U.S. trade officials have determined that China should be punished for employing unfair tactics to dominate the semiconductor industry, but will wait 18 months to impose tariffs, authorities said on Tuesday.
A U.S. Trade Representative (USTR) investigation concluded China's targeting of semiconductors "for dominance is unreasonable and burdens or restricts U.S. commerce and thus is actionable," the agency said in a public notice.
The current tariff level of zero will be increased "in 18 months on June 23, 2027 to a rate to be announced not fewer than 30 days prior to that date," USTR said.
Beijing said Wednesday it "firmly opposes" the move and accused Washington of abusing tariffs to "unreasonably suppress Chinese industries."
This "disrupts the stability of the global supply chain, hinders the development of all countries' semiconductor industries and harms others while hurting itself," Chinese Foreign Ministry spokesperson Lin Jian.
"We urge the United States to quickly correct its erroneous practices," Lin said at a regular press briefing.
The Chinese Embassy in Washington also expressed opposition to any tariffs.
"To politicize, instrumentalize and weaponize trade and tech issues and destabilize the global industrial and supply chains will benefit no one and will eventually backfire," it said in a statement to Reuters.
"We will take all measures necessary to firmly safeguard our lawful rights and interests," it added.
The move, which preserves U.S. President Donald Trump's ability to impose the duties, seeks to dial down tensions with Beijing in the face of Chinese export curbs on the rare earth metals that global tech companies rely on and which China controls.
As part of negotiations with China to delay those curbs, Washington pushed back a rule to restrict U.S. tech exports to units of already-blacklisted Chinese companies. It has also launched a review that could result in the first shipments to China of Nvidia's second-most powerful AI chips, Reuters reported, despite grave concerns from China hawks in the U.S. who fear the chips could supercharge China's military.
The chip industry is awaiting the administration's decision on a much broader tariff investigation into global chip imports.
USTR officials launched the probe in December 2024 in the final weeks of Joe Biden's presidency, extending the initiative when Trump took office in January.
Trump has been a prolific purveyor of tariffs, unveiling sector-specific levies on steel, automobiles and other items as well as broader measures to achieve a variety of policy objectives.
The White House has jousted with Beijing but reached a broad truce with China after a major escalation in the spring.
The USTR's "Section 301" probe concluded that China had employed "increasingly aggressive and sweeping non-market policies" to dominate semiconductors that have included "massive and persistent" state support of private actors and "wage-suppressing labor practices."