The Trump administration is now planning to launch “aggressive” chip tariffs this week, and they could potentially have devastating consequences for the IT industry.
President Trump Said a “100% Chip Tariff” On Taiwan Is Justified; Could Prove To Be “Fatal” For The IT Industry
The new US government has made domestic chip production a massive priority, and President Trump has often called for the implementation of chip tariffs in order to force companies like TSMC to bring production into the country. Interestingly, the US Commerce Department recently launched an investigation to determine how big of an impact chip tariffs would have on the industry, and they have asked for opinions from local organizations. However, in the notice for public comments released by the Commerce Department, only ten responses have been recorded, which might imply that there’s no opposition.
We are anticipating chip tariffs to be announced by Wednesday, given that the administration disclosed that they will include semiconductors in a separate policy. As to what kind of “percentages” we could expect from the government, President Trump has said in the past that tariffs on Taiwan as high as 100% are a justified figure, claiming that the nation “stole US tech”. And, given that the Commerce Department hasn’t seen opposition in its public comment yet, which could give President Trump leverage.
The Commerce Department is also reviewing the feasibility of enhancing domestic chip production to the point where it can meet the “demand” of the market, so it is safe to say that the tariff implementation will come with an announcement for the domestic chip industry, potentially benefiting the likes of Intel and TSMC. The Taiwan chip giant has already announced for $100+ billion in investments into the nation, and this is all a part of the plan to escape Trump tariffs, which are set to drop into the industry sooner than you think.
The deadline for public comments is set for May 7, and with that, the comment count makes it clear that we’ll see the tariff coming in soon. We saw something similar happening with timber tariffs as well, where the Commerce Department saw over 300 responses, and the administration then decided to re-evaulate the policy. It seems like the comments in these forms are seen as “the majority of the public vote”, so it is necessary that consumer/industry sentiment is reflected in them.
