United States President Donald Trump has hinted at substantial tariffs on imported semiconductors.
Speaking at a news conference on Tuesday, US time, Trump was asked about his plans for tariffs on pharmaceuticals and semiconductors. He responded by saying “It will be 25 percent and higher, and it will go very substantially higher over the course of a year.”
“But we want to give them time to come in because, you know, when they come into the United States and they have their plant or factory here, there is no tariff. So we want to give a little bit of a chance.”
It’s unclear if Trump’s remarks applied to pharmaceuticals, or semiconductors, or both.
If the 25-percent-and-rising tariffs Trump mentioned do apply to semiconductors, the impact will be substantial as many such products are made outside the USA – often because no facility on US soil can create comparable products. Sometimes that’s because the likes of Taiwan’s TSMC simply produce more advanced products than any rival. In other fields, companies outside the US have chosen to specialize in silicon that no US-based manufacturer produces.
Trump also didn’t detail whether manufacturers can avoid tariffs if they commit to building plants in the USA, or if the imposts will only ease once factories start churning out products.
That detail matters because semiconductor fabs take years to build and bring up to speed. Trump has previously indicated he feels the CHIPS Act subsidies for companies that build such fabs are not as effective as tariffs, and reportedly hopes to revisit some planned payments.
If that happens, it could impact the many semiconductor fab builds currently under way in the USA.
The Trump administration’s current policy of imposing an extra ten percent tariff on imports from China on Tuesday saw Acer confirm it would pass on the cost of the impost by increasing the price of its laptops by ten percent in the USA.
Higher tariffs would presumably lead to further price increases, impacting not just consumer electronics but the massive buildouts of AI infrastructure which usually include Nvidia silicon made by TSMC.
Trump in January signed an Executive Order that “establishes the commitment of the United States to sustain and enhance America’s dominance in AI to promote human flourishing, economic competitiveness, and national security.” The president has also opined that AI is “going to create tremendous numbers of jobs. It’s going to also create a lot of benefits, medically, for cancer research and other things. It’s going to have a huge positive impact.”
Those aspirations aren’t inconsistent with a desire to have more semiconductors made in the USA. But they may be harder to achieve in the short term if they make electronics more expensive while manufacturers meet whatever tariff-avoiding thresholds the administration eventually details. ®
