Kathmandu— US President Donald Trump signed an executive order on Thursday that imposes a 15% tariff on imported products made from polysilicon, a crucial material used in semiconductors and solar panels. The move is intended to help protect US manufacturers as they face increasing competition from China's chip industry, marking the latest escalation in trade tensions between the world’s two largest economies.

National Security Investigation

The tariff order follows a national security investigation into the production of polysilicon overseas. The move is part of broader efforts to bolster domestic manufacturing and counter China's dominance in critical technology supply chains. Trump said that for decades, foreign firms have weakened US producers in the polysilicon sector, leading to a significant decline in the country’s share of global polysilicon production from 50% in 2005 to less than 2% in 2024.

Chinese Response

The Chinese embassy in Washington criticized the move, stating that it “seriously disrupts” trade between the two countries and vowed to protect its companies. The embassy accused Washingtom of abusing state power to target Chinese businesses, arguing that protectionism will not make the US more competitive.

Impact on Domestic Producers

The measures are expected to benefit US firms Hemlock Semiconductor and Wacker Chemie, which are the main domestic producers of polysilicon. The tariff is set to take effect in December, alongside minimum import prices for polysilicon and related products.

Analysts quoted by Chinese state media outlet Global Times said that this new tariff marks another step in Washington's efforts to limit China’s role in critical technology supply chains.

(With inputs from BBC News)

Originally published on abcnews.com.np.