President Donald Trump stated Wednesday that he plans to impose one hundred pc tariffs on tens of billions of {dollars} of imported semiconductors utilized in client electronics and different merchandise, however indicated he wouldn’t cost firms that commit to creating chips within the U.S.
“We’ll be placing a tariff of roughly one hundred pc on chips and semiconductors,” Trump stated at a White Home occasion the place Apple CEO Tim Cook dinner introduced plans to spice up the corporate’s funding in the USA by $100 billion.
Trump stated firms that make semiconductors within the U.S. won’t face the levies. Nevertheless, it was not fully clear if he meant he would exclude chips that these firms import from overseas, or simply observing that chips made domestically won’t face tariffs.
“You probably have made a dedication to construct or are within the means of constructing, as many are, there isn’t any tariff. If for some cause you say you’re constructing and also you don’t construct, we return and add it up, it accumulates, and we are going to cost you at a later date. It’s important to pay,” Trump stated.
A White Home official, granted anonymity to debate the difficulty, stated extra particulars will come within the official announcement. “However the level he’s clearly making is that the tariffs will probably be nuanced and phased in to reshore manufacturing whereas minimizing provide chain disruptions,” the official stated.
The U.S. imported greater than $60 billion value of semiconductors in 2024, together with greater than $50 billion from Asia. Main suppliers embrace Taiwan, Malaysia, Vietnam, the European Union, Thailand, South Korea and Japan.
China exported about $2 billion value of chips to the U.S. final 12 months. It’s a important supply of chips utilized in automotive manufacturing.
The EU, as a part of its current commerce take care of Trump, secured a dedication that it could solely face a 15 p.c tariff on semiconductors. South Korea and Japan seem to have gained an analogous dedication as effectively.
Trump’s announcement stems from an investigation that Commerce Secretary Howard Lutnick launched on April 1 underneath Part 232 of the 1962 Commerce Enlargement Act. That laws empowers the president to limit imports deemed a danger to nationwide safety.
Taiwan shipped about $12 billion value of chips to the U.S. final 12 months, barely edging out Malaysia as the highest international provider.
Taiwan’s authorities, in feedback filed with the Commerce Division, urged the Trump administration to not impose tariffs on its chips, warning that this is able to “enhance manufacturing prices” for the big range of American firms that use semiconductors and “diminish the willingness of Taiwanese enterprises to spend money on the USA.”
That appeared to be a reference to Taiwan Semiconductor Manufacturing Co.’s plan to take a position as much as $165 billion to construct a serious superior semiconductor manufacturing cluster in Arizona — a mission the Trump administration and its predecessor have been desirous to help.
The brand new semiconductor tariffs are along with different levies Trump has imposed on industrial items, resembling 50 p.c tariffs on metal, aluminum and copper and 15 to 25 p.c tariffs on autos and auto elements. These are meant to encourage extra home manufacturing but in addition elevate prices for firms that use the fabric.
Autos Drive America, a bunch that represents international model automakers, has warned {that a} 25 p.c tariff on semiconductors and semiconductor manufacturing gear might enhance car manufacturing prices by $1,200 to $2,500 per automobile.
The Semiconductor Business Affiliation, the principle U.S. trade group, has warned that “untargeted tariffs” might backfire on the U.S. “by elevating the price of creating know-how and manufacturing chips at dwelling.”
Lutnick’s Part 232 probe additionally coated semiconductor manufacturing gear, however Trump didn’t point out that element on Wednesday.
Japan was the highest international provider of semiconductor manufacturing gear final 12 months, exporting $3.8 billion to the U.S. Singapore was second with greater than $2 billion in shipments to the U.S., whereas the Netherlands, Germany, South Korea and Malaysia every provided greater than $1 billion and China about $900 million.
Ben Johansen contributed to this report.