U.S. President Donald Trump speaks to reporters close to Air Power One on the the Lehigh Valley Worldwide Airport on August 03, 2025 in Allentown, Pennsylvania.
Anna Moneymaker | Getty Photos
After months of hypothesis, U.S. President Donald Trump has divulged extra of his semiconductor tariff plans, however his newest threats would possibly elevate extra questions than solutions.
On Wednesday, Trump stated he’ll impose a 100% tariff on imports of semiconductors and chips, however not for corporations which can be “constructing in the US.”
As semiconductors symbolize an over $600 billion trade on the coronary heart of the fashionable digital financial system, any potential tariffs maintain huge weight.
Nonetheless, consultants say the President has but to supply key particulars on the coverage, which can in the end decide their full impression and targets.
“It is nonetheless too early to pin down the impression of the tariffs on the semiconductor sector,” Ray Wang, analysis director of semiconductors, provide chain and rising know-how at The Futurum Group, advised CNBC.
“The ultimate rule is probably going nonetheless being drafted and the technical particulars are removed from clear at this level.”
Huge gamers win?
One of many largest questions for chip gamers and traders will probably be how a lot manufacturing an organization must decide to the U.S. to qualify for the tariff exemption.
The U.S. has been working to onshore its semiconductor provide chain for a few years now. Since 2020, the world’s largest semiconductor corporations equivalent to TSMC and Samsung Electronics have dedicated a whole lot of billions of {dollars} to constructing crops within the U.S.
Chatting with CNBC’s “Squawk Field Asia” on Thursday, James Sullivan, managing director and head of Asia Pacific Fairness Analysis at J.P. Morgan, stated this might imply most main chip producers receiving exemptions.
If that is so, the coverage might have the impact of “persevering with to consolidate market share amongst the most important cap gamers within the area,” Sullivan stated.
Certainly, shares of main Asian chip corporations like TSMC, which has vital investments within the U.S., rose in Thursday morning buying and selling following Trump’s announcement. Early this yr, TSMC introduced it will broaden its investments within the U.S. to $165 billion.
Shares of South Korea’s Samsung and SK Hynix — which have each dedicated investments within the U.S. — had been additionally buying and selling up after a Korean commerce envoy reportedly stated that the duo can be exempt from the 100% tariffs.
An exemption on what?
Past the query of exemptions, many different points of the potential tariffs stay unclear.
Talking on CNBC’s “Squawk Field Asia,” on Thursday, Stacy Rasgon, senior U.S. semiconductor analyst at Bernstein, famous that many of the semiconductors that enter the U.S. come inside shopper items equivalent to smartphones, PCs and automobiles.
For instance, in 2024, the U.S. imported $46.3 billion of semiconductors — solely about 1% of all U.S. imports, based on the Data Know-how and Innovation Basis.
Whereas Rasgon stated tariffs on these imports could also be manageable, broader tariffs can be more durable to cope with.
“What we do not know with [Trump’s] feedback on tariffs, is it simply uncooked semiconductors? Are there going to be tariffs on finish gadgets? Are you going to be taking a look at tariffs on elements inside finish gadgets?,” Rasgon requested.
The confusion and questions round chip tariffs had been dropped at the forefront after the U.S. Division of Commerce began a nationwide safety investigation of semiconductor know-how imports in April, simply because the sector was exempted from Trump’s “reciprocal” tariffs.
The imprecise language from the Trump administration — although not invoked within the President’s newest proclamations — might theoretically be used to use broad levies to an infinite phase of the electronics provide chain. It is also unclear to what extent semiconductor supplies and gear used to fabricate chips would fall beneath the tariffs.
Complicated provide chains
Potential tariff methods may be difficult by the intricate and interdependent nature of the semiconductor provide chain.
Rasgon gave the instance of American chip designer Qualcomm, which sends its designs to TSMC to be manufactured in Taiwan after which imported to the U.S.
“Does that imply these [chip imports] wouldn’t be tariffed, as a result of they’re made at TSMC, and TSMC is constructing within the U.S.?… I do not know. Hopefully that is how it will be,” he stated.
One other massive purchaser of semiconductors within the U.S. are cloud service suppliers like Amazon Net Providers and Google, that are important to energy Washington’s AI plans.
In line with a current report from ITIF, semiconductors contribute $7 trillion in world financial exercise yearly by underpinning a spread of downstream functions, together with AI and “huge information.”
In a possible signal of American corporations looking for to maneuver their chip provide chains into the U.S., Apple CEO Tim Cook dinner, alongside Trump on the White Home Wednesday, introduced that it is going to be provided with chips from Samsung’s manufacturing plant in Texas.
The corporate additionally introduced a further $100 billion in U.S. investments, elevating its whole funding commitments within the nation to $600 billion over the following 4 years.
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