"The most likely is after mid-August, at the latest by September," be cautious of U.S. semiconductor tariffs, the impact may exceed expectations

The U.S. semiconductor tariffs are about to be implemented, with the time window locked between mid-August and September, and the impact may exceed market expectations.

On July 22, according to news from the Chasing Wind Trading Desk, Barclays stated in its latest research report that the time window for the imposition of semiconductor tariffs under Section 232 of the U.S. Trade Act has been basically clarified: it is most likely to be implemented after mid-August, and no later than September.

According to CCTV News reported on April 15, U.S. Secretary of Commerce Gina Raimondo stated that the exemptions (for "reciprocal tariffs" on electronic products such as smartphones, computers, and chips) are only temporary measures, lasting only until the U.S. government formulates a new tariff plan for the semiconductor industry.

Analysts at Barclays, including Simon Coles, pointed out that it is important to be cautious, as the market's current optimistic expectation of a flat 25% tariff may be overly idealistic; the actual tax rate may adopt a progressive model, with impacts exceeding market expectations.

Barclays also added that AI chips and semiconductor equipment also face tariff risks, emphasizing that tariffs will have a significant impact on chip demand from the second half of 2025 to 2026.

Tariff Implementation Timeline Basically Confirmed

According to earlier reports from the Global Times, on April 13, Trump announced a national security trade investigation into the semiconductor industry. He stated on social media: "In the upcoming national security trade investigation, we will focus on semiconductors and the entire electronic supply chain."

Barclays stated that according to the legal procedures of Section 232 of the Trade Expansion Act of 1962, the Department of Commerce must submit an investigation report to the President within 270 days, after which the President has 90 days to decide on tariff measures and implement them within 15 days.

August 12 is the deadline for the 90-day truce agreement between China and the U.S. The two sides announced on May 12 that they would suspend the imposition of certain tariffs, and this truce agreement will expire on August 12. According to People's Daily news on May 12, a joint statement was released following the China-U.S. Geneva economic and trade talks, announcing a 24% tariff suspension for 90 days.

Barclays pointed out that key time nodes indicate that the suspension of tariff increases between China and the U.S. will expire on August 12, and an extension is expected. Statements from the President and Secretary of Commerce Gina Raimondo suggest that the national security trade investigation report for the semiconductor industry may be ready by the end of this month, but will be advanced after the investigation into the pharmaceutical industry, as pharmaceuticals are considered a priority

"Considering the current timeline, semiconductor tariffs are most likely to be implemented after mid-August, and at the latest by September, unless other delays occur."

Additionally, Barclays also reminded that, unlike "reciprocal tariffs," semiconductor tariffs under Section 232 are likely to be enforced once announced.

Expected Tariff Rate: 25% May Just Be the Starting Point

The widely anticipated 25% uniform tariff rate is based on historical precedents from previous Section 232 investigations, but Barclays analysts believe this assumption may be overly optimistic, with two possible tariff rate models:

Incremental Tariff Model: Considering the high construction costs of domestic wafer fabs in the U.S., a 25% tariff may not be sufficient to drive manufacturing back. The government may adopt a tiered tariff approach, starting with a lower rate that gradually increases over time, providing the industry with a buffer period to adjust supply chains. This model has been applied in the automotive industry.

Differentiated Tariffs: Different countries may face different tariff rates, similar to the implementation of Section 232 tariffs in the steel industry.

Impact Exceeds Expectations

Barclays views Section 232 as a significant risk for the semiconductor industry, with potential impacts exceeding market expectations, including the following aspects:

Equipment Industry Risk: Even semiconductor equipment may face phased taxation (initially 0%, then increasing), which contradicts previous market expectations of exemptions.

AI Chip Uncertainty: Although the market generally believes AI semiconductors will be exempt, analysts argue that there are also taxation risks in this area.

Demand Shock Timing: The implementation of tariffs will have a significant negative impact on semiconductor demand in the second half of 2025 and 2026, necessitating preparation for potential industry adjustments.

Tariff Cumulative Effect: Section 232 tariffs will not be imposed in addition to "reciprocal tariffs"; only the declared value of the semiconductor portion of products will face industry tariffs, while the non-semiconductor portion will still be subject to reciprocal tariffs.

Industry Giants' Statements: High Calls for Exemptions on Equipment and Materials

Barclays also pointed out in its report that the public opinions submitted by major semiconductor companies to the Department of Commerce hold significant influence.

Texas Instruments emphasized that U.S. manufacturing of chips must maintain global competitiveness, and the government should implement policies that support investments in U.S. manufacturing, encouraging demand for domestically produced chips across industries.

TSMC noted that imposing tariffs on semiconductor equipment would increase costs and delay the progress of U.S. wafer fab projects, and any tariffs or restrictions should provide realistic adjustment time for companies and investors committed to investing in chip manufacturing in the U.S.

Intel also supports protecting U.S. chip manufacturers and calls for leniency on semiconductor equipment and materials