China Hits Japanese Semiconductor Gas with 'Tariff Bomb'; Japan Calls Move 'Unjustified'

【Financial News, Tokyo = Correspondent Hye-jin Seo】China has provisionally determined that Japanese specialty gases for semiconductor production were imported at excessively low prices, harming its domestic industry, and has initiated anti-dumping measures. As a result, Chinese importers must pay customs deposits equivalent to as much as 99.2% of the import value when bringing in Japanese products from the 8th. The Japanese government has protested, saying it will respond to prevent unjustified harm to Japanese companies.
According to Japan Broadcasting Corporation (NHK), Nihon Keizai Shimbun and The Asahi Shimbun on the 8th, the Ministry of Commerce of the People's Republic of China (MOFCOM) announced the previous day a preliminary finding in its anti-dumping investigation into Japanese dichlorosilane that dumping had caused material injury to China's related industries.
The deposit rate for Shin-Etsu Chemical, a major Japanese chemical company, is 99.2%. An 80.8% rate applies to Denka's subsidiary Denal Silane, while the remaining Japanese companies face a rate of 99.2%.
Dichlorosilane is a specialty gas used in the deposition process to form thin films on wafers and other materials during semiconductor and liquid-crystal panel production.
MOFCOM launched an anti-dumping investigation into Japanese dichlorosilane in January. The deposits are a provisional measure intended to adjust import prices before a final determination.
To continue importing Japanese products, Chinese importers must deposit an additional 80.8% to 99.2% of the import value on top of the existing purchase price. Although formal tariffs are not being imposed immediately, the measure will significantly increase importers' financial burden and could affect the price competitiveness of Japanese products and their exports to China.
If China also determines in its final investigation that dumping occurred and that its domestic industry was harmed, it could impose formal anti-dumping tariffs.
MOFCOM cited dumping by Japanese products and injury to China's domestic industry as the basis for the measure, without mentioning any political background. Japanese media, however, believe the move may be linked to China's economic pressure on Japan following Prime Minister Sanae Takaichi's parliamentary remarks concerning a 'Taiwan contingency.'
In November last year, Prime Minister Takaichi told parliament that a Taiwan contingency could constitute a situation threatening Japan's survival. In response, China tightened export controls on dual-use items, including rare earths, destined for Japan.
The Asahi Shimbun reported that the anti-dumping measure could also be part of China's continuing economic pressure on Japan following the prime minister's remarks. NHK and Nihon Keizai Shimbun likewise reported that some observers view China's anti-dumping investigation and strengthened export controls on Japan as responses to Takaichi's comments.
The Japanese government also began responding. Chief Cabinet Secretary Minoru Kihara said at a press conference after a Cabinet meeting, "We will work closely with the Japanese companies subject to the investigation to thoroughly examine the situation and its impact," adding, "We will respond appropriately to prevent any unjustified impact on corporate activities."
Regarding export controls on dual-use items, including rare earths, Kihara said, "We are urging China to withdraw measures targeting Japan alone." He added, "We will strengthen solidarity with countries that share our views, including the Group of Seven (G7), and respond appropriately while working closely with Japanese companies."
[email protected] Hye-jin Seo Reporter