Additional Tariff Imposed on Imports of Some Semiconductors

In a proclamation issued Jan. 14 President Trump took the following actions following a Section 232 investigation that found that the present quantities and circumstances of imports of semiconductors, semiconductor manufacturing equipment, and their derivative products threaten to impair national security.

Tariff. A new 25 percent tariff is being imposed on imports from all countries of certain advanced computing chips, as detailed in this annex, effective with respect to goods entered or withdrawn from warehouse for consumption on or after 12:01 a.m. EST on Jan. 15. Goods subject to this tariff will not be subject to a range of additional tariffs also specified in the annex.

This tariff will not apply to imports of covered products for:

– use in U.S. data centers;

– repairs or replacements performed in the U.S.;

– research and development in the U.S. involving these chips;

– startups in the U.S.;

– non-data center consumer applications in the U.S.;

– use in non-data center civil industrial applications in the U.S.;

– use in U.S. public sector applications; or

– other uses determined to contribute to the strengthening of the U.S. technology supply chain or domestic manufacturing capacity for derivatives of semiconductors.  

Broader tariffs on imports of semiconductors and their derivative products, as well as an accompanying tariff offset program to incentivize domestic manufacturing, may be imposed “in the near future.”

The Department of Commerce is directed to report by July 1 on the market for semiconductors used in U.S. data centers so the president may determine whether to modify the additional tariff. The DOC will also inform the president of any circumstance that might indicate that this tariff is no longer necessary.

Agreements. The Office of the U.S. Trade Representative and the DOC will also jointly pursue or continue negotiations toward agreements to address the national security threat posed by imports of covered products. The president may consider imposing “significant tariffs” on such imports (presumably from individual countries) “depending on the status or resolution of such negotiations.”