The United States has announced sweeping new tariffs on all semiconductor chips imported into the country, setting a rate as high as 100%. This bold move forms part of former President Donald Trump’s “America First” economic strategy and directly calls out Taiwan’s significant involvement in the global semiconductor supply chain.
Trump unveiled the tariffs on 31 July, stating the duties would apply to “all chips and semiconductors entering the US,” unless companies commit to manufacturing within American soil. This incentive aims to encourage semiconductor firms to relocate production back to the US.
Taiwan in the Crosshairs
Trump specifically criticised Taiwan during his remarks, saying, “Everyone drained Intel before moving elsewhere, especially Taiwan.” This pointed statement highlights US concerns over the shifting of chip manufacturing overseas, which has impacted domestic companies like Intel.
Moreover, Trump warned companies failing to fulfil their promises to build factories in the US that tariffs would be retroactively enforced. This approach underscores Washington’s determination to bring critical tech manufacturing back home.
Impact on the Global Semiconductor Industry
Industry watchers expect the 100% tariff to send significant ripples through the global semiconductor ecosystem, heavily reliant on Asian producers, including Taiwan’s giant Taiwan Semiconductor Manufacturing Company (TSMC).
While Trump mentioned that TSMC’s US investment was downgraded from a previously claimed US$300 billion to US$200 billion, this figure remains above TSMC’s own official estimate of US$165 billion. Despite these discrepancies, Trump remains confident that chip manufacturers will ultimately commit to US-based production.
Wider Economic and Trade Repercussions
This tariff announcement follows a series of trade disputes and signals intensified US efforts to secure semiconductor supply chains domestically, a critical move amid growing geopolitical tensions.
Taiwan, as a leading semiconductor hub, faces potential challenges if these tariffs disrupt trade flows or increase production costs. Industry experts warn this could reshape regional supply dynamics and affect global technology markets.