SEMI Calls For U.S.-China Tariff Removals

In testimony today before a U.S. government interagency panel considering tariffs on $300 billion worth of Chinese goods, SEMI called for the removal of about 30 tariff lines, which cover items central to the semiconductor manufacturing process.

Mike Russo, vice president of global industry advocacy at SEMI, explained in his testimony that while SEMI strongly supports efforts to better protect valuable intellectual property (IP), tariffs will not help address Chinese trade practices, and will ultimately have significant and unintended consequences.

SEMI asserts that these tariffs will harm not only companies operating in the U.S., but other companies as well in the semiconductor supply chain by increasing costs, introducing uncertainty, and most problematically, stifling innovation. Collectively, SEMI estimates that this round of tariffs will cost its 430 U.S. members millions annually in additional duties. All told, SEMI estimates that all U.S. and Chinese retaliatory tariffs will cost members nearly $800 million in annual duties.

SEMI’s full written comments note that these tariffs, on top of those already in force and the retaliatory tariffs, will hamstring the industry. The tariffs seem to target firms for simply operating in China. Given that tools, materials, and related products are extremely complex, precise, and difficult to manufacture, it is unreasonable to believe that a constituent component can simply be replaced with a part or tool from another source. Further, this U.S. government approach does not take into account that many items subject to these tariffs are not available, at sufficient quality and cost, from domestic sources, or even non-Chinese sources.

Over the past year, SEMI has submitted written comments and offered testimony on the three previous rounds of tariffs, which covered about $250 billion worth of Chinese goods, or about half of all imports from China. The tariffs hit various components in the electronics manufacturing supply chain critical to the semiconductor industry, including materials and equipment used to manufacture wafers, boules, and chips as well as test, inspection and sensing equipment.

We urge SEMI members to review the $300 billion U.S. tariff list to determine the level, if any, of impact. We also strongly encourage members to review Chinese retaliatory lists as well. Any SEMI members with questions should contact Jay Chittooran, Global Public Policy Manager at SEMI, at [email protected].