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Trump administration may delay chip tariffs, officials say
The US administration may delay imposing new tariffs on semiconductor imports, a move previously promised by President Donald Trump, according to sources with knowledge of recent discussions.
Officials have privately indicated to industry and government stakeholders that the rollout of these tariffs could be postponed, as the administration weighs the potential impact on trade relations with China.
Sources said the cautious approach is aimed at avoiding a renewed trade conflict that could disrupt the supply of key rare earth minerals.
No final decision has been made, and tariffs could still be imposed at any time, the sources noted.
The White House and Commerce Department denied any change in policy, saying the administration remains focused on strengthening domestic manufacturing.
Trump previously announced plans for tariffs of around 100% on imported semiconductors, with exemptions for companies producing or planning to produce in the US.
The administration is also considering the effect of tariffs on consumer prices and ongoing trade talks with China.
🔗 Source: Reuters
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Implications, context, and why it matters.
Semiconductor tariffs target specific Section 301 subheadings; chip rates vary
- USTR set tariff changes under Section 301, a US tool against unfair trade, lifting duties to 50% in 2025 on select semiconductor customs subheadings aligning with CHIPS and Science Act 1.
- Coverage totals $18 billion across 382 categories plus 7 statistical reporting numbers, signaling a targeted move, not blanket coverage 1.
- Rates on Chinese goods under Section 301 range from 7.5% on List 4A (2019 consumer plus tech tranche) to 100% on items after 2024 review, and overlaps can push effective rates above 30% 2.
- A machinery exclusion process (temporary waivers) prioritizes solar manufacturing equipment, which lets USTR grant exceptions when US production needs arise 1.
US hardware, auto, defense firms can partner with non‑Chinese magnet suppliers before the 2027 deadline
- US defense faces a January 2027 deadline requiring non‑China sourced magnets for F‑35 jets, submarines, and missiles 3.
- Noveon Magnetics, a rare earth magnet maker, is expanding from 2,000 to 10,000 tonnes per year and is expected to receive federal funding, opening partnerships for tech firms with motor or actuator needs 3.
- New Chinese export controls require government approval for magnets with 0.1% heavy rare earths (elements used to improve heat resistance in magnets), pushing US manufacturers that rely on high‑performance motors to diversify sourcing fast 4.
- Seven of 29 global magnet makers are investable for retail investors (publicly tradable), including VAC Group (Germany) and Proterial (Japan), creating targets for offtake agreements (long‑term purchase contracts) or partnerships 3.
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