The US Trade Representative has concluded its Section 301 investigation into China’s semiconductor policies, finding them actionable under U.S. trade law and announcing phased tariffs on Chinese semiconductors starting in December 2025, with higher rates to follow from 2027.
The Office of the United States Trade Representative (US Trade Representative) has issued a Notice of Action titled “China’s Acts, Policies, and Practices Related to the Targeting of the Semiconductor Industry for Dominance,” which was published in the Federal Register on 29 December 2025.
The notice confirms that China’s acts, policies, and practices are actionable under Section 301 of the Trade Act of 1974. It further states that appropriate remedial action includes imposing tariffs on semiconductors originating from China, beginning with an initial rate of 0%, which will increase after 18 months on 23 June 2027, to a rate to be announced at least 30 days in advance.
The new tariffs took effect on 23 December 2025.
On 23 December 2024, the US Trade Representative initiated a section 301 investigation of China’s acts, policies, and practices related to targeting of the semiconductor industry for dominance, including to the extent that China’s semiconductors 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 US Trade Representative also requested consultations with the Government of China pursuant to Section 303 of the Trade Act (19 U.S.C. 2413). The Government of China declined to hold consultations regarding the investigation under this statutory framework. The notice of initiation solicited written comments on, inter alia:
- China’s acts, policies, and practices related to its targeting of the semiconductor industry for dominance.
- Anticompetitive and non-market means employed by the PRC in pursuit of its semiconductor industry targeting objectives, including political guidance, directives, and control within state and private enterprises, activities of state-owned or state-controlled enterprises, market access restrictions, opaque regulatory preferences and discrimination, wage-suppressing labor practices, massive state support of industry (including government guidance funds), and forced technology transfer (including state-directed cyber intrusions and cybertheft of intellectual property).
- Whether China’s acts, policies, and practices are unreasonable or discriminatory.
- Whether China’s acts, policies, and practices burden or restrict US commerce, and if so, the nature and level of the burden or restriction. This would include economic assessments of the burden or restriction on semiconductors, semiconductor manufacturing, including foundries, silicon carbide substrates or other wafers, and downstream products, with a particular focus on critical industries, such as defence, automotive, medical devices, aerospace, telecommunications, and power generation and the electrical grid.
- Whether China’s acts, policies, and practices are actionable under section 301(b) of the Trade Act, and what action, if any, should be taken, including tariff and non-tariff actions.
