Trump Slaps 100% Tariff on Chips: Build in USA or Pay!
US electronics face price hikes unless chipmakers go domestic.
President Donald Trump announced a staggering 100% tariff on computer chips imported into the United States, a move that could spike prices for everything from smartphones to cars and home appliances. The bold policy, unveiled during a meeting with Apple CEO Tim Cook in the Oval Office, aims to push chipmakers to build factories on American soil.
"If you’re building in the United States, there’s no tariff," Trump declared, offering a lifeline to companies that invest in domestic production. The announcement follows a temporary exemption for electronics from earlier tariffs, signaling a shift in Trump’s strategy to bolster U.S. manufacturing.
The tariff threat comes as demand for chips surges globally, with sales up 19.6% in the year ending June, per the World Semiconductor Trade Statistics organization. A chip shortage during the COVID-19 pandemic previously drove up auto prices and fueled inflation, a pain point Trump’s policy seeks to avoid by incentivizing local production.
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Tech giants like Apple, which pledged an additional $100 billion to its $500 billion U.S. investment since Trump’s return to office, stand to benefit if they expand domestic manufacturing. Apple’s stock jumped 5% in regular trading and climbed another 3% after hours, buoyed by the tariff exemptions for U.S.-based producers. Nvidia, a leader in AI chips, and Intel also saw stock gains in extended trading, reflecting investor optimism about their domestic commitments.
However, the policy diverges sharply from the Biden administration’s approach, which leaned on the 2022 CHIPS and Science Act to provide over $50 billion in subsidies, tax credits, and incentives to boost U.S. chip production. Trump, critical of such government spending, is instead wielding tariffs to pressure companies, a tactic that risks squeezing profits and raising consumer prices for devices like iPhones, TVs, and refrigerators.
The Semiconductor Industry Association declined to comment, and Nvidia and Intel did not immediately respond to inquiries. With Trump’s tariffs looming, the tech industry faces a critical choice: invest heavily in U.S. factories or brace for higher costs that could ripple through the economy.
