The US president has announced plans to impose new 100% tariffs on semiconductor chips made outside of the US.
Donald Trump has revealed bold new plans to impose a 100% tariff on all foreign-made semiconductors. His goal is to strengthen domestic chip production, with companies building chips in the US being exempt from the charges.
The US president mentioned the proposed tariff rate during an Oval Office meeting with Apple CEO Tim Cook. Trump’s comments on Wednesday were not a formal tariff announcement, with exact details of the proposal remaining mostly unclear.
Apple is expected to be one of the companies spared from the levy. This comes after the tech giant pledged to invest an additional $100 billion in US manufacturing over four years. This latest investment brings its total commitment to $600 billion this year.
Trump openly praised Apple for leading the way in setting an example by increasing domestic production in the US. Currently, most of Apple’s products, including iPhones and MacBooks, are designed in America but assembled in China.
Top semiconductor producers await tariff impact
With little details so far, markets await further information about how companies and countries around the world will be impacted. Aside from Apple, there is no clear indication about which firms will manage to avoid being hit with the 100% tariff.
Companies with strong ongoing investment commitments and established manufacturing bases in the US could be among those spared. US-based chip giants like Nvidia and Intel could be set to avoid sanctions.
Nvidia has previously outlined plans to invest heavily in US manufacturing operations over the next four years. It is due to produce up to $500 billion of AI infrastructure through partnerships with TSMC, Foxconn, Wistron, and others.
Meanwhile, government officials in Taiwan and South Korea have issued statements claiming that TSMC, SK Hynix, and Samsung would be exempt from the new levy. TSMC has already begun expanding its US production facilities.
Wider implications of Trump’s semiconductor tariffs
At the other end of the scale, smaller chipmakers based outside the US could be most affected by the tariffs. President of the Philippine semiconductor industry, Dan Lachica, said Trump’s plan would be “devastating” for his country. Semiconductors make up around 70% of the country’s exports.
Legacy chips produced in Southeast Asian countries like Singapore and Malaysia are also likely take a big hit. Semiconductor exports to the US make up about 8.9% of Singapore’s total goods exports to the country.
Malaysia’s trade minister has reached out to US officials seeking clarity on the steep tariffs on US imports of semiconductors. The Malaysian government is worried that it could risk losing a key market if its products become less competitive.
Trump’s new 100% tariff on foreign computer chips is due to be officially announced next week. In the meantime, semiconductor companies of all sizes await the potential future impact on their businesses.
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