China waives tariffs on some U.S. semiconductor products, but memory chips will still face high tariffs.

Taiwan • Business • 04/26 07:29
China waives tariffs on some U.S. semiconductor products, but memory chips will still face high tariffs.

Amid the trade tensions between China and the United States, China has exempted some U.S.-made semiconductor products from a 125% punitive tariff, involving eight IC product tariff codes. Companies are allowed to apply for a refund of tariffs paid between April 10 and 24, but memory chips still face high tariffs. Chinese and U.S. officials have both denied engaging in formal negotiations on tariff issues, indicating that both sides have not reached a consensus in trade talks.

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04/27 15:02

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Hwa Sheng Co. sells its Chinese subsidiary's shares and reinvests in Taiwan to invest in new businesses to mitigate risks from US-China tariffs.

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Taiwan's network communications industry utilizes AI and 5G technological innovations to successfully overcome US-China trade barriers and expand into the North American market.

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04/26 07:29

China waives tariffs on some U.S. semiconductor products, but memory chips will still face high tariffs.

Amid the trade tensions between China and the United States, China has exempted some U.S.-made semiconductor products from a 125% punitive tariff, involving eight IC product tariff codes. Companies are allowed to apply for a refund of tariffs paid between April 10 and 24, but memory chips still face high tariffs. Chinese and U.S. officials have both denied engaging in formal negotiations on tariff issues, indicating that both sides have not reached a consensus in trade talks.

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Kyle Bass, Investor: An Analysis of Why the U.S. Holds the Advantage in the U.S.-China Trade War

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04/26 06:00

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Apple plans to shift the production of most iPhones intended for the U.S. market to India by 2026 to address U.S.-China trade tensions.

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China Exempts Tariffs on 8 IC Products, Excluding Memory Chips

According to multiple media reports, China's customs authorities have informed companies that they will cancel the 125% retaliatory tariffs on eight tariff codes related to semiconductor integrated circuits, and only a 13% value-added tax will be required. These products mainly include IC products used for control, amplification, and other purposes, but do not include memory chips with storage functions (tariff code 854232), which still face high tariffs.

Customs departments in Shenzhen, Kunshan, and Zhongshan have notified some companies to confirm the implementation of the tax exemption measures. A person from a Shanghai analog chip company disclosed that they received the notification on the afternoon of April 24, indicating that imported U.S. semiconductor products are no longer subject to tariffs. A Shenzhen supply chain company also posted a screenshot on WeChat showing a 0% tariff in the customs system, further confirming this change.

Tax Refund Policy Details: Imports from April 10 to 24 Eligible for Refund

For imported products that paid tariffs between April 10 and 24, Chinese customs allows companies to apply for a tax refund. Several companies have reported receiving relevant notifications and have begun processing refund procedures. However, authorities such as the General Administration of Customs of China and the China Semiconductor Industry Association have yet to issue official announcements or comments on this policy change.

It is important to note that this tax exemption measure does not broadly relax tariffs on all U.S. semiconductor products but targets specific products considered "irreplaceable." According to a U.S. official familiar with internal Chinese government discussions, this move is based on the "country of origin" principle, based on the actual production or substantial transformation location of the products.

No Consensus on Tariff Negotiations Yet

Despite market rumors of ongoing tariff negotiations between China and the U.S., Chinese officials have repeatedly denied this. Chinese Foreign Ministry spokesperson Guo Jiakun and Ministry of Commerce spokesperson He Yadong both emphasized that no formal negotiations on tariffs are currently underway and urged the U.S. not to confuse the public.

On the other hand, U.S. President Trump stated in an interview with Time magazine that Chinese President Xi Jinping had proactively called him, indicating that both sides are in contact and a new trade agreement might be reached in the next three to four weeks. However, based on current public statements from both sides, there is still a significant gap regarding whether formal tariff negotiations have begun.

Exemption List and Potential Future Expansion

In addition to semiconductor products, foreign media reports indicate that the Chinese government is also considering including medical equipment, chemical raw materials (such as ethane and liquefied petroleum gas), and aircraft leasing in the tariff exemption scope. These industries are considered highly reliant on U.S. imports, and exemptions could help alleviate the cost pressures faced by Chinese companies amid the trade war.

Currently, a list of 131 categories of goods being considered for tariff exemption is circulating in the market, but whether it can be fully implemented remains to be confirmed by officials. According to Caijing magazine, the list includes vaccines, chemicals, aircraft engines, and various semiconductor products. However, the report was deleted from the website and WeChat public account by noon on April 25, indicating that the related policy is still in a sensitive stage.

Background and Impact of the Tax Exemption Measures

China's exemption of tariffs on certain U.S. semiconductor products is seen as a strategic adjustment in the context of the U.S.-China trade war. Since China remains highly dependent on U.S. technology and products in the high-end semiconductor field, especially in analog chips and control chips, exempting some tariffs helps ensure the stability of domestic tech companies' supply chains.

However, memory chips still maintain a high 125% tariff, indicating that China has relatively strong domestic production capacity in this area and is less dependent on U.S. imports, thus not included in this exemption.

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