Trade Fragmentation Rising
- Chinese chip leaders publicly urged a coordinated effort to build domestic lithography capabilities, likening it to an 'ASML' project. (bits-chips.com) - Simultaneously, recent US‑UK tariff actions and a new tariff‑refund system led thousands of companies to file claims. (commonslibrary.parliament.uk)(insurancejournal.com) - The combined policy moves are pushing regionalisation and substitution, meaning deals may need explicit localisation and export‑control fields in CRM. (bits-chips.com)(commonslibrary.parliament.uk)
Trade is splitting into blocs at both ends: China’s chip industry is organizing around self-sufficiency, while companies in the U.S. and U.K. are reorganizing around tariffs and refunds. (scmp.com) (commonslibrary.parliament.uk) In China, senior executives from Semiconductor Manufacturing International Corporation, Yangtze Memory Technologies, Naura Technology and Empyrean co-authored a March 5 call for a national effort to build a domestic lithography champion modeled on ASML. They wrote that China’s chip-equipment base is still “small, fragmented and weak” and said planning should begin during the 2026-2030 five-year period. (scmp.com) Lithography is the toolset that prints circuit patterns onto silicon wafers, and extreme ultraviolet machines are the most advanced version of that toolset. The executives said an ASML extreme ultraviolet machine uses more than 100,000 components from 5,000 suppliers, which is why they argued a single-company approach will not work. (scmp.com) At the same time, the House of Commons Library said on April 14 that the U.S. has imposed tariffs on most U.K. goods imported into the American market. The briefing said a 10% tariff applies to most other U.K. goods, while steel, aluminium and derivative goods have faced a 25% tariff and autos moved into a separate framework under the U.S.-U.K. Economic Prosperity Deal announced on May 8, 2025. (commonslibrary.parliament.uk) (business.gov.uk) That deal did not restore open trade. U.S. Customs and Border Protection said the automobile tariff-rate quota was 65,205 vehicles for the June 30 to December 31, 2025 period, and rises to an annual limit of 100,000 vehicles from 2026 onward. (content.govdelivery.com) The tariff fight is now spilling into back-office systems. Reuters reported on April 21 that a new U.S. refund portal went live on Monday for illegally collected tariffs, with 56,497 importers having completed the steps for electronic refunds by April 9, covering $127 billion of the roughly $166 billion eligible. (insurancejournal.com) More than 330,000 importers paid the tariffs at issue on 53 million shipments, according to the same court filings cited by Reuters. Basic Fun, the Florida toymaker, said it had more than 500 files to upload on launch day, while Wild Rye said its customs broker charged $250 for the first phase of filing. (insurancejournal.com) The common thread is substitution. China is trying to replace foreign chip tools with domestic ones, and exporters to the U.S. are trying to route, price and document trade around tariff lines that now vary by country, product and quota. (scmp.com) (commonslibrary.parliament.uk) That changes what companies need to track in sales systems. A cross-border deal now can hinge on whether a product contains controlled technology, whether a shipment qualifies for a country-specific quota, and whether the customer needs a local-source alternative if export rules tighten. (commonslibrary.parliament.uk) (scmp.com) The old assumption was that trade software mainly needed price, product and delivery date. In 2026, companies are being pushed to add location, tariff treatment, quota status and export-control exposure before a deal is even approved. (insurancejournal.com) (content.govdelivery.com)
