BUSINESS – U.S. President Donald Trump revealed a sweeping policy imposing a 100% tariff on semiconductors imported into the United States. Cited from Al-Jazeera, the announcement, made at the White House on August 6, 2025, delivered a stark message: foreign-made chips will face new duties unless the producing companies have invested in—or committed to investing in—manufacturing facilities on American soil. As Trump stated, “We’ll be putting a tariff of approximately 100 percent on chips and semiconductors, but if you’re building in the United States of America, there’s no charge”.
Major global chipmakers that have already established U.S. production sites—like TSMC with its Arizona plant—are expected to receive exemptions. Apple, for example, avoided penalties after announcing a further $100 billion investment in U.S. operations, although critics point out that much of its manufacturing network remains abroad.
The semiconductor industry and manufacturing sectors reacted swiftly. Companies such as Intel, Nvidia, and GlobalFoundries, with strong U.S. presence or plans, saw gains in their stock prices. The Philadelphia Semiconductor Index rose 1.5%, and the broader tech market rallied with the Nasdaq-100 up about 1.3%, buoyed by confidence in these exemptions.
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Nonetheless, the new policy has unsettled smaller firms and nations whose chip production doesn’t involve U.S.-based investment. Semiconductor Industry Association officials, along with companies like Germany’s Infineon, voiced concerns over ambiguous exemption terms and potential cost increases for American-built products like automobiles and electronics. Countries such as the Philippines and Malaysia warned of economic disruption tied to lost access to U.S. markets.
Trump’s decision follows a broader trend: earlier tariffs on steel, aluminum, copper, and vehicles, now extended to the chip sector. This strategy, backed by an investigation under Section 232 of the Trade Expansion Act, signals Washington’s aggressive push to reclaim semiconductor manufacturing dominance. In tandem with these developments, the European Union secured a separate understanding with the U.S., capping its chip export tariff at 15%, a much softer rate compared to the sweeping 100% proposal.
Together, these moves mark a significant realignment in global trade: high tariffs for imports, generous exemptions for domestic investment, and an unmistakable nudge for foreign firms to manufacture in America. The implications span economic retaliation, political maneuvering, and fundamental shifts in global electronics supply chains.
