President Donald Trump has threatened several categories of imports with targeted tariffs, already imposing 25% duties on steel and aluminum. Among Trump’s threats are tariffs on “[semiconductors]

and things associated with [semiconductors].” The president argues that this would be a more effective way of encouraging companies to produce chips in the U.S. than the subsidies provided by the CHIPS and Science Act, parts of which could be changed by the Trump administration, too, according to Reuters.

Trump has offered relatively little detail on the possible tariffs on semiconductors beyond suggesting that the duties would be 25% and could be announced as soon as April 2, alongside measures aimed at automobile and pharmaceutical imports. The tariffs would likely be imposed under Trump’s Section 232 or International Emergency Economic Powers Act authorities. The former would likely take longer to be implemented but may be more legally defensible.

Additionally, Trump suggested that the tariff rate on semiconductors, starting at 25%, would “go very substantially higher over a course of a year.” The president indicated he wanted to offer this phasing-in period to allow companies to establish their operations in the U.S. While he did not say what he would target for the peak rate, Trump has previously suggested that it could be as high as 100%.

One of the biggest questions in these tariffs is whether exemptions or exclusions would be offered. In general, Trump has provided limited exclusions to his current tariffs, and the new steel and aluminum tariffs revoked some of the previous exemptions that had been negotiated, including some during Trump’s first term. However, despite the president’s insistence that there would not be any exemptions, he is considering offering Australia such relief, in part due to the U.S.’s trade surplus with the country.

Taiwan, in particular, has sought to get ahead of the potential threat of tariffs on semiconductors, given the importance to its economy. Taiwanese President Lai Ching-te said he would seek to improve communication and increase investment in the U.S. Taiwan Semiconductor Manufacturing Company is seen as a big part of Taiwan’s bargaining and potential investment in the U.S., with a significant component of that investment being part of a possible takeover running Intel’s chips factories. According to Bloomberg, this option was first led by U.S. government officials who approached TSMC with the possibility of the deal. Now, according to The Wall Street Journal, Broadcom may also be a part of a break-up of Intel, with the company looking at Intel’s “chip-design and marketing business.”

The final question to be asked when evaluating the potential impact of these tariffs is whether they are intended to be sources of leverage or permanent measures. The latter appears to be more likely the case in this instance. However, there is a better chance of some exclusions or exemptions being offered for these tariffs than others that Trump has intended to be permanent. Still, this relief may not be too widespread, potentially creating a scenario where the White House creates a set of winners and losers based on which countries or companies were granted the exemptions.