Trump's Proposed 100% Tariff on Foreign-Made Semiconductors: Implications and Uncertainties

Trump announces 100% semiconductor tariffs -- 'There's no charge' for chips built in the U.S

This will affect nearly everything from cars to computers and more. President Donald Trump just announced a 100% tariff on foreign-made semiconductors in a bid to force companies to build their chips within the United States or order them from local fabs. According to the Associated Press, Trump made this announcement at the Oval Office after Apple's Tim Cook promised an additional $100 billion in investments to avoid chip tariffs for iPhones. "We'll be putting a tariff of approximately 100% on chips and semiconductors. But if you're building in the United States of America, there's no charge," says Trump. When a reporter asked him how all of these announced investments would impact the American people, the president answered, "We have the biggest chip companies -- the both of them -- but we have the biggest in the world coming in. They're going to Arizona and beyond. And in a short period of time, we'll be [making] up to almost 50% of the chips, starting from nothing." TSMC has already started production at its Arizona fab, with Apple, one of its first customers, expecting to source over 19 billion chips from local chip manufacturing. The chip manufacturer says that demand for its capacity is so high that it's already sold out through 2027, meaning companies that need chips will have to find another provider. Thankfully, Samsung's new Texas fab is also nearing completion, with the company reportedly delaying its completion due to a lack of customers. These massive new facilities were built under the Biden administration's CHIPS and Science Act, jumpstarting the production of some of the most advanced semiconductors in the U.S. Nevertheless, Trump's tariff threats have forced these companies and more to expand their investments, allowing him to secure about $1.5 trillion in commitments for building and expanding the chip making supply chain within America's borders. However, we're still unsure if the output of these new fabs, and all of the existing ones, would be enough to deliver what the American industry needs. Aside from the massive demand brought about by the seismic AI infrastructure buildout being done by tech giants, nearly every other everyday item we take for granted now requires chips -- from cars and appliances to light bulbs and switches. If companies are forced to import chips at elevated rates, the American consumer will end up paying more, driving inflation and reducing demand. We also need to see more details about how the tariff exemptions will work. At the moment, the president says that he won't put a tariff on companies that are buying (or building) locally-made semiconductors and importing them as well -- but how many chips should a company buy and use for it to be exempted from the import tax?

Trump says US will levy 100% tariff on some chip imports

WASHINGTON, Aug 6 (Reuters) - The United States will impose a tariff of about 100% on semiconductor chips imported from countries not producing in America or planning to do so, President Donald Trump said. Trump told reporters in the Oval Office on Wednesday the new tariff rate would apply to "all chips and semiconductors coming into the United States," but would not apply to companies that had made a commitment to manufacture in the United States or were in the process of doing so. "If, for some reason, you say you're building and you don't build, then we go back and we add it up, it accumulates, and we charge you at a later date, you have to pay, and that's a guarantee," Trump added. The comments were not a formal tariff announcement, and Trump offered no further specifics. It is not clear how many chips, or from which country, would be impacted by the new levy. Taiwanese chip contract manufacturer TSMC (2330.TW), opens new tab - which makes chips for most U.S. companies - has factories in the country, so its big customers such as Nvidia (NVDA.O), opens new tab are not likely to face increased tariff costs. The AI chip giant has itself said it plans to invest hundreds of billions of dollars in U.S.-made chips and electronics over the next four years. An Nvidia spokesperson declined to comment for this story. "Large, cash-rich companies that can afford to build in America will be the ones to benefit the most. It's survival of the biggest," said Brian Jacobsen, chief economist at investment advisory firm Annex Wealth Management. Congress created a $52.7 billion semiconductor manufacturing and research subsidy program in 2022. The Commerce Department under President Joe Biden last year convinced all five leading-edge semiconductor firms to locate chip factories in the U.S. as part of the program. The department said the U.S. last year produced about 12% of semiconductor chips globally, down from 40% in 1990. Any chip tariffs would likely target China, with whom Washington is still negotiating a trade deal. "There's so much serious investment in the United States in chip production that much of the sector will be exempt," said Martin Chorzempa, senior fellow at the Peterson Institute for International Economics. Since chips made in China won't be exempt, chips made by SMIC or Huawei would not be either, Chorzempa said, noting that chips from these companies entering the U.S. market were mostly incorporated into devices assembled in China. "If these tariffs were applied without a component tariff, it might not make much difference," he said. Chipmaking nations South Korea and Japan, as well as the European Union, have reached trade deals with the U.S., potentially giving them an advantage. The EU said it agreed to a single 15% tariff rate for the vast majority of EU exports, including cars, chips and pharmaceuticals. South Korea and Japan said separately that U.S. agreed not to give them worse tariff rates than other countries on chips, suggesting a 15% levy as well. Reporting by Andrea Shalal, Kanishka Singh and David Shepardson in Washington, Arsheeya Bajwa in Bengaluru; Additional reporting by Akash Sriram in Bengaluru and Hyunjoo Jin in Seoul; Editing by Leslie Adler, Chris Reese, Sayantani Ghosh and Lincoln Feast. Our Standards: The Thomson Reuters Trust Principles., opens new tab

Trump says US to levy 100% tariff on imported chips but some firms exempt

WASHINGTON, Aug 6 (Reuters) - President Donald Trump said the United States will impose a tariff of about 100% on imports of semiconductors but offered up a big exemption - it will not apply to companies that are manufacturing in the U.S. or have committed to do so. The move is part of Trump's efforts to bring manufacturing back to the United States, and his remarks on Wednesday were made in tandem with an announcement that Apple (AAPL.O), opens new tab would be investing an additional $100 billion in its home market. For companies like Apple, which have committed to build in the United States, "there will be no charge," he told reporters in the Oval Office. He warned, however, that companies should not try to wrangle out of pledges to build U.S. factories. "If, for some reason, you say you're building and you don't build, then we go back and we add it up, it accumulates, and we charge you at a later date, you have to pay, and that's a guarantee," Trump added. The comments were, however, not a formal tariff announcement, and much remains unclear about how companies and countries around the world will be impacted. His remarks produced an immediate flurry of reactions from concerned countries and business lobbies. South Korea's top trade envoy said on Thursday that major chipmakers Samsung Electronics (005930.KS), opens new tab and SK Hynix (000660.KS), opens new tab will not be subject to 100% tariffs, and South Korea will have the most favourable levies on semiconductors under a trade deal between Washington and Seoul. On the other end of the spectrum, the president of the Philippine semiconductor industry, Dan Lachica, said Trump's plan would be "devastating" for his country. In Malaysia, trade minister Tengku Zafrul Aziz warned parliament his country "will risk losing a major market in the United States if its products become less competitive as a result of the imposition of these tariffs." Among those expected to be relatively unscathed is Taiwanese chip contract manufacturer TSMC (2330.TW), opens new tab - which has factories in the United States, so big customers such as Nvidia (NVDA.O), opens new tab are unlikely to face increased tariff costs. Nvidia, which makes cutting-edge AI graphics processing units, also plans to invest hundreds of billions of dollars in U.S.-made chips and electronics over the next four years. An Nvidia spokesperson declined to comment for this story. "Large, cash-rich companies that can afford to build in America will be the ones to benefit the most. It's survival of the biggest," said Brian Jacobsen, chief economist at investment advisory firm Annex Wealth Management. Congress created a $52.7 billion semiconductor manufacturing and research subsidy program in 2022. The Commerce Department under President Joe Biden last year convinced all five leading-edge semiconductor firms to locate chip factories in the U.S. as part of the program. The department said the U.S. last year produced about 12% of semiconductor chips globally, down from 40% in 1990. "There's so much serious investment in the United States in chip production that much of the sector will be exempt," said Martin Chorzempa, senior fellow at the Peterson Institute for International Economics. He added that chips made by China's SMIC or Huawei are unlikely to be exempt, but noted that chips from these companies entering the U.S. market were mostly incorporated into devices assembled in China. "If these tariffs were applied without a component tariff, it might not make much difference," he said. The EU has said it agreed to a single 15% tariff rate for the vast majority of EU exports, including cars, chips and pharmaceuticals. Japan has said that the U.S. agreed not to give it a worse tariff rate than other countries on chips. Shares in Asian chipmakers with big U.S. investment plans climbed on Thursday, with TSMC and Samsung up 4.4% and 2% respectively. Silicon wafer producer GlobalWafers (6488.TWO), opens new tab, which has a plant in Texas, jumped 10%. Samsung declined to comment on Trump's remarks. TSMC did not immediately reply to a request for comment. GlobalWafers said it has proactively implemented cost reduction strategies and believes it has an opportunity to maintain competitiveness. Reporting by Andrea Shalal, Kanishka Singh and David Shepardson in Washington, Arsheeya Bajwa in Bengaluru; Additional reporting by Akash Sriram in Bengaluru and Hyunjoo Jin in Seoul; Editing by Sayantani Ghosh, Miyoung Kim and Edwina Gibbs. Our Standards: The Thomson Reuters Trust Principles., opens new tab

Trump's planned 100% computer chip tariff sparks confusion among businesses and trading partners

President Donald Trump's plans for 100% tariffs on computer chips that aren't made in the U.S. are stoking confusion among businesses and trading partners -- boosting stocks for leading semiconductor companies while leaving smaller producers scrambling to understand the implications. The U.S. imports a relatively small number of chips because most of the foreign-made chips in a device -- from an iPhone to a car -- were already assembled into a product, or part of a product, before it landed in the country. "The real question everybody in the industry is asking is whether there will be a component tariff, where the chips in a device would require some sort of separate tariff calculation," said Martin Chorzempa, a senior fellow at the Peterson Institute for International Economics. Trump said Wednesday that companies that "made a commitment to build" in the U.S. would be spared the import tax, even if they are not yet producing those chips in American factories. "We'll be putting a tariff of approximately 100% on chips and semiconductors," Trump said in the Oval Office while meeting with Apple CEO Tim Cook. "But if you're building in the United States of America, there's no charge." Wall Street investors interpreted that as good news not just for U.S. companies like AMD, Intel and Nvidia, but also for the biggest Asian chipmakers like Samsung and Taiwan Semiconductor Manufacturing Company that have been working to build U.S. factories. But it left greater uncertainty for smaller chipmakers in Europe and Asia that have little exposure to the AI boom but still make semiconductors inserted into essential products like cars or washing machines. These producers "probably aren't large enough to get on the map for an exemption and quite probably wouldn't have the kind of excess capital and margins to be able to add investment at a large scale into the United States," Chorzempa said. The announcement came more than three months after Trump temporarily exempted most electronics from his administration's most onerous tariffs. During the COVID-19 pandemic, a shortage of computer chips increased the price of autos and contributed to higher inflation. Chorzempa said chip tariffs could again raise prices by hundreds of dollars per vehicle if the semiconductors inside a car are not exempt. "There's a chip that allows you to open and close the window," Chorzempa said. "There's a chip that is running the entertainment system. There is a chip that's kind of running all the electronics. There are chips, especially in EVs, that are doing power management, all that kind of stuff." Much of the investment into building U.S. chip factories began with the bipartisan CHIPS and Science Act that President Joe Biden signed into law in 2022, providing more than $50 billion to support new computer chip plants, fund research and train workers for the industry. Trump has vocally opposed those financial incentives and taken a different approach, betting that the threat of dramatically higher chip costs would force most companies to open factories domestically, despite the risk that tariffs could squeeze corporate profits and push up prices for electronics.

Trump's Threat to Hit Chips With 100% Tariffs Raises Big Questions

President Trump's threat to impose 100 percent tariffs on semiconductors would most likely spare many of the world's leading chip manufacturers. The tariffs would not apply to companies that are building factories in the United States, or have promised to do so, he said on Wednesday. Three of the world's leading chip manufacturers are each making significant investments in U.S. operations: Taiwan Semiconductor Manufacturing Company, which makes most of the world's advanced computer chips, and the South Korean memory chip giants Samsung and SK Hynix. But aside from that, Mr. Trump's statement raises many more questions than it answers. Semiconductors are a complicated target for tariffs, involving a supply chain that is both global and specialized. Many chips are manufactured in Taiwan and South Korea, and then sent to another country, like Malaysia, for testing and processing. Next, the chips are put into consumer electronics -- including iPhones, electric cars and smart home appliances -- before they are sold all over the world. Most chips come into the United States embedded in electronics or components. "No detailed provisions have been released," said Joanne Chiao, an analyst at TrendForce, a market research firm in Taipei. "The scope and mechanism of the tariffs remain unclear." The United States imported about 13 percent of the world's chips last year, mainly to drive the booming artificial intelligence and electric vehicle industries, said Jimmy Goodrich, a senior adviser for technology analysis at the RAND Corporation. Six supply chain analysts The New York Times interviewed on Thursday said they were uncertain how the administration might go about implementing and enforcing the tariffs. One route, they suggested, could be to impose the tariffs based on whether the maker of a finished device, for example an Apple iPhone or an Nvidia A.I. server, had facilities in the United States. Another way would be to inspect a device's components to determine whether the maker of its logic chips, like TSMC, or its memory chips, like Samsung, made anything in the United States. This type of piece-by-piece assessment would be a bigger challenge, said William Li, an analyst focused on semiconductors at Counterpoint Research, a tech research firm. Another question stemming from what Mr. Trump said: What kind of manufacturing investments would exempt a company's product from tariffs? For example, the South Korean memory chip maker SK Hynix committed last year to build a facility in Indiana where it will package together multiple chips that had been manufactured elsewhere. Earlier this year, the Commerce Department started an investigation into whether chip imports threatened national security. The Trump administration is expected to announce its result this month. It is unclear how that decision would relate to Mr. Trump's statements on Wednesday, or how U.S. officials would proceed with implementing tariffs on semiconductors. On Thursday, South Korean officials, reacting to Mr. Trump's threat, said they expected Samsung and SK Hynix would be exempt. In Taiwan, officials said they would seek preferential treatment regarding the outcome of the Commerce Department's investigation. Tengku Zafrul Abdul Aziz, Malaysia's investment, trade and industry minister, told Parliament that the semiconductor tariffs would affect major semiconductor-exporting countries. Amy Chang Chien contributed reporting from Taipei, Taiwan, and Zunaira Saieed from Kuala Lumpur.

Trump threatens 100% tariffs on computer chips for companies that don't build in U.S.

President Donald Trump said Wednesday that he would place a 100 percent tariff on all computer chips imported to the United States, but exempt companies that commit to "building" on U.S. soil. The proposal puts economic pressure on U.S. firms, particularly in the tech industry, which generally depend on Asia for the crucial components, setting the stage for more of the showy investment deals Trump has prompted from the industry in his second term. Because importers often pass on the tariff costs to consumers, the chip levies could raise the price of consumer goods dependent on chips ranging from smartphones to kitchen goods to automobiles. Apple has secured an exemption from the chip tariff, Trump said Wednesday. He announced the new semiconductor trade policy at a White House event alongside Apple CEO Tim Cook, who said his company would increase its investment in U.S. jobs and suppliers over coming years. "We're going to be putting a very large tariff on chips and semiconductors," Trump said. "But the good news for companies like Apple is if you're building in the United States or have committed to build, without question, committed to build in the United States, there will be no charge." Apple said in its most recent annual report that "substantially all" of its products are manufactured at least in part by other companies, "located primarily in China mainland, India, Japan, South Korea, Taiwan and Vietnam." In a Wednesday blog post, Apple said it would spend $600 billion on hiring workers and buying from U.S.-based suppliers during Trump's term, expanding a commitment made in February by $100 billion. Much of that spending will go toward regular business operations such as paying employees and producing TV shows for its streaming service. Apple also touted a deal with its longtime supplier Corning, a high-tech glass maker, to eventually produce all the glass for iPhones and Apple Watches at the company's Kentucky facilities and said it was working with a group of computer chip companies to produce more of the components it uses inside the U.S. "We're a proud American company," Cook said at the Wednesday event, where he also said Trump had been "a great advocate for American innovation and manufacturing" and gifted him a glass sculpture of a silicon wafer mounted on a 24-karat gold base. The president praised Cook, calling him a "great, great man." Trump's chip policy is designed to give firms "breathing room" to move manufacturing facilities and supply chains to the U.S., similar to the White House's treatment of tariffs on automakers, said a Trump administration official, who spoke on the condition of anonymity because they were not authorized to speak publicly. The president in April revised his original plans for levies on auto imports to relieve manufacturers from the effects of "stacked" tariffs that would apply to vehicles, component parts and source materials. "We're fully cognizant of the fact that you can't set up a factory overnight on something as complicated as semiconductors," the official said. "This is designed to reflect that and build in some flexibility." White House spokesperson Kush Desai said the administration is taking a "nuanced, multifaceted approach" to boosting American manufacturing. Spokespeople for the Semiconductor Industry Association, which represents semiconductor companies and has lobbied against restrictions on imports, did not immediately return a request for comment. Presidential leverage Trump's tariff regime for his second term, launched in February, blindsided the tech industry which has made innovations such as smartphones into mass market products in part by creating complex supply chains that crisscross the Pacific Ocean. Tech firms joined other companies in announcing plans in line with Trump's urging for more investment in the U.S. Companies including Amazon, chipmaker Nvidia, ChatGPT creator OpenAI, and pharma companies Roche and Eli Lilly announced multibillion-dollar spending commitments that were lauded by the White House. A string of industry CEOs met with the president over the past weeks and months. Apple stood to lose hundreds of millions of dollars from the tariffs, Cook told investors in May. But after the CEO met with Commerce Secretary Howard Lutnick and other senior White House officials in April, Trump said he would exempt iPhones and other consumer tech products, The Washington Post previously reported. Trump has repeatedly threatened to place tariffs on computer chips, crucial components in electronic devices of all kinds and in products such as cars and home appliances. But the components were exempted from his initial tariffs announced in February, pending an investigation by the Commerce Department to evaluate whether chips are subject to a trade law that can be used to apply tariffs to products presenting a national security risk. The administration has conducted a similar process for steel and pharmaceuticals. Trump's pledge to exempt companies "that build in the United States" and Apple's apparent success in securing an exemption suggests other tech bosses may seek similar treatment with their own promises to invest in the United States. Although Trump has said his tariffs are intended to boost U.S. manufacturing, he did not make clear if only new factories would qualify for an exemption, or what scale of investment he would deem sufficient. That could give him significant leverage over corporations reliant on chips. Despite efforts by successive administrations to increase domestic chip manufacturing, Asian suppliers dominate. The White House has celebrated the president's trade policies as creating a "Trump effect," incentivizing businesses to create jobs and prosperity for his supporters. But many of the investments announced by tech companies since he took office in January were in the works before his November victory, or have not yet come to fruition. During his first week in office, Trump announced OpenAI, SoftBank, Oracle and other corporations would invest up to $500 billion in a project called Stargate to build as many as 20 data centers, warehouses stuffed with computers, to power AI projects. As of July, the only facility the companies have announced is a complex in Abilene, Texas, which began construction during the Biden administration. The Washington Post has a content partnership with OpenAI. In his first term, Trump announced a multibillion-dollar deal for Taiwanese tech manufacturer Foxconn to build a facility in Wisconsin. It never opened. Cook, who Trump accidentally called "Tim Apple" at a White House event in his first term, has successfully navigated Trump's previous attempts to levy tariffs that would constrain his company's smartphone business. Cook developed a warm relationship with Trump during his first term, unlike other Silicon Valley CEOs, in part through communicating with him directly without intermediaries, The Post previously reported. That playbook has been emulated by executives at many other businesses, who now regularly call or dine with Trump.

Trump plans 100% tariff on semiconductors, with big exemption

Why it matters: Semiconductor chips are essential to the production of a wide range of goods, including cars, computers, phones, health tech and AI servers. Driving the news: Trump announced the 100% tariff Wednesday during a press conference where he promoted Apple's commitment to increase its U.S. manufacturing commitment by $100 billion. * Trump said he'll exempt chip companies that are making their goods here or have begun building plants here. * "If you're building in the United States of America, there's no charge," he said. * "I think the chip companies are all coming back home," he said. Zoom out: Several major chip manufacturers have already announced plans to build parts here.

Trump announces tariffs 'of approximately 100%' on chips and semiconductors

"We'll be putting a tariff of approximately 100% on chips and semiconductors," Trump said in the Oval Office while meeting with Apple CEO Tim Cook. "But if you're building in the United States of America, there's no charge." The announcement came more than three months after Trump temporarily exempted most electronics from his administration's most onerous tariffs. The Republican president said companies that make computer chips in the U.S. would be spared the import tax. During the COVID-19 pandemic, a shortage of computer chips increased the price of autos and contributed to higher inflation. Investors seemed to interpret the potential tariff exemptions as a positive for Apple and other major tech companies that have been making huge financial commitments to manufacture more chips and other components in the U.S.. Big Tech already has made collective commitments to invest about $1.5 trillion in the U.S. since Trump moved back into the White House in January. That figure includes a $600 billion promise from Apple after the iPhone maker boosted its commitment by tacking another $100 billion on to a previous commitment made in February. Now the question is whether the deal brokered between Cook and Trump will be enough to insulate the millions of iPhones made in China and India from the tariffs that the administration has already imposed and reduce the pressure on the company to raise prices on the new models expected to be unveiled next month. Wall Street certainly seems to think so. After Apple's stock price gained 5% in Wednesday regular trading sessions, the shares rose by another 3% in extended trading after Trump announced some tech companies won't be hit with the latest tariffs while Cook stood alongside him. The shares of AI chipmaker Nvidia, which also has recently made big commitments to the U.S., rose slightly in extended trading to add to the $1 trillion gain in market value the Silicon Valley company has made since the start of Trump's second administration. The stock price of computer chip pioneer Intel, which has fallen on hard times, also climbed in extended trading. Inquiries sent to chip makers Nvidia and Intel were not immediately answered. The chip industry's main trade group, the Semiconductor Industry Association, declined to comment on Trump's latest tariffs. Demand for computer chips has been climbing worldwide, with sales increasing 19.6% in the year-ended in June, according to the World Semiconductor Trade Statistics organization. Trump's tariff threats mark a significant break from existing plans to revive computer chip production in the U.S. that were drawn up during the administration of President Joe Biden. Since taking over from Biden, Trump has been deploying tariffs to incentivize more domestic production. Essentially, the president is betting that the threat of dramatically higher chip costs would force most companies to open factories domestically, despite the risk that tariffs could squeeze corporate profits and push up prices for mobile phones, TVs and refrigerators. By contrast, the bipartisan CHIPS and Science Act that Biden signed into law in 2022 provided more than $50 billion to support new computer chip plants, fund research and train workers for the industry. The mix of funding support, tax credits and other financial incentives were meant to draw in private investment, a strategy that Trump has vocally opposed.

Trump declares 100% computer chip tariff unless firms build in the US

The announcement comes more than three months after Trump temporarily exempted most electronics from his administration's most onerous tariffs. President Donald Trump said on Wednesday that he would impose a 100% tariff on computer chips, only sparing companies that commit to "building" on US soil. The threat raises the prospect of higher prices for essential products dependent on the processors, and it will squeeze US tech firms, often reliant on Asia for chips. It also comes more than three months after Trump temporarily exempted most electronics from his most onerous tariffs. The president announced the tariff alongside Apple CEO Tim Cook on Wednesday, who said his firm would invest an additional $100 billion in domestic manufacturing. That comes on top of a previous commitment made in February, bringing the total to $600bn. The pledge follows similar announcements from companies such as TSMC and Nvidia, who have promised to spend more in the US. Big Tech has already made collective commitments to invest about $1.5 trillion in the country since Trump moved back into the White House in January. Now the question is whether the deal brokered between Cook and Trump will be enough to insulate the millions of iPhones made in China and India from the tariffs that the administration has already imposed and reduce the pressure on the company to raise prices on the new models expected to be unveiled next month. Wall Street seems to think so. After Apple's stock price gained 5% in Wednesday regular trading sessions, the shares rose by more than 2% in extended trading after Trump made his exemption announcement. The shares of AI chipmaker Nvidia, which has also recently made big commitments to the US, rose marginally in extended trading to add to the $1 trillion gain in market value the Silicon Valley company has made since the start of Trump's second administration. Demand for computer chips has been climbing worldwide, with sales increasing 19.6% in the year-ended in June, according to the World Semiconductor Trade Statistics organisation. Trump's tariff threats mark a significant break from existing plans to revive computer chip production in the US that were drawn up during the administration of President Joe Biden. Since taking over from Biden, Trump has been deploying tariffs to incentivise more domestic production. Essentially, the president is betting that the threat of dramatically higher chip costs will force most companies to open factories domestically, despite the risk that tariffs could squeeze corporate profits and push up consumer prices. By contrast, the bipartisan CHIPS and Science Act that Biden signed into law in 2022 provided more than $5bn to support new computer chip plants, fund research, and train workers for the industry. The mix of funding support, tax credits and other financial incentives were meant to draw in private investment, a strategy that Trump has vocally opposed.

Trump's planned 100% computer chip tariff sparks confusion among businesses and trading partners

President Donald Trump's plans for 100% tariffs on computer chips that aren't made in the U.S. are stoking confusion among businesses and trading partners -- boosting stocks for leading semiconductor companies while leaving smaller producers scrambling to understand the implications. The U.S. imports a relatively small number of chips because most of the foreign-made chips in a device -- from an iPhone to a car -- were already assembled into a product, or part of a product, before it landed in the country. "The real question everybody in the industry is asking is whether there will be a component tariff, where the chips in a device would require some sort of separate tariff calculation," said Martin Chorzempa, a senior fellow at the Peterson Institute for International Economics. Trump said Wednesday that companies that "made a commitment to build" in the U.S. would be spared the import tax, even if they are not yet producing those chips in American factories. "We'll be putting a tariff of approximately 100% on chips and semiconductors," Trump said in the Oval Office while meeting with Apple CEO Tim Cook. "But if you're building in the United States of America, there's no charge." Wall Street investors interpreted that as good news not just for U.S. companies like AMD, Intel and Nvidia, but also for the biggest Asian chipmakers like Samsung and Taiwan Semiconductor Manufacturing Company that have been working to build U.S. factories. But it left greater uncertainty for smaller chipmakers in Europe and Asia that have little exposure to the AI boom but still make semiconductors inserted into essential products like cars or washing machines. These producers "probably aren't large enough to get on the map for an exemption and quite probably wouldn't have the kind of excess capital and margins to be able to add investment at a large scale into the United States," Chorzempa said. The announcement came more than three months after Trump temporarily exempted most electronics from his administration's most onerous tariffs. During the COVID-19 pandemic, a shortage of computer chips increased the price of autos and contributed to higher inflation. Chorzempa said chip tariffs could again raise prices by hundreds of dollars per vehicle if the semiconductors inside a car are not exempt. "There's a chip that allows you to open and close the window," Chorzempa said. "There's a chip that is running the entertainment system. There is a chip that's kind of running all the electronics. There are chips, especially in EVs, that are doing power management, all that kind of stuff." Much of the investment into building U.S. chip factories began with the bipartisan CHIPS and Science Act that President Joe Biden signed into law in 2022, providing more than $50 billion to support new computer chip plants, fund research and train workers for the industry. Trump has vocally opposed those financial incentives and taken a different approach, betting that the threat of dramatically higher chip costs would force most companies to open factories domestically, despite the risk that tariffs could squeeze corporate profits and push up prices for electronics.

Trump says he will impose 100% tariffs on semiconductors and computer chips

President Donald Trump's new round of global tariffs is triggering major economic shifts. Here's who stands to gain and who's taking the biggest hits. President Donald Trump said he plans to impose 100% tariffs on computer chips and semiconductors, with an exception for companies that have committed to building in the United States."We'll be putting a tariff, approximately 100%, on chips and semiconductors," Trump said at an Oval Office event on Aug. 6 with Apple CEO Tim Cook, who was visiting the White House to announce plans for an additional $100 billion in investment in the U.S. Trump said companies, such as Apple, that have committed to building in the United States would be spared from the tariffs. He did not provide details on when the tariffs would go into effect. "If you're building in the United States of America, there's no charge. Even though you're building and you're not producing yet in terms of the big numbers of jobs... there will be no charge." The tariffs on computer chips and semiconductors could raise prices on goods such as personal computers, smartphones, electric vehicles, and video game consoles.In April, Nvidia announced plans to manufacture its AI supercomputers entirely in the United States for the first time, committing to building its advanced chips in Arizona and AI supercomputers in Texas. The White House hailed Nvidia's decision as "the Trump Effect in action.""Onshoring these industries is good for the American worker, good for the American economy, and good for American national security," the White House said in a statement while announcing Nvidia's plans. Trump has currently placed tariffs on various sectors, including 50% on steel, aluminum, and copper, and 25% on imported automobiles. Dozens of countries are also facing country-specific tariffs first announced on April 2, dubbed as Liberation Day by Trump.

Fresh US tariffs shake up Asian chip stocks

Donald Trump's tariff threat impacted Asian chip companies. Tokyo Electron and Renesas faced declines. TSMC and Samsung saw gains due to US investments. Taiwan stated TSMC would be exempt. Apple plans further US investment. The tariff aims to boost US chip production. Experts believe this will reshape the global semiconductor industry. Donald Trump's threat to impose 100 percent tariffs on semiconductor imports shook up Asian chip firms Thursday but sector giants TSMC and Samsung were boosted after he pledged to exempt those who invest in the United States. The US president made his warning ahead of the imposition of sweeping tariffs on goods from dozens of countries, and comes amid a global race to develop high-end chips used for artificial intelligence. "We'll be putting a tariff of approximately 100 percent on chips and semiconductors, but if you're building in the United States... there's no charge," he said at the White House. He did not give a timetable for the new levy being enacted. In Japanese trade, Tokyo Electron, a major producer of chipmaking equipment, plunged 3.2 percent on the news, while chipmaker Renesas sank 3.4 percent. Precision tools maker Disco Corporation gave up 1.3 percent and Sumco, which makes silicon wafers, lost 1.2 percent. However, Taipei-listed TSMC -- world's largest contract maker of chips, which counts Nvidia and Apple among its clients -- soared nearly five percent as Taiwan said it would not be affected by the new tariffs. "Because Taiwan's main exporter is TSMC, which has factories in the United States, TSMC is exempt," National Development Council chief Liu Chin-ching said in parliament. Some Taiwanese chipmakers "will be affected" by the 100 percent tariff, but their competitors will also face the same levy, he added. Samsung Electronics, which is pumping billions into the United States, rose two percent in Seoul. South Korean chip giant SK hynix was flat. "The highest-end semiconductors will be excluded" but "this kills producers of low-end chips", including those based in Malaysia or China, Alicia Garcia-Herrero, chief economist for Asia Pacific at Natixis, told AFP. Arisa Liu, senior semiconductor researcher at the Taiwan Institute of Economic Research, said the announcement "will impact the future strategic direction of global semiconductor companies". "Since the United States is the world's largest player in AI and related high-performance computing, this will have a relatively greater impact on companies involved in advanced processes," she said. But Samsung and TSMC should be eligible for the exemption, she added. Apple announced Wednesday that it will invest an additional $100 billion in the United States, taking its total pledge to $600 billion over the next four years. TSMC also plans to invest an additional $100 billion in the United States. burs-jug-kaf/dan

Trump announces 100% tariff on semiconductors, 0% for chips made in US

US President Donald Trump shakes hands with Apple CEO Tim Cook in the Oval Office following the firm's announcement that it would be investing US0 billion in domestic manufacturing. (Reuters/Yonhap) US President Donald Trump declared on Wednesday that he would impose a 100% tariff on semiconductors. Companies that manufacture chips in the US or have promised to do so, however, will be spared from such tariffs, he said. Trump made the announcement during a White House event on Apple's investment in US manufacturing. "We'll be putting a tariff of approximately 100% on chips and semiconductors. But, if you're building in the United States of America, there's no charge," he said. "If you've made a commitment to build, or if you're in the process of building, as many are, there is no tariff," he went on. Trump said that those who make promises would pay back tariffs, noting "[if] you say you're building and you don't build, then we go back and we add it up," calling this a "guarantee." Trump has on many occasions warned of a tariff on semiconductors, but this is the first time he has revealed exact rates. The US leader's announcement was preceded by Apple's pledge to invest US$100 billion in the US over the coming four years. The specific conditions for exemption from the new tariffs, such as how much of the manufacturing process must be conducted in the US, have not been disclosed. Semiconductors are South Korea's second-largest export item to the US after automobiles. According to the Korea International Trade Association, South Korea's chip exports to the US amounted to US$10.6 billion in 2024. The South Korean government previously announced that it had secured most-favored-nation treatment on semiconductors and pharmaceuticals through trade negotiations with the US. As the US has agreed with the EU to impose a mere 15% tariff on semiconductors, South Korea may be subject to the same rate. Apple is not the only semiconductor company to promise to expand investment in the US. Taiwan's TSMC has committed to investing around US$165 billion in the US, while Nvidia plans to spend US$500 billion over the next four years on artificial intelligence infrastructure. GlobalFoundries has promised US$16 billion to expand facilities in New York and Vermont.

Trump's planned 100% computer chip tariff sparks confusion among businesses and trading partners

U.S. President Donald Trump's plans for 100 per cent tariffs on computer chips that aren't made in the U.S. are stoking confusion among businesses and trading partners -- boosting stocks for leading semiconductor companies while leaving smaller producers scrambling to understand the implications. The U.S. imports a relatively small number of chips because most of the foreign-made chips in a device -- from an iPhone to a car -- were already assembled into a product, or part of a product, before it landed in the country. "The real question everybody in the industry is asking is whether there will be a component tariff, where the chips in a device would require some sort of separate tariff calculation," said Martin Chorzempa, a senior fellow at the Peterson Institute for International Economics. Trump said Wednesday that companies that "made a commitment to build" in the U.S. would be spared the import tax, even if they are not yet producing those chips in American factories. "We'll be putting a tariff of approximately 100 per cent on chips and semiconductors," Trump said in the Oval Office while meeting with Apple CEO Tim Cook. "But if you're building in the United States of America, there's no charge." Wall Street investors interpreted that as good news not just for U.S. companies like AMD, Intel and Nvidia, but also for the biggest Asian chipmakers like Samsung and Taiwan Semiconductor Manufacturing Company that have been working to build U.S. factories. But it left greater uncertainty for smaller chipmakers in Europe and Asia that have little exposure to the AI boom but still make semiconductors inserted into essential products like cars or washing machines. These producers "probably aren't large enough to get on the map for an exemption and quite probably wouldn't have the kind of excess capital and margins to be able to add investment at a large scale into the United States," Chorzempa said. The announcement came more than three months after Trump temporarily exempted most electronics from his administration's most onerous tariffs. During the COVID-19 pandemic, a shortage of computer chips increased the price of autos and contributed to higher inflation. Chorzempa said chip tariffs could again raise prices by hundreds of dollars per vehicle if the semiconductors inside a car are not exempt. "There's a chip that allows you to open and close the window," Chorzempa said. "There's a chip that is running the entertainment system. There is a chip that's kind of running all the electronics. There are chips, especially in EVs, that are doing power management, all that kind of stuff." Much of the investment into building U.S. chip factories began with the bipartisan CHIPS and Science Act that President Joe Biden signed into law in 2022, providing more than US$50 billion to support new computer chip plants, fund research and train workers for the industry. Trump has vocally opposed those financial incentives and taken a different approach, betting that the threat of dramatically higher chip costs would force most companies to open factories domestically, despite the risk that tariffs could squeeze corporate profits and push up prices for electronics.