The US semiconductor industry emphasizes the importance of harmonized rules of trade and uniform implementation for the global semiconductor trade, which accounts for $1.56 trillion in annual trade. The Harmonized System (HS) has played a crucial role in lowering barriers between parties in the semiconductor supply chain. The industry recommends maintaining the existing structure of semiconductor headings 8541 and 8542, which classify semiconductors based on their essential character rather than by function. Additionally, the industry suggests enhancing alignment between HS and trade agreements to avoid unintended costs and consequences. The current HS structure underpins every global free trade agreement, including multilateral tariff agreements like the WTO Information Technology Agreement. The industry believes that increasing coordination between the HS and trade agreements could mitigate the negative impact of significant HS amendments on tariff commitments.
