Officials relayed these messages over the last several days to stakeholders in government and private industry, according to two people with direct knowledge of the matter and a third person briefed on the conversations. A fourth person following the matter also said the administration was taking a more cautious approach to avoid provoking China. The discussions have not been previously reported.
Sign up here.
Trump aides are taking their time on chip tariffs as they work to avoid a rupture with Beijing over trade issues, which would risk a return to a tit-for-tat trade war and disruption of the flow of critical rare earth minerals, according to two of the people.
Those people cautioned that no decision is final until the administration signs off on it, and also said that triple-digit tariffs could be imposed at any time. The sources spoke anonymously in order to recount private conversations about policy deliberations.
A White House spokesman and a Commerce Department official, asked about the discussions, disputed that the administration had adjusted its posture.
“The Trump Administration remains committed to using every lever of executive power to reshore the manufacturing that’s critical to our national and economic security,” said the spokesman, Kush Desai. “Any anonymously-sourced reports suggesting otherwise are simply Fake News.”
The Commerce official said, “There is no change in department policy regarding semiconductor 232 tariffs.” Neither specified how soon tariffs that have been threatened since the early days of the Trump administration would be finalized, nor did they offer any other details.
The Chinese embassy in Washington said cooperation between the two countries on semiconductors is the best approach. “We welcome the U.S. to work with China to implement the consensus reached at the Busan summit between the two heads of state, create a favorable environment for mutually beneficial cooperation between companies from both sides, and jointly maintain the stability of the global semiconductor supply chain,” said the spokesperson, Liu Pengyu.
TRUMP FACES PRESSURE ON CONSUMER PRICES
Any decision by the administration to slow down or narrow the scope of chip tariffs would come at a sensitive time for Trump. The Republican president is facing growing consumer angst over prices heading into the holiday shopping season.
Hiking taxes on imported semiconductors could raise consumer costs on the gadgets they power, from refrigerators to smartphones. Reuters reported in September that the Trump administration was looking at a plan that would also tax foreign electronic devices based on the number of chips in each one.
During those conversations in Korea, U.S. officials nonetheless warned their Chinese counterparts that they could take national security steps in the coming months that Beijing might find objectionable, according to two people familiar with those conversations. Trump has bet that tariffs can revive domestic factory jobs lost over decades to countries including China.
In April, the Trump administration announced investigations into imports of pharmaceuticals and semiconductors as part of a bid to impose tariffs on them, arguing that extensive reliance on their foreign production poses a national security threat.
Reporting by Laurie Chen in Beijing, Trevor Hunnicutt in Washington and Jeffrey Dastin in San Francisco; Additional reporting by Alexandra Alper in Washington; Editing by Chris Sanders, Matthew Lewis and Jacqueline Wong
Our Standards: The Thomson Reuters Trust Principles.
