US delays new tariffs on Chinese chips until 2027

In a public notice posted on Tuesday, the Office of the U.S. Trade Representative said China’s “targeting of the semiconductor industry for dominance is unreasonable and burdens or restricts U.S. commerce and thus is actionable."

The notice said the initial tariff level will remain at zero for 18 months and then be increased in June 2027 to an undetermined rate.

The findings were a result of a trade inquiry launched toward the end of the Biden administration that focused on China’s manufacturing of older-generation chips used across consumer electronics, vehicles, military systems and telecommunications. U.S. and European authorities have been increasingly wary of China’s outsize role in the production of these so-called legacy chips.

The Chinese Embassy in Washington didn’t immediately return a request for comment.

The move to delay new tariffs underscores the Trump administration’s effort to steady relations with Beijing following a bruising trade fight between the U.S. and China earlier this year.

President Trump and Chinese President Xi Jinping agreed to a truce in late October that included a reduction in stiff U.S. tariffs on Chinese goods in exchange for a pledge by China to crack down on the trade in the chemicals used to produce fentanyl.

Xi has been Trump’s toughest trade opponent, pushing back against the administration’s tariff threats and showing a willingness to retaliate. The jousting has rattled markets and unnerved U.S. allies, who have faced pressure from Washington to counter Beijing even as they have been hit with U.S. tariffs of their own.

Trump said last month that he had accepted an invitation to meet with Xi in Beijing in April and that he also planned to host the Chinese president for a state dinner in the coming year.

Write to Sabrina Siddiqui at sabrina.siddiqui@wsj.com