Trump threatens 100% chip tariff with US manufacturing loophole
Donald Trump has once again signaled his intent to fundamentally reshape the global technology supply chain, announcing a sweeping 100 percent import tariff on computer chips and semiconductors. The move, revealed in the first week of his presidency, aims to compel silicon manufacturing back to American shores by making foreign-produced processors prohibitively expensive. However, this aggressive stance comes with a significant and potentially far-reaching exemption: companies that have already committed to or are actively engaged in building manufacturing facilities within the United States will be entirely exempt from the new import taxes.
This major carve-out was underscored during a live news conference where Apple CEO Tim Cook unveiled a new $100 billion US manufacturing plan. Trump explicitly stated that Apple’s commitment meant it would face “no charge” from the upcoming tariffs. He elaborated on the policy, confirming that even a pledge to invest in American manufacturing could be sufficient to avoid the levy. “If you’re building in the United States of America, there’s no charge, even though you’re building and not producing yet,” he affirmed, adding, “If you’ve made a commitment to build or you’re in the process of building, as many are, there is no tariff, OK?” He also warned that any company failing to follow through on such a commitment would face retroactive tariffs, with the accumulated charges to be paid at a later date.
The broad nature of this exemption immediately raises questions about which companies would genuinely be impacted by such a tariff. Many of the world’s leading chipmakers already have substantial investments or commitments to US-based manufacturing. For instance, Taiwan Semiconductor Manufacturing Company (TSMC), a dominant force in advanced chip production and a frequent target of Trump’s previous criticisms, announced a $100 billion US investment just this past March. This pre-existing trend of foreign investment in US manufacturing facilities could mean that the proposed tariff, despite its dramatic 100 percent rate, might apply to very few major industry players.
Further ambiguity surrounds whether the tariff would target the actual chip fabricators, like TSMC, or the technology companies that design chips but rely on external foundries for production, such as Apple. While Apple designs its own processors, it does not manufacture them. This distinction is crucial for understanding the potential scope and impact of the policy.
Moreover, this is not the first time Trump has threatened tariffs on semiconductors. Similar proposals in January and February were ultimately excluded from broader tariff implementations in April, suggesting a precedent for such threats not always materializing into concrete policy. The timeline for the potential new chip tariffs remains unspecified, although Trump’s new general reciprocal tariffs on dozens of countries are slated to take effect imminently.
The economic reality of domestic chip production also adds another layer to the discussion. AMD CEO Lisa Su revealed in July that chips manufactured by TSMC in the US could cost anywhere from 5 to 20 percent more than their overseas counterparts. This cost differential highlights the economic challenges associated with reshoring advanced manufacturing, even with governmental incentives or disincentives like tariffs. Ultimately, the precise impact and even the eventual implementation of this latest tariff threat remain uncertain, casting a shadow of strategic ambiguity over the global semiconductor industry.