U.S.-China Trade War Heats Up
The U.S. Trade Representative (USTR) yesterday released a 25 percent tariff on $16 billion in imports from China, including 29 tariff lines that represent the heart of the semiconductor industry. These tariff lines include semiconductor products such as machines and spare parts used to make, wafers, flat panel displays, masks and chips, and will cost SEMI’s 400 U.S. members an estimated more than $500 million annually in additional duties.
SEMI, along with hundreds of companies, including Lam Research and KLA-Tencor, submitted written comments, requesting the removal of tariff lines from the proposed list. SEMI also testified on behalf of the semiconductor industry, joining more than 80 other companies, including Applied Materials, in opposing the duties before an U.S. government interagency panel in late July.
This trade action is on top of the already imposed $34 billion U.S. tariff list, which will cost SEMI’s U.S. members tens of millions of dollars annually. In the coming days, USTR will publish details on how U.S. companies can request the exclusion of products from the $16 billion tariff list, much as it did for the first round of $34 billion.
In a swift retaliation, China announced a 25 percent tariff on $16 billion in U.S. exports, including products vital to semiconductor manufacturing such as chemicals, test equipment and other parts. Both U.S. and China tariffs will take effect on August 23.
The new tariffs come as China considers tariffs on $60 billion of U.S. imports, and the U.S. weighs additional duties on $200 billion of Chinese imports – a wave that would inflict even deeper damage on the U.S. semiconductor industry. This latest round of U.S. tariffs would cover goods used in microelectronics manufacturing, including chemicals, glass products and spare parts. SEMI will testify against the $200 billion tariff list later this month. If your company expects to be impacted by the proposed tariffs on $200 billion worth of goods, please contact SEMI staff.
SEMI stands firm in its belief that none of the tariffs address U.S. concerns over China’s trade practices. Instead, they harm companies in the semiconductor supply chain by increasing business costs, introducing uncertainty and stifling innovation. SEMI will continue to engage with policymakers as both the U.S. and China $16 billion tariff lists are implemented. We will also be evaluating the products covered by the $200 billion U.S. list and the $60 billion Chinese list as both are further considered. We encourage members to review these lists to determine impact on their companies. For more information, please contact Jay Chittooran, Public Policy Manager at SEMI, at firstname.lastname@example.org.