Trump threatens 100% tariffs on chips and semiconductors unless they are made in the U.S.

President Donald Trump threatened Wednesday to impose 100% tariffs on imported semiconductors and chips, although he will exclude companies that "are manufacturing in the United States" from the list.

This new, and significantly increased, sector-specific pledge shows that Trump is intensifying his efforts to pressure companies to develop their manufacturing within the United States and bring the supply chain back.

In his Oval Office appearance alongside Apple CEO Tim Cook announcing a $100 billion increase in the Cupertino firm's investment in U.S. production, the president did not specify the plan for these new taxes, such as how much a company must manufacture domestically to qualify for the exemption.

"We're going to impose massive tariffs on chips and semiconductors, but the good news is that companies like Apple, if they manufacture in the United States or have committed to doing so, won't face any charges," he emphasized. He didn't elaborate further.

His announcement puts pressure on companies, especially those in the technology sector, which generally depend on Asia for these crucial components, potentially leading to more of the eye-catching investment deals Trump has pushed during his second term.

The plan is expected to be unveiled next week and would, in principle, apply to all countries and companies, with exemptions for those that produce or have committed to investing in the U.S. He warned that companies that fail to comply with these commitments will be forced to pay fines.

If Trump keeps his promise, it will be a major relief for companies that anticipated the imposition of tariffs on these components. Nvidia, Taiwan Semiconductor Manufacturing Company (TMSC), Micron, GlobalFoundries, and other firms will benefit by avoiding these high tariffs, as they have guaranteed investments in the U.S. in recent months.

But this initiative, which raises the prospect of higher prices for electronics, cars, appliances, and other products that rely on the processors that power the digital age, also raises concerns among national security experts. According to The New York Times, they believe the exemptions reduce the likelihood that the United States will reduce its dependence on chips manufactured in Taiwan, an island under Chinese scrutiny and a potential invasion.

Given this strategic potential, both the Biden and Trump administrations are seeking to relocate these companies within the United States. Their approach, however, is opposite. Biden signed contracts in 2024 to provide subsidies and incentivize companies to locate in the United States. Trump uses the coercive means of tariffs and the threat of sanctions.

Apple has already earned the prize of not being penalized with these taxes.