The U.S. on September 1 will levy a 10 percent tariff on $300 billion (List 4) worth of Chinese goods that until now were exempt from duties, President Trump said today. The trade action makes good on the U.S. president’s commitment to impose the new round tariffs in response to China’s failure to deliver on promises to buy more U.S. farm goods and to stop the flow of the painkiller fentanyl into the U.S. The 25 percent tariffs already in effect on $250 billion in goods will remain in place.
The new list includes items used in the electronics industry but also encompasses retail products spanning the U.S. economy including clothing, toys and cell phones, exacting a more direct hit to U.S. consumers. A meeting between China and U.S. trade officials in Shanghai this week apparently did little to ease trade tensions. Both sides plan to meet again in September, though expectations for meaningful progress toward resolving their trade differences then are low.
The U.S. believes China backtracked from commitments to changing its practices related to forced technology transfer and intellectual property theft. China denies making the pledges and insists on the removal of all tariffs as part of a settlement.
The U.S. actions risk backlash from China including non-tariff barriers to trade such as licensing delays, more stringent business-related inspections, and an accelerated rollout of its unreliable entities list, China’s response to the U.S. decision to blacklist telecommunications giant Huawei. The list includes foreign companies, other organizations and individuals that China sees as national security threats or risks to China’s economy.
SEMI will continue to urge both nations to reach an agreement consistent with its 10 Principles for the Global Semiconductor Supply Chain in Modern Trade Agreements. The principles encourage free and fair trade, open markets, and respect of IP among all players in the global electronics manufacturing supply chain.
SEMI member companies impacted by the new U.S. tariffs or facing any new non-tariff barriers in China should contact Jay Chittooran, public policy manager in SEMI’s Global Advocacy Office, at chittooran@semi.org.
Mike Russo is vice president of Global Industry Advocacy at SEMI.