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President Trump’s tariffs on foreign chips will reach a whopping 100%, according to remarks he made on Wednesday.
“We’ll be putting a tariff of approximately 100% on chips and semiconductors,” Trump said in the Oval Office. “But if you’re building in the United States of America, there’s no charge."
Trump mentioned the tariff rate after announcing a new $100 billion investment from Apple to develop more manufacturing in the US. In February, Apple pledged to invest $500 billion over the next four years to create new manufacturing jobs in the country. It's now expanding that to $600 billion, which "includes new and expanded work with 10 companies across America," CEO Tim Cook said in a statement.
The 100% tariff rate would be staggering, and risks raising costs for tech companies and consumers, depending on how the duties are implemented. It's also significantly higher than the 25% rate that Trump initially floated in February.
In his remarks, Trump indicated the high tariff rate is necessary to push the tech industry to build products domestically, when most of the world’s electronics manufacturing happens in Asia. "100% tariff on all chips and semiconductors coming into the United States. But if you’ve made a commitment to build or are in the process of building, as many of you are, there’s no tariff," he reiterated today.
This suggests companies including Apple, Nvidia and TSMC will be spared from the chip tariffs after announcing major manufacturing-related investments in the US.
Currently, Apple, AMD, Nvidia, Qualcomm, and even Intel source chips from TSMC, which manufactures the bulk of its processors in Taiwan. But on Wednesday, Trump said: “Companies like Apple, they’re coming home. They’re all coming home."
Apple’s $600 billion investment stops short of building the iPhone in the US, a goal that Trump has mentioned before. But in the announcement, Apple said it’s partnering with Corning to build “the world’s largest and most advanced smartphone glass production line” in Kentucky.
“The expansion means that soon, every iPhone and Apple Watch sold around the world will be built with Kentucky-made cover glass,” Apple added. “The two companies will also open a new Apple-Corning Innovation Center in Kentucky.”
When asked by reporters about bringing iPhone manufacturing to the US, Cook said "there's a ton" being made in the US. He acknowledged, however that "final assembly...will be elsewhere for awhile."
Meanwhile, TSMC plans on building six fabs in Arizona, although the company has warned the Trump administration that tariffs could derail its investment.
On Monday, Trump told CNBC his chip-focused tariffs could arrive as soon as next week. In the past, the White House has also indicated the semiconductor tariffs will encompass a wide range of electronics, including computers, that contain foreign-made processors.