The Trump administration accused China of gaming the global semiconductor industry with unfair trade practices but said it will not hike tariffs on Chinese imports until at least mid-2027. In an online filing, the US trade representative’s office laid out the findings of a year-long probe into Beijing’s grip on semiconductors, an investigation kicked off under the Biden administration.
The filing warned that China could “weaponise dependencies” and use its position in the chip supply chain to bully other countries economically. It added that Beijing’s push for dominance relied on practices that “run counter to fair competition and market-oriented principles”.
Despite the tough language, the report said the Trump administration would hold off on new levies on Chinese chips until 2027.
Beijing was unimpressed and hit back swiftly. China foreign ministry spokesperson Lin Jian accused Washington of abusing tariffs and deliberately suppressing Chinese industries.
China foreign ministry spokesperson Lin Jian said the US approach was disrupting global supply chains and damaging its own economy.
“If the US insists on going its own way, China will resolutely take corresponding measures to safeguard its legitimate rights and interests,” Lin said.
The report lands ahead of an expected meeting between US President Donald Trump and Chinese leader Xi Jinping in Beijing in the coming months. It caps a turbulent year in which the US-China trade war has rattled global stock markets and weighed on the US economy.
The findings arrive amid an uneasy trade truce between the world’s two largest economies, after both sides imposed tariffs as high as 145 per cent earlier this year. Those levies badly disrupted trade before both governments agreed to cool things down.
Beijing squeezed Washington by cutting off supplies of key rare earth minerals used in everything from cars to fighter jets.
After a meeting between Trump and Xi in South Korea in October, both sides agreed to ease export restrictions on technology and critical minerals.
In the filing released on Tuesday, the US accused Beijing of exploiting its status as a “non-market economy to defeat capitalism by steering 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 tariffs are on hold for now, Washington said it could raise them from 23 June 2027, with the final rate set 30 days beforehand.
The Trump administration is running a broader national security probe into the chip sector that could still trigger further tariffs. So far, it has declined to publish the results or impose new duties.
Trump has separately threatened tariffs of up to 100 per cent on chip imports, while hinting that companies building factories in the US might get a free pass.