In recent developments, it appears that China has quietly decided to roll back the extensive retaliatory tariffs of 125% that had been imposed on several semiconductors imported from the United States. According to information received by CNN on a Friday from three import agencies operating out of Shenzhen, a prominent technology hub in southern China, the exemptions related to specific integrated circuits—commonly referred to as microchips or semiconductors—have been identified. Notably, these exemptions were reportedly unearthed on a Thursday but have not yet been officially acknowledged by Chinese authorities.
Initially, on April 12, 2023, China had hiked its reciprocal tariffs on US goods to an unprecedented rate of 125%. This aggressive move was in direct response to actions taken by former US President Donald Trump, who had increased tariffs on Chinese imports to an equally high 145%. The trade conflict has significantly escalated tensions between the two nations, both of which are grappling with the oil-stained realities of economic rivalry.
Despite projecting confidence and strength in its ongoing trade war with the United States, the recent exemptions indicate that the Chinese government may be reconsidering its position on tariffs for certain essential items. These items might include semiconductors that are either not produced in China or cannot be sourced from other countries. Such a pivot may suggest that the country is feeling the pressure of the prolonged trade discord and attempting to mitigate the impact on critical industries.
As of now, there has been no public confirmation of these tariff exemptions from Chinese authorities. Reports indicate that the General Administration of Customs, as well as customs offices in both Shenzhen and Zongshan—including two significant port cities situated in Guangdong province—have expressed unawareness regarding these new exemptions. CNN has attempted to reach out to the Chinese ministries of commerce and foreign affairs for further comments, but official responses remain elusive.
A specific insight came from Chen Shaoling, a manager at Zhengnenliang Supply Chain, an import agency in Shenzhen. Chen disclosed to CNN that she discovered the exemption on Thursday while conducting a routine customs clearance for her clients. She indicated that the tariffs on eight kinds of integrated circuits—essentially covering the majority of semiconductors except for memory chips—had been waived entirely. Interestingly, she noted that such news would have likely gone unnoticed if they had not initiated the declaration process.
Furthermore, local customs officials in Shenzhen seem to have informed certain companies about this favorable change. A prominent company, Shenzhen HJET Supply Chain, shared the news via its official social media account, jubilantly announcing that they had received notice from China Customs regarding the exemption related to eight specific tariff codes associated with semiconductors and integrated circuits. The announcement clearly stated that imports from the United States that fall under these codes would see their tariffs lowered to zero upon entering China, a significant turnaround that brings relief to many in the industry.
A member of Shenzhen HJET Supply Chain confirmed the news during a follow-up call with CNN, further asserting that the local customs had communicated the latest regulations to them earlier that week. Another Shenzhen-based company, Taihang Semiconductor, also acknowledged receipt of a notice from local customs about these developments. An unnamed employee remarked positively about the situation, indicating the importance of these changes for their operations.
Additional coverage of the exemptions surfaced from Caijing, a respected Chinese business magazine, which cited numerous tech companies—some even based in Shanghai—in its report on the matter. However, this report was soon taken down, raising questions about potential governmental pressures or disapproval regarding the dissemination of this information.
Overall, these tariff exemptions, which appear to be a response to the ongoing pressures of an escalating trade war, could have substantial implications for the semiconductor industry, both in China and the United States. As companies navigate the complexities of international trade regulations, the allowance of zero tariffs for imported semiconductors extends new opportunities while continuing the dynamic interplay between these two global powerhouses.