Donald Trump has announced plans to impose a 100% tariff on foreign computer chips, a move expected to raise the cost of electronics, cars, and household appliances. The president stated that companies manufacturing chips in the US would be exempt from the levy, aiming to incentivise domestic production.
During a meeting with Apple CEO Tim Cook, Trump confirmed the tariff, saying, 'We'll be putting a tariff on of approximately 100% on chips and semiconductors. But if you're building in the United States of America, there's no charge.' The meeting also covered Apple's agreement to invest $100bn in US manufacturing over four years, adding to a previous $500bn pledge.
Apple, which assembles about 90% of its iPhones in China, has been highlighted as a company that could benefit from shifting production to the US. Meanwhile, Taiwan Semiconductor Manufacturing Company (TSMC) and South Korean firms Samsung Electronics and SK Hynix have been told they are exempt from the tariff, according to officials.
US-based chipmaker Nvidia is also likely to be exempt due to its domestic manufacturing facilities. However, the policy could devastate other Asian economies; Dan Lachica of the Philippines Semiconductor & Electronics Industries Foundation noted that semiconductors make up 70% of the country's exports, calling the new rules 'devastating'.
The tariff marks a departure from the 2022 Chips and Science Act, which provided over $50bn in subsidies to boost chip production. Trump has opposed that approach, favouring tariffs to force companies to build factories in the US, despite risks of higher prices and squeezed profits. The tariff is set to be officially announced next week.
