Trump Slaps 100% Tariffs on Chips—Build in America, You’re Good

Trump recently announced that chip tariffs were coming. It was expected that the announcement would drop next week, but Trump wasted no time. The US President has announced a staggering 100% tariffs on chips and semiconductors imported into the country, but there’s a catch.

Trump imposes 100% chip tariffs

According to Trump, there is going to be a 100% chip tariffs for companies who are importing their semiconductors into the US. This essentially applies to the vast majority of businesses operating in the country. This is because semiconductor manufacturers, like TSMC, make most of their chips outside of the US.

But there is some good news. For starters, companies that build in the US will be able to escape these tariffs. Also, if a company has committed to building in the US, then it will be able to avoid these tariffs. As a result, both Apple and NVIDIA are exempt, at least for now.

Trump was quoted as saying, “We’re going to be putting a very large tariff on chips and semiconductors, but the good news for companies like Apple is if you’re building in the United States or have committed to build without question in the United States, there will be no charge.”

In fact, a recent report revealed that Apple has chosen Samsung to help make some of its chips stateside. However, it won’t be the main A-series chipsets powering the company’s iPhones. Instead, it will apparently apply to the CMOS camera sensors used in the iPhone. That makes sense, especially since TSMC has a more advanced process compared to Samsung.

Are price hikes still incoming?

At this point, it’s hard to say if we could still see price hikes. Remember that semiconductors only make up a part of a device like your smartphone. There are a bunch of other components that might still need to be imported. Depending on which country they’re imported from, the tariffs could vary from either very high or very low.

Also, it has been estimated that if companies like TSMC were to start making its chips stateside, it could end up costing an extra 20%. This means that unless phone makers were to absorb the price hike, they could end up passing the costs to consumers.