In a bold move to encourage domestic manufacturing, former President Donald Trump announced on Wednesday afternoon a significant tariff of approximately 100% on chips and semiconductors. This announcement came as part of an Oval Office event, in which President Trump hosted Apple CEO Tim Cook. The former president emphasized that the tariff is part of a broader strategy to pressure companies into building their products within the United States.
As President, Trump championed the need for chips and semiconductors. As autonomous systems have progressed, these components have grown to be mission critical across industries. He termed the new tariff “very large.” It means that unless companies are serious about building in the U.S. the IRA will have a transformative impact on them.
The former president stated, “So in other words, we’ll be putting a tariff on of approximately 100% on chips and semiconductors. If you’re building in the United States of America, there’s no charge.” This new condition is intended to motivate companies, particularly tech behemoths such as Apple, to create or grow their manufacturing base here in the United States.
The announcement fits with Trump’s nearly two-decade long crusade to re-energize American manufacturing and lessen the country’s reliance on foreign supply chains. By imposing such tariffs, he aims to create a more favorable environment for U.S.-based production, which he believes will ultimately benefit the economy.
In fact, during the 2016 campaign, Trump suggested that these duties could be imposed as early as next week. This announcement raised fears among industry stakeholders that it would lead to increased costs and/or supply chain impacts. The semiconductor industry continues to bear the massive impacts of global shortages. This new tariff has the potential to exacerbate those issues significantly.
Throughout the event with Apple CEO Tim Cook, Trump doubled down on his promise to reward companies that bring manufacturing back to the U.S. He noted that companies that repatriate jobs to the U.S. will be able to avoid tariffs. This action greatly strengthens the national economy.
“But the good news for companies like Apple is if you’re building in the United States or have committed to build, without question, committed to build in the United States, there will be no charge.” – Donald Trump
The implementation of these sector-specific tariffs represents a landmark shift in U.S. trade policy. This latest move further reinforces Trump’s continued focus on economic nationalism. Companies couldn’t have been more surprised at this announcement. Just as many will have to reconsider their manufacturing plans in order to react to the complex new tariff landscape they face.