US President Donald Trump has announced a 100 percent tariff on foreign-made semiconductors, with exemptions for companies that have invested in the US. Trump stated, “We’ll be putting a tariff on of approximately 100 percent on chips and semiconductors, but if you’re building in the United States of America, there’s no charge, even though you’re building and you’re not producing yet”. This move is part of Trump’s broader trade strategy, which has seen tariffs imposed on various industries, including steel, aluminum, automobiles, and pharmaceuticals.
The announcement came after Apple revealed plans to invest $600 billion in the US, although details of the investment were not immediately clear. TSMC, the world’s largest chipmaker, said it would be exempt from the tariff due to its existing investments in the US. “Because Taiwan’s main exporter is TSMC, which has factories in the United States, TSMC is exempt,” National Development Council chief Liu Chin-ching told the Taiwanese legislature.
South Korea’s top chipmakers, Samsung and SK Hynix, which have also invested in facilities in Texas and Indiana, are expected to be exempt from the tariff. Trade envoy Yeo Han-koo said South Korean companies would be exempt from the tariff and that Seoul already faced “favourable” tariffs after signing a trade deal with Washington earlier this year.
However, the Philippines is expected to be severely impacted by the tariffs, with semiconductors making up 70 percent of the country’s exports. Dan Lachica, president of Semiconductor and Electronics Industries in the Philippines Foundation, said the tariffs will be “devastating” for the Philippines.
The CHIPS Act, signed by then-President Joe Biden in 2022, offered billions of dollars in subsidies and tax credits to re-shore investment and manufacturing in the US. Companies like TSMC, Samsung, and SK Hynix have invested in the US since then, but the impact of Trump’s tariffs on these investments remains to be seen.
Trump’s latest round of blanket tariffs on US trade partners is due to go into effect on Thursday, with the White House targeting specific industries like steel, aluminum, automobiles, and pharmaceuticals with separate tariffs. The move is likely to have significant implications for global trade and the US economy.