers will still pay more
[11]India gets its turn on the Trump tariff train: 25% levy to start Friday
In remarks made in [12]January and [13]August , President Trump suggested imported semiconductors could attract tariffs of “25, 50 or even 100 percent.”
Levies at that level are nowhere to be found in this week’s announcements. ®
Get our [14]Tech Resources
[1] https://regmedia.co.uk/2025/12/23/supplied_ustr_china_semiconductor_tariff_policy.pdf
[2] https://ustr.gov/about-us/policy-offices/press-office/press-releases/2024/december/ustr-initiates-section-301-investigation-chinas-acts-policies-and-practices-related-targeting
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/publicsector&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2aUtzckIGol_dSY776ydKbQAAARg&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/publicsector&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aUtzckIGol_dSY776ydKbQAAARg&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/publicsector&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33aUtzckIGol_dSY776ydKbQAAARg&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/publicsector&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aUtzckIGol_dSY776ydKbQAAARg&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[7] https://ustr.gov/about/policy-offices/press-office/press-releases/2025/december/op-ed-ambassador-jamieson-greer-year-tariff
[8] https://www.theregister.com/2025/10/09/us_pc_shipments_flat_trump_tarriffs/
[9] https://www.theregister.com/2025/08/21/eu_us_15_percent_tariff_cap/
[10] https://www.theregister.com/2025/08/01/recipricoal_tariff_changes/
[11] https://www.theregister.com/2025/07/30/trump_tariffs_india/
[12] https://www.theregister.com/2025/01/28/trump_tariffs_semiconductors/
[13] https://www.theregister.com/2025/08/07/us_semiconductor_tariffs_100_percent/
[14] https://whitepapers.theregister.com/
The result of an investigation into China’s semiconductor industry
Shouldn't that have been
"the result of an investigation into the USA’s semiconductor industry" and why they stopped bothering to make these mature devices[1] if they are so damn important to the USA.
> sweeping non-market policies and practices
I.e. being better at it than the USA, who fetishised "new and shiny, with bigger markups" and "you MUST grow and grow and grow, we will sue you for not maximising fiduciary responsibility if you even *try* to just keep making these old-fashioned parts at rates that let you break-even, pay a consistent but smaller dividend and tie up any excess in planning to keep running in ten years time".
[1] I utterly refuse to condone the idiotic usage of "legacy" in this fashion; if enough of us just laugh in the face of marketers and salesdroids when they try it, maybe we can get them to stop.
Re: The result of an investigation into China’s semiconductor industry
These are low margin products. Making a profit on them requires environmental features that provide a competitive advantage. A good place to start is a large hungry workforce so desperate for employment that they will work 5 till 9 six days per week for a pittance with no access to health care. Eliminating health and safety at work and regulations against pollution also help. The US government is working tirelessly towards creating a suitable environment for low margin manufacturing. The only bit they have wrong is border control: they should be blocking the exits rather than preventing immigration.
Re: The result of an investigation into China’s semiconductor industry
"A good place to start is a large hungry workforce so desperate for employment that they will work 5 till 9 six days per week for a pittance with no access to health care."
The USA has had that for a long time, along with "pay rates so pathetic that even a full-time worker needs food stamps to survive" - so where's the problem?
Re: The result of an investigation into China’s semiconductor industry
There's several things going on. One is that the main market for these older chips is in low cost electronic goods, of which China is the biggest manufacturer. The chip plants are located where their customers are. There's a huge market for this stuff because it's cheap and good enough.
The other thing is that US has spent a great deal of effort in preventing Western companies from selling the latest chip making equipment to Chinese companies, only allowing stuff for making older generation chips of the type we are talking about here. So, Chinese chip companies had little choice except to stick to making lower end chips based on older chip technology. Washington patted themselves on the back of this brilliant success.
Then the US observed that Chinese companies were making lots of older generation chips. The American government studied this carefully and decided that this focus on older generation chip technology instead of buying the latest Western equipment was due to some deeply laid plan which the Chinese government have cooked up.
I'm sure this US strategy makes sense to someone.
Why not really hit them ?
Negative tariffs, -100% , that will make them pay !
That'll tell 'em! That'll make 'em sit up and take notice!
I wonder if the Chinese leadership sits around laughing till snot runs of their noses, just like they surely must be in the Kremlin.
I mean, this is like playing the moron in Axis & Allies who plays the Soviet Union and has all their factories pump out submarines.
... OK, I did that only ONCE, alright? I was trying to test a strategy. Purely experimental!