Trump to Unveil New Tariffs on Semiconductors and Chips

The semiconductor industry’s rollercoaster year continues with another major development.

Upcoming Tariffs on Semiconductors

In a surprising announcement during a recent episode of CNBC’s Squawk Box, former President Donald Trump revealed that his administration is gearing up to announce tariffs on semiconductors and chips as soon as next week. While the specifics surrounding these tariffs are still unclear, the potential implications are already sending ripples through the tech community. Such tariffs could disrupt U.S. hardware and AI companies that rely heavily on semiconductor supply chains, emphasizing the complex dynamics in this bustling industry.

The U.S. Semiconductor Landscape

The U.S. semiconductor industry, despite housing more than half of the world’s semiconductor companies, has a relatively modest manufacturing presence. When the U.S. CHIPs and Science Act was enacted in 2022, it was revealed that the nation produced just 10% of the global chip supply. This stark statistic underscores the pressing need for investment and revitalization in domestic chip manufacturing.

The CHIPs Act allocated a significant $52 billion in subsidies, aimed at fostering a resurgence in American chip production. Progress has been made since then, particularly with major players like Intel and Taiwan Semiconductor Manufacturing Company (TSMC) receiving vital funding. Notably, TSMC has pledged to invest “at least” $100 billion over the next four years to bolster its chip manufacturing capacity within the United States, marking a substantial commitment to reshaping the domestic landscape.

Challenges with Ramp-Up and Construction Delays

While funding is a critical step forward, establishing semiconductor manufacturing plants is far from instantaneous. For instance, Intel has recently announced a delay in the construction of its new chip manufacturing facility in Ohio. This situation highlights the myriad of challenges associated with rapidly scaling up chip production, from logistics to workforce training, all exacerbated by the fluctuating market dynamics.

Export Controls and National Security Concerns

As the industry braces for potential tariffs, there’s also mounting anticipation regarding the administration’s decisions on AI chip export restrictions. These regulations play a pivotal role in determining which countries can access advanced semiconductors crucial for AI systems. In May, the Trump administration formally rescinded the Biden administration’s AI export rules, which had previously established a country-specific, multi-tier approach based on national security. The subsequent AI Action Plan released in July called for the imposition of chip export restrictions but lacked detailed guidance on implementation.

Industry Insights on Future Regulations

Recent reports from Semafor, citing industry insiders, suggest that there remains a debate within the Trump administration regarding the possible repeal and replacement of Biden’s AI export regulations. This ongoing dialogue reflects a broader hesitation to navigate the intricate balance between fostering national security and promoting a competitive semiconductor industry. Such regulatory decisions will play a crucial role in shaping the future landscape of technology and international trade.

For more on the semiconductor industry’s tumultuous year, we’ve compiled a regularly-updated timeline of market news since the beginning of 2025.