Last month, US President Donald Trump announced a 100% tariffs on chips not built in the US. However, the answer was simple: build in the US or commit to building in the US and you’re good. But now, it looks like those plans might have been complicated.
Trump considers tariffs on chips on foreign electronics
According to an exclusive Reuters report , it seems that Trump is considering imposing tariffs on foreign electronic devices based on the number of chips in each one. This could have wide implications as it could affect a larger number of devices. Seeing as more products become “smarter” these days and rely on semiconductors , these tariffs could impact electronics such as electric toothbrushes.
While the Commerce Department did not reply immediately to requests for comment, White House spokesperson Kush Desai issued a statement. According to Desai, “America cannot be reliant on foreign imports for the semiconductor products that are essential for our national and economic security.” He adds, “The Trump administration is implementing a nuanced, multi-faceted approach to reshoring critical manufacturing back to the United States with tariffs, tax cuts, deregulation, and energy abundance.”
Also considering a 1:1 production rule
In addition to considering slapping tariffs on chips on foreign electronics, the Trump administration is also looking to implement a 1:1 production rule. This is according to an exclusive report from The Wall Street Journal .
The report says that the US government wants chipmakers to match their volume of production. This means that for every chip they import, they need to match it with domestic production. If companies fail to sustain this 1:1 ratio, they will face tariffs. It’s an interesting rule, but one that might be hard to sustain. It could also take years to ramp up.
This is because for the longest time ever, many US companies rely heavily on foreign production. While companies like TSMC are establishing plants in the US , it will take some time before it matches its output back in its home of Taiwan. All of this is part of the Trump administration’s effort to bring more production back to the US .
That being said, we all know Trump’s penchant for changing his mind, or altering his plans if there is a better deal to be had. So maybe there is a chance this could change in the future.
