
Trump vows to impose chip import tariffs of up to 100%

President Donald Trump has said he will impose tariffs – of up to 100 percent – on semiconductors and computer chips and other essential products imported into the United States.
Speaking at the House GOP Issues Conference in Miami, Florida, President Trump called the CHIPS and Science Act introduced by his predecessor President Joe Biden “ridiculous” because it paid billions of dollars of tax payers’ money to companies that could be incentivized by tariffs. Trump said that foreign companies will build plants in the US to avoid import tariffs of 25, 50 or 100 percent imposed on products made outside the US.
“In particular, in a very near future we’re going to be placing tariffs on foreign production of computer chips, semiconductors and pharmaceuticals to return production of these essential goods to the United States of America,” Trump said.
In the speech Trump added steel production and the manufacture of washing machines and clothes dryers to a list of activities for which tariff increases would be considered.
They don’t need money
Trump sounded a warning that is particularly relevant to TSMC (Hsinchu, Taiwan), the foundry that is the global leader in chip manufacturing. Trump said that chip business had moved from the US to Taiwan. “And we want them to come back and we don’t want to give them billions of dollars like this ridiculous program that Biden has to give everybody billions of dollars. They already have billions of dollars. They’ve got nothing but money, Joe. They didn’t need money.”
President Trump continued: “They needed an incentive and the incentive is going to be — they’re not going to want to pay a 25, 50 or even 100 percent tax. They’re going to build their factory with their own money. We don’t have to give them money. They’re going to come in because it’s good for them to come in.”
In fact, tariffs are levied on purchasing companies rather than vendors and so the initial impact will be to increase the cost of US goods made with imported chips.
Trump added that foreign companies incentivized under the CHIPS Act with subsidy money could then use other monies freed up to build factories in other countries.
President Trumps’ plans for tariffs are in stark contrast to the policies advocated by most industry trade bodies. It also revisits a policy flip-flop made by House Speaker Mike Johnson who back in November 2024 had said he would consider repealing the CHIPS Act before back-tracking and saying the CHIPS Act is not on the agenda for repeal.
Industry bodies
The Semiconductor industry Association (SIA) has not yet responded formally to Trump’s speech but it is expected to be hostile to the withdrawal of subsidy support and the imposition of tariffs.
During the previous administration the SIA has been vocal in its support of subsidy awards made under the CHIPS Act. Most of these subsidies have gone to US-headquartered companies with the world’s leading foundry TSMC as a notable exception putting down wafer fabs in Arizona. Samsung has also been supported in Texas although its latest package has been cut.
In a policy advisory prepared for the incoming administration the SIA has said that the bipartisan CHIPS Act introduced in 2020 had reversed chip manufacturing decline in the US. This had fallen from 37 percent of world production in 1990 to 10 percent in 2022. The CHIPS Act had stimulated R&D and triggered the building of domestic wafers fabs, the SIA asserts. “Based on our current trajectory, the US is projected to triple its chipmaking capacity by 2032, growing at a rate that leads the world and increasing America’s share of global capacity for the first time in four decades, ” John Neuffer, president of the SIA, said in his introductory remarks.
The Consumer Technology Association (CTA) is also opposed to tariffs. On its trade advocacy web-page it states: “Global supply chains are intricate and often take decades to develop. Tariffs upend supply chains and put unnecessary costs on American businesses and innovation. Unfair trade practices should be addressed at the World Trade Organization and with our global allies. Opening global markets, not closing them, spurs economic competitiveness.
The CTA calls for the removal of tariff and non-tariff barriers for goods, services, investments and data and calls for the avoidance of government intervention to force the localization of production, data and services.
DeepSeek
Trump also discussed the launch of an AI chatbot by DeepSeek describing it as a positive development but also a wake-up call for the US.
Related links and articles:
Speech transcript via Rollcall
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