US Eyeing Tariffs on Chinese Legacy Chips, Raimondo Says
The U.S. may consider imposing new import tariffs on older generation semiconductors from China, Commerce Secretary Gina Raimondo said.
Sign up for a free preview to unlock the rest of this article
If your job depends on informed compliance, you need International Trade Today. Delivered every business day and available any time online, only International Trade Today helps you stay current on the increasingly complex international trade regulatory environment.
Raimondo, speaking Dec. 7 at the Reagan National Defense Forum in California, noted that Commerce recently surveyed a range of U.S. companies and found that nearly half didn’t know whether their products contained any mature-node semiconductors -- also known as legacy chips -- made in China (see 2412060019). She said she wants to “try to take action on” those survey results before the Trump administration enters the White House next month.
“Possibly, there's a need for tariffs on legacy chips,” Raimondo said.
She added that there’s a “huge amount of work” to do before she leaves the administration. “I've told my team, buckle up, we're working till the 19th [of January] at midnight, and I'll have it ready for the next team to take over and not miss a beat.”
Asked about President-elect Donald Trump’s campaign threat to abandon the Chips Act -- which provides federal funding and incentives to American semiconductor firms -- and possibly replace those incentives with tariffs against China, Raimondo called that a “horrific idea.” But she also said “tariffs have their place,” including possibly to counteract Beijing’s large government investments in its legacy chip industry.
“Right now, China is subsidizing those chips in these new fabs, dumping them into the global market and tanking the price,” Raimondo said. “That isn't fair, and there may be a case for tariffs on that so we can compete on a level playing field.”
Raimondo was also asked whether tariffs alone would address the problem. “100% no. Absolutely, 100% no,” she said. The U.S. needs a “vibrant chip industry,” and that includes more investments in research and development within the American semiconductor industry.
She also continued to argue against a decoupling of the U.S. and Chinese economies, calling it a “fool’s errand.” She said she thinks Beijing wants to decouple.
“Why do you think they're building 21 new semiconductor factories? Why do you think GM is struggling to sell cars in China and [Chinese electric carmaker] BYD is producing millions of cars a year? They want to decouple,” Raimondo said. “I think that's bad for the world, and I think it's bad for certainly America.”
Raimondo said she would tell the incoming commerce secretary nominee, expected to be billionaire businessman Howard Lutnick (see 2411190036), to continue to be “tough” and “straightforward” with China.
“Sit at the table, look them in the eye, tell them where you are, and stick to what you say. Don't back down,” she said. “The bravado, I think, is not necessary.”