US Imposes New Tariffs on Chinese Chips, Major Rate Hike Set for 2027

The Office of the United States Trade Representative (USTR) has concluded that China's aggressive push into the semiconductor industry qualifies as actionable conduct under Section 301 of the Trade Act of 1974. Following its investigation, the agency announced plans to impose new tariff measures on certain semiconductor imports from China, effective immediately.



Under the decision, the initial tariff rate will be set at 0 percent starting December 23, 2025. That rate, however, is temporary. The USTR has ordered that duties increase after an 18-month period, with the higher rate taking effect on June 23, 2027. While the final tariff level has not yet been disclosed, the agency said it will provide at least 30 days' notice before the increase goes into effect. The measures apply to a defined group of products, including silicon, diodes, transistors, and electronic integrated circuits, and stack on top of existing 50 percent Section 301 tariffs tied to forced technology transfer practices.


The investigation found that China has relied on what the USTR describes as "unreasonable" non-market tactics, including extensive state subsidies, coerced technology transfers, and opaque regulatory preferences, to accelerate its semiconductor ambitions. The filing points to China's stated objective of capturing 56 percent of the global semiconductor market, warning that such concentration would crowd out foreign competitors and deepen strategic dependencies for the United States. The agency also cited China's prior use of supply chain leverage, including recent export restrictions on key materials like gallium.

The ruling adds another layer of uncertainty for global technology companies with complex supply chains. Apple, for example, sources its most advanced A-series and M-series chips from TSMC, a relationship that has recently been strengthened as key suppliers expand operations in Arizona. At the same time, the broader semiconductor ecosystem remains exposed to shifting trade policies. To reduce that exposure, Apple has been working to diversify its manufacturing footprint, with reports indicating discussions to assemble iPhone chips in India.

The USTR's action fits into a wider effort by the U.S. government to push back against what it sees as unfair competitive practices in critical technology sectors. It follows a warning issued just last week that the United States could pursue retaliatory measures against the European Union over regulations affecting American technology firms.

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