U.S.-made semiconductors see relaxed tariffs in China, as suggested by import authorities.
In a surprising move, it seems China has clandestinely abated punitive tariffs of 125% on specific US-made semiconductors, according to unofficial intel gleaned from three import agencies in Shenzhen. This information was passed to CNN on April 25, 2025. The exemptions reportedly apply to integrated circuits or semiconductors, although memory chips remain outside the reprieve.
This revelation was initially exposed by Chinese business magazine, Caijing, citing multiple tech companies that import semiconductors. However, the report turned up missing roughly three hours post-publication. The news, nevertheless, has been spreading like wildfire within industry circles.
For months, China has been projecting an image of strength and resilience in the face of an escalating trade war with the US. However, these exemptions hint at Beijing's need to cushion its tech sector from the detrimental impact of the ongoing trade spat, as it appears to struggle with self-sufficiency or sourcing alternatives for crucial items like semiconductors. Besides semiconductors, China has opted for exemptions on certain aircraft parts, namely engines and landing gear.
Semiconductors are an essential component of nearly every electronic device. Due to their high production costs and complex nature, the industry is primarily controlled by a select few suppliers, including the US, Taiwan, South Korea, Japan, and the Netherlands. In 2024, China imported $11.7 billion worth of semiconductors from the US, as per customs data.
Duncan Clark, chairman of technology investment advisory firm BDA, remarked that these exemptions indicate China's lack of "autonomy in chips." Clark further stated that while China has ambitions to stand alone, it will be some time before it can achieve complete independence.
Which brings us to the question: Why these products and not others? Experts believe that the exemptions will significantly benefit American chipmakers like Intel, Texas Instruments, and Global Foundries, which could be adversely affected by the Chinese tariffs.
Despite these recent moves, China has yet to officially confirm the exemptions on semiconductors in the public sphere. The General Administration of Customs and the customs offices in Shenzhen and Zhongshan, both port cities in Guangdong province, claim ignorance of the exemptions. China's Foreign Ministry spokesperson, when asked about the issue during a regular news conference, expressed unfamiliarity with the situation.
In the aviation industry, Chinese authorities have reportedly granted exemptions as well. As per Olivier Andries, CEO of French engine maker Safran, China has waived taxes on any deliveries of engines, nacelles, landing gears, or parts. This decision could benefit Safran significantly, as they are significant suppliers to China's aviation industry, manufacturing oxygen systems and nacelles for the C919, China's first homegrown mainline passenger plane.
- These activity exemptions, applied to specific US-made semiconductors, imply that China might be eligible for routine imports of microchips due to the detrimental impact of the ongoing trade war.
- Caijing's report suggested that Guangdong's import agencies may have abated punitive tariffs of 125% on US-made semiconductors, which, if true, could significantly benefit American chipmakers such as Intel, Texas Instruments, and Global Foundries.
- The technology sector in China, particularly the semiconductor industry, appears to be struggling with self-sufficiency or sourcing alternatives, as evidenced by the exemptions on certain US-made semiconductors and aircraft parts.
