China has reportedly lifted its 125% retaliatory tariffs on specific semiconductor imports from the United States, according to a report by the Chinese business magazine Caijing.

The exemptions apply to at least eight integrated circuit (IC)-related tariff codes, though memory chips remain subject to tariffs.

The report indicates that China’s customs authorities have informed domestic companies that duties paid on these exempted semiconductor imports between April 10 and April 24 are eligible for refunds.

However, no public announcement has been made by China’s customs administration.

🔗 Source: South China Morning Post

🧠 Food for thought

1️⃣ The tariff exemptions reflect practical recognition of semiconductor interdependency

China’s decision to waive tariffs on certain semiconductor imports demonstrates the unavoidable reality of global tech interdependence despite geopolitical tensions.

China imported $350 billion worth of semiconductors in 2020, more than its oil imports, highlighting its critical dependency on foreign chips despite years of self-sufficiency efforts 1.

The waiver acknowledges the complex ecosystem required for advanced chip production, where no single country controls all necessary components, talent, and technology 2.

With Taiwan’s TSMC producing 92% of the world’s most advanced chips (5nm and below) in 2021, and the U.S. controlling 85% of electronic design automation tools, both superpowers face practical limits to decoupling 1.

This move suggests a pragmatic approach to balancing national security concerns against the economic necessity of maintaining semiconductor supply chains in a highly interdependent industry.

2️⃣ Semiconductor trade shifts reflect broader market volatility and uncertainty

China’s selective exemption of certain semiconductor tariffs comes amid significant market volatility and mixed signals in the global chip industry.

The semiconductor industry is experiencing sharp swings, with stocks rallying on hopes of reduced trade tensions. Nvidia shares rose over 5%, Broadcom increased by 6%, and AMD gained 7% after comments about potentially reducing tariffs 3.

ASML, a critical supplier for chipmaking equipment, recently missed expected bookings targets ($4.47 billion vs. projected $4.89 billion), with its CEO specifically citing “tariff uncertainties” as clouding otherwise strong demand 4.