Trump's Chip Tariff Threat Sparks Pushback From Auto Industry To Tech

Mint

24-06-2025

Blowback to President Donald Trump's idea of tariffs on imported semiconductors is proving to be broad and deep, stretching from auto companies and boat makers to the technology industry and crypto enthusiasts, according to a review of more than 150 public comments on the proposal.
The possible levy of up to 25% has united rivals like Tesla Inc., General Motors Co. and Ford Motor Co. in voicing reservations. It's brought together industry lobbies from the Crypto Council for Innovation to the National Marine Manufacturers Association. Even Taiwan and the People's Republic of China are finding common cause, along with predictable parts of the tech sector including chipmakers and wireless providers.
The reason is that chips are now in almost everything: refrigerators and microwaves, tire pressure sensors and navigation systems, electronic bidets and sonar equipment and, of course, smartphones and computers. Tariffs threaten to snarl supply lines and jack up costs for consumers.
'There's a large mismatch between the amount of chips we use in this country in various products and the supply created here in the US,' JoAnne Feeney, a partner and portfolio manager at Advisors Capital Management, said in an interview. 'Putting a tax on those imports will simply raise the cost, and that's not a good thing for consumers.'
Case in point is the marine association, which warns the impact would be felt by more than 1,300 manufacturers who face higher expenses for essentials like propulsion technology, engines and GPS systems.
'These systems are not optional luxuries — they are fundamental to safety, function and performance,' the association said. 'Many components have no US equivalent or are only available from highly concentrated suppliers overseas.'
The boating sector's concerns were among comments from 154 stakeholders submitted to a Commerce Department review of whether to slap tariffs on chips as part of Trump's campaign to redraw global supply lines and boost domestic manufacturing. Predictable tech sources weighed in, including chipmakers Taiwan Semiconductor Manufacturing Co. and Intel Corp. But feedback also landed from a wide spectrum of sectors, along with trading partners like Japan and Brazil.
The companies, trade groups and individuals who commented on the chips investigation largely signaled support for the president's vision of deepening the US manufacturing base and expanding the American workforce. Yet most expressed concern over the potential consequences and urged making any levies that emerge as targeted as possible.
Taken together, the filings point to unease across a range of industries about the economic fallout from targeting chips. Trump has so far brushed off many of those concerns and cited plans by a range of companies to invest in the US, including Taiwan-based TSMC's decision to boost its commitment to building plants near Phoenix.
White House spokesman Kush Desai said Trump remains committed to reshoring manufacturing critical to US national security. 'While the Commerce Department completes its Section 232 investigation, the administration is expanding domestic critical mineral production, slashing regulations, and pushing pro-growth policies,' Desai said in a statement. The Commerce Department didn't respond to a request for comment.
In its submission, TSMC highlighted plans for six advanced semiconductor fabs and two packaging facilities along with a research center as part of a $165 billion investment in Arizona that's expected to create thousands of jobs. Yet the company warned import levies would make it harder to deliver those projects on schedule, while slowing US efforts to expand domestic production of chips for 5G wireless, artificial intelligence and autonomous driving.
'Additional tariffs or other restrictive measures on semiconductors could reduce the profitability of leading US companies by limiting sourcing options, driving up production costs, and reducing product demand,' TSMC's Arizona subsidiary wrote.
In its filing, Tesla urged coordination between government and industry to minimize uncertainty that could upset supply chains, citing its ties to Asia, Europe and Africa. 'These partnerships allow us to focus on increasing US dominance in advanced manufacturing,' the company wrote. 'Impacts to these inputs for which there is insufficient domestic availability will put a strain on resources during a key moment in the global artificial intelligence race.'
Chipmaker Intel cautioned that trading partners could respond with protective measures that exclude American products. Intel is seeking to reverse years of struggle by spending more than $100 billion to expand its domestic manufacturing, and the company called on the administration to spare US-made wafers as well as any chips made abroad using American technology.
A common concern aired by TSMC, Intel and others in the semiconductor industry centered on the risk that chipmaking equipment produced by foreign suppliers like ASML Holding NV would get hit with import taxes. A single extreme ultraviolet lithography machine from Netherlands-based ASML, the world's sole provider of the most advanced chipmaking gear, can cost nearly $400 million. Adding tariffs would significantly boost the cost of equipping new US facilities.
ASML submitted feedback to the Commerce Department — but its filing was marked 'business confidential' and unavailable for public review. In its comments, Intel urged exempting such machines, noting that 'the primary cost driver for semiconductor fabs, accounting for two-thirds of total construction expenses, is equipment and machinery.'
Replacing semiconductors produced abroad with domestic output would be very difficult, Feeney said.
'It takes years to create the industrial infrastructure to make creating a semiconductor fabrication facility even possible,' she said. 'At a time we're trying to build up an AI infrastructure of data centers, the last thing you want to do is put a substantial tariff on the most important input into those data centers.'
Major US trading partners, already stung by Trump's so-called reciprocal tariffs, objected to the idea of targeting chips, after seeing the auto sector along with steel and aluminum imports hit with levies. Taiwan, which produces nearly 90% of the world's most advanced semiconductors, highlighted the complementary role of TSMC foundries that churn out wafers for leading American chip designers Nvidia Corp. and Advanced Micro Devices Inc.
Tariffs on semiconductors or related products from the island 'would severely impair Taiwan's ability to meet the demands of the US semiconductor industry in a timely manner,' the Taiwanese government said in its filing. 'This would drive up costs for US companies, raise end-product prices, reduce profitability and revenue, and ultimately weaken the capacity of US firms to invest in R&D and innovation.'
With assistance from Catherine Lucey.
This article was generated from an automated news agency feed without modifications to text.