President Donald Trump announced plans for a 100% tariff on semiconductor imports unless companies manufacture within the United States.
President Donald Trump stated on Wednesday that a 100% tariff on imported semiconductors and chips would be imposed. However, companies that manufacture their products in the United States will remain exempt from these duties. This new sector-specific tariff highlights Trump’s ongoing efforts to incentivize companies to relocate their manufacturing operations to the U.S.
The details surrounding this plan, such as the extent of U.S. manufacturing required to qualify for the tariff exemption, have not yet been revealed. Speaking from the Oval Office, Trump emphasized the significant impact of the impending tariffs. “We’re going to be putting a very large tariff on chips and semiconductors,” Trump remarked. The policy aims to encourage tech giants like Apple to continue expanding their U.S.-based manufacturing.
Trump cited Apple as an example of a company that would benefit from the exemption, provided they are “building in the United States or have committed to build, without question, committed to build in the United States.” As a result, Apple would avoid the 100% tariffs due to their recent commitment to increase their U.S. investment by $100 billion over the next four years, supplementing the $500 billion they have pledged previously.
Several prominent chip manufacturers, including Taiwan Semiconductor Manufacturing Company (TSMC), Nvidia, and GlobalFoundries, have already announced plans to extend their manufacturing operations in the U.S. The Semiconductor Industry Association reports that more than 130 projects, valued at a combined $600 billion, have been announced across the U.S. since 2020.
TSMC, recognized as the world’s largest contract chip producer, has pledged a $165 billion investment in U.S. manufacturing. In a similar move, Nvidia, identified as the world’s most valuable company in market terms, declared intentions in April to allocate $500 billion towards AI infrastructure in the U.S. over the following four years.
GlobalFoundries made a significant commitment in June, expressing plans to invest $16 billion to expand its semiconductor manufacturing facilities in New York and Vermont. Texas Instruments also revealed in June its intentions to enhance its presence in the U.S. market with a $60 billion investment into seven chip fabrication sites. This move aims to strengthen relationships with other major customers, including Apple, Ford, Medtronic, Nvidia, and SpaceX.
As companies navigate these tariffs and consider their implications, the incentive to base or expand manufacturing operations within the U.S. could reshape the semiconductor and chip industries significantly.
According to CNBC, the comprehensive details surrounding these tariffs and their potential ramifications for manufacturers will be closely watched by industry stakeholders.