Trump threatens 100 percent tariff on computer chips with a gigantic loophole
In the same live news conference where Apple announced a new $100 billion US manufacturing plan and presented Trump with a 24-karat gold and glass statue, the president explained that Apple had already done enough to escape his upcoming import taxes on chips:
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 in the United States, there will be no charge.
And, it's possible that other companies already have, or easily will, meet Trump's bar for participation. Trump told the in-person and online audience that even a commitment to invest in US manufacturing may be enough to escape the tariffs. '[If you're building in the United States of America, there's no charge, even though you're building and not producing yet,' he said. 'If you've made a commitment to build or you're in the process of building, as many are, there is no tariff, OK?'
Here's our transcript of Trump's full remarks on the topic:
We'll be putting a tariff on of approximately 100 percent, on chips and semiconductors. But if you're building in the United States of America, there's no charge, even though you're building and not producing yet, in terms of the big numbers of jobs and all of the things that you're building. If you're building there will be no charge […] 100 percent tariff on all chips and semiconductors coming into the United States, but if you've made a commitment to build or you're in the process of building, as many are, there is no tariff, OK? If for some reason you say you're building and you don't build then we go back and add it up, it accumulates and we charge you at a later date. You have to pay, and that's a guarantee.'
It's hard to think which companies a new chip tariff would apply to, as most major chipmakers already have at least some small commitment to US manufacturing. Taiwan's TSMC, which accounts for the vast majority of leading-edge chips and drew Trump's ire as a result, announced a $100 billion investment back in March.
Or, perhaps, is Trump threatening tariffs on the makers of products that use chips rather than the makers of chips themselves? Apple isn't exactly a chipmaker, after all; it does design its own chips but relies on companies like TSMC to actually make them.
It's also possible that Trump won't enact this particular tariff at all. After previously threatening tariffs on chips in January and February, the Trump administration excluded them from tariffs come April. Trump did not say when new chip tariffs might happen. Trump's new general reciprocal tariffs on dozens of countries go into effect tomorrow, August 7th.
In July, AMD CEO Lisa Su revealed that TSMC's US-made chips would cost it an extra 5 to 20 percent more than ones made overseas.
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