China Tariffs to Hit the Chip Sector |
The Trump administration on Tuesday finalized plans to implement later this month a 25% tariff on a list of Chinese products worth $16 billion annually. It will mark the second group of products to be hit with the tariff as part of the escalating trade war between the U.S. and China — an initial $34 billion worth of Chinese products have been subject to the tariff since July 6. The Semiconductor Industry Association (SIA) trade group estimates that about $6.3 billion per year worth of semiconductors and related products are in one of the two tariff tranches, with the majority of those on the list released Tuesday. Semiconductor related items on the list Tuesday include equipment used in semiconductor manufacturing, as well as diodes and other types of devices. Both the SIA and the SEMI trade group — which represents capital equipment manufacturers, EDA vendors and other types of players in the electronics supply chain — lobbied hard for the removal of semiconductors and related products from the list in both written statements and testimony at a public hearing in July. The groups argued, among other things, that imposing the tariff on chips would handicap U.S.-based semiconductor firms in relation to international competitors and threaten the market share of U.S. firms in China, as well as hurting U.S. exports and jobs while raising the cost of goods for U.S. consumers. |