Trump eyes 100% chips tariff, but zero percent for U.S. investors like Apple

Japan Times

9 hours ago

U.S. President Donald Trump said he would impose a 100% tariff on semiconductor imports, though would exempt companies moving production back to the United States, as he and Apple CEO Tim Cook announced a fresh $100 billion investment plan from the Oval Office.
"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, committed to build in the United States, there will be no charge,' Trump told reporters.
"So in other words, we'll be putting a tariff of approximately 100% on chips and semiconductors. But if you're building in the United States of America, there's no charge,' Trump said. "Even though you're building and you're not producing yet, in terms of the big numbers of jobs and all of things building, if you're building, there will be no charge.'
Trump so far has exempted electronics including smartphones, computers and monitors from his nation-specific reciprocal tariffs, which are set to increase for many trading partners Thursday morning, while indicating those products would be hit as part of a separate forthcoming action on imports that include semiconductors.
An exemption from those levies amounts to a major victory for Apple and Cook, who were bracing for substantial tariffs that could ratchet up costs for the company's signature phones and computers.
Apple's $100 billion U.S. investment will include a new manufacturing program designed to bring more of Apple's production to the U.S.. The company's American Manufacturing Program partners include glassmaker Corning, Applied Materials, Texas Instruments and others, the company said.
Corning will dedicate an entire factory in Kentucky to Apple glass production, increasing that company's workforce in the state by 50%, the iPhone maker said. Corning was already a supplier to Apple, making glass for the very first iPhone at the same factory.
Trump reaches to shake Cook's hand on the day of the announcement of the $100 billion investment by Apple in U.S. manufacturing, in the White House on Wednesday. |
REUTERS
Apple had previously pledged to spend $500 billion in the U.S. over the next four years, a slight acceleration over its prior investments and previously announced plans, adding about $39 billion in spending and an additional 1,000 jobs annually. The announcement will bring Apple's cumulative commitment to $600 billion.
The previously planned $500 billion is said to include work on a new server manufacturing facility in Houston, a supplier academy in Michigan and additional spending with its existing suppliers in the country.
Uncertain impact
But implementation of Trump's decision on tariffs — which he said he had not informed Cook of before the event — could have a massive impact on the tech industry.
If Trump's statements mean that all products from companies that have committed to building plants or already own factories located in the U.S. are exempt, then many of the industry's largest firms won't be affected.
Several companies including Taiwan Semiconductor Manufacturing Co., Samsung Electronics, Texas Instruments, Micron Technology and GlobalFoundries have already made public promises — often in coordination with the White House — to extend their production networks, promising outlays of tens of billions of dollars.
Intel, whose ambitious building plans in Ohio is being slowed because of its losses, still has operational factories in at least three U.S. states: Oregon, New Mexico and Arizona.
But many chipmakers don't actually own factories, preferring to outsource that function mainly to TSMC and, to a lesser extent, Samsung. While companies such as Nvidia — whose CEO met earlier Wednesday with Trump — and Advanced Micro Devices have touted their commitment to sourcing chips from TSMC's new plants near Phoenix, there still isn't enough advanced production outside of East Asia, let alone in the U.S., to meet their needs.
Nvidia, like Apple, has committed to spending large sums in the U.S. and localizing procurement. But the company is still part of a complex supply chain that spans the globe and can't easily be uprooted and replicated in the U.S..
Tariff push
The increased pledge comes as Trump escalates a tariff push that's set to raise costs for Apple throughout its international supply chains.
Trump plans to whack India — a key production market for Apple — with 50% tariffs, the first half of which takes effect just after midnight alongside a raft of other country-specific levies designed to reduce trade imbalances. The other half, to penalize India for buying Russian energy, will take effect later this month.
Cook reacts while Trump speaks, as they present Apple's announcement of the U.S. investment while U.S. Treasury Secretary Scott Bessent (left) and Commerce Secretary Howard Lutnick look on in the White House on Wednesday. |
REUTERS
The U.S. president has said he could unveil separate levies on all products containing semiconductor chips as soon as next week.
Cook, who attended Trump's inauguration and donated to his inaugural committee, has pushed for tariff exemptions for his company's iPhones. Most iPhones sold in the U.S. come from India, while the bulk of other products, including Apple Watches, iPads and MacBooks, are manufactured in Vietnam, which was hit with a 20% tariff.
While details of those tariffs — and how firms would qualify for exemptions — have yet to be released, Trump singled out Cook's Apple as an example of how to avoid the increased levies.
Cook's investment echoes dozens of pledges from companies since Trump won the 2024 presidential election, with CEOs flying to his Mar-a-Lago resort in Florida, and then to the White House once he was sworn in, to court the new administration and announce hundreds of billions of dollars worth of new deals.
Many of these investments were already in the works prior to the November election, or were on par with previous investment trends. Economists have also questioned whether all of the pledged spending, and associated job opportunities, will come to fruition.
Apple's promised investments, while substantial, fall short of the full shift to U.S.-based production that Trump and top White House officials have envisioned and encouraged. Earlier this year, he threatened to impose a tariff of at least 25% on Apple if it didn't move manufacturing of the iPhone to the U.S., a day after he met with Cook at the White House.
Cook told Trump that final iPhone assembly "will be elsewhere for a while,' though highlighted that several components are being made in the U.S.
Trump, seemingly satisfied, praised the Apple leader's plans.
"Look, he's not making this kind of an investment anywhere in the world, not even close,' Trump said of Cook. "He's coming back. I mean, Apple's coming back to America.'