On December 23, 2024 the United States Trade Representative announced a Section 301 investigation into China's acts, policies and practices related to the semiconductor industry. There are currently no tariffs in place specific to the semiconductor industry.
According to USTR, evidence indicates that China “apparently seeks to dominate domestic and global markets in the semiconductor industry and undertakes extensive anticompetitive and non-market means, including setting and pursuing market share targets, to achieve indigenization and self-sufficiency.” There is also evidence that this approach “is leading to significant capacity expansion, artificially and unsustainably lower domestic and global prices, a protected domestic market, and emerging overconcentration of production capacity” in China.
USTR states that its Section 301 investigation will initially focus on China’s manufacturing of foundational semiconductors (also known as legacy or mature node semiconductors, which are used in many consumer goods), including to the extent that they are incorporated as components into downstream products for critical industries like defense, automotive, medical devices, aerospace, telecommunications, and power generation and the electrical grid. The investigation will also initially assess whether the impact of China’s acts, policies, and practices on the production of silicon carbide substrates (or other wafers used as inputs into semiconductor fabrication) contributes to any unreasonableness or discrimination or burden or restriction on U.S. commerce.
USTR accepted written comments on these issues between Jan. 6 and Feb. 5, 2025 and held a public hearing March 11-12. A final determination, and a decision on what action to take if the determination is affirmative, may not be made until late 2025.
Official Documents