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The Trump administration has accused China of using unfair trade practices to try and dominate the global chip industry, but said it will not increase tariffs on Chinese imports until mid-2027.
In an online filing, the US trade representative’s office set out the conclusions of a year-long investigation into Beijing’s control of the semiconductor industry that was started under the Biden administration.
The filing argued that China could “weaponise dependencies” and use its control of the global chip industry to economically coerce other countries. Its efforts to dominate the industry were based on practices that “run counter to fair competition and market-oriented principles”, the USTR added.
But the report said the Trump administration would not increase levies on Chinese chips until at least 2027.
The result of the probe comes ahead of a meeting between US President Donald Trump and Chinese leader Xi Jinping expected in Beijing in the coming months, and caps a tumultuous year in which a US-China trade war has at times roiled global stock markets and cast a shadow over the US economy.
It also lands in the midst of an uneasy trade truce between the world’s two largest economies after both ratcheted up tariffs to as high as 145 per cent earlier this year, severely disrupting trade before agreeing to de-escalate the levies. Beijing also cut off supplies of crucial rare earth minerals, which are needed for goods ranging from cars to fighter jets.
Following a meeting between Trump and Xi in South Korea in October, Beijing and Washington both agreed to relax export restrictions on technology and critical minerals.
In the filing made available on Tuesday, the US said Beijing was using its advantages as a “non-market” economy to direct China’s chip industry “across every major segment of the semiconductor supply chain”.
“These non-market advantages include massive and persistent state financial support of industry, including market access restrictions and direction; government guidance funds; forced technology transfer and intellectual property theft; opaque regulatory preferences and discrimination; and wage-suppressing labour practices,” USTR officials wrote.
While the US will hold off on an imminent imposition of levies, it said it could increase them from June 23, 2027, to a rate to be decided 30 days before that date.
The Trump administration has a broader national security probe into the chip industry that could lead to further tariffs being imposed. However, it has so far declined to publish the results of the investigation or impose any duties.
Trump has separately threatened to hit imports of chips with tariffs of up to 100 per cent, but has suggested that companies that invest in manufacturing in the US could be spared.
