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In August, President Trump threatened to impose tariffs as high as 300% on foreign-made chips, but the plan now appears to be on the back burner.
US officials have been privately telling those in government and private industry that semiconductor-focused tariffs are unlikely to happen anytime soon, according to Reuters, citing unnamed sources.
One reason is that the White House wants to avoid angering the Chinese government after the Trump administration reached a trade deal with Beijing, which includes de-escalating US tariffs on Chinese exports. That said, Reuters also reports the White House could reverse course and impose the “triple-digit tariffs” at any time.
Even so, Taiwan—home to contract chip giant TSMC—seems confident that it won’t have to face the staggering tariffs. “They understand that punishing Taiwan is not in their interests,” a government minister for Taiwan’s science and technology council told The Financial Times.
Trump previously indicated the tariffs, which could range from 100% to 300%, would arrive in late August or September. However, the White House has since remained quiet on the subject as the Supreme Court reviews whether Trump’s existing "reciprocal" tariffs and those imposed this year are legal. If the court rules against the Trump administration, the White House may face the complex task of reimbursing numerous businesses for their previous tariff payments.
(That said, the White House has been planning to impose chip-related tariffs using a different legal authority known as Section 232, which the Supreme Court is not evaluating.)
The president's proposed tariffs on foreign-made chips also had a major exemption. “If you’re building in the United States of America, there’s no charge,” he said. As a result, the leading companies—including Apple, Nvidia, TSMC, and Samsung—are expected to be spared following major manufacturing investments in the US. But the exact details of Trump’s exemption were never made clear.