In another tidal shift, Trump announced the imposition of tariffs on semiconductors in the coming weeks.  A move dubbed ‘Made in America Semiconductors’ aims to relocate semiconductor fabs in the US to decrease its dependence on Chinese imports. Meanwhile, it will make America self-reliant in smartphones, computers, and other electronic manufacturing. Currently, America’s big tech companies have their product manufacturing sites in China, Taiwan, South Korea, and India. 

Trump affirmed this motive by saying 

“We wanted to uncomplicate it from a lot of other companies, because we want to make our chips and semiconductors and other things in our country,” 

National Security Tariff Investigation 

In the contemporary world order, economic security is the backbone of national security. Countries also strengthen their economies to expand political clout. As Trump’s tariff policy complies with America First, he announced that initiate a national security tariff investigation. In this investigation, the supply chain of semiconductors will also be included. Trump said on this 

“We are taking a look at Semiconductors and the WHOLE ELECTRONICS SUPPLY CHAIN.”

Trump further added to this notion of national security probe that no permanent relief will be given to China, the major stakeholder of the semiconductor manufacturing sector. Trump said 

“NOBODY is getting ‘off the hook’ for the unfair Trade Balances, and Non-Monetary Tariff Barriers, that other Countries have used against us,”

Trump Exempted Tariffs on Smartphones and Electronics 

In an unexpected yet expected move, Trump exempted tariffs on smartphones, computers, and some electronic devices. This move brought some stability to the tech market that had been jolted by Liberation Day Tariffs. The industry classified in hardware, software, and semiconductors is still facing aftershocks of the heavy to and fro reciprocal tariff war between China and the US. This move was expected due to America’s high dependence on the tech industry, which has a complex supply chain in Southeast Asia. 

Semiconductors Hit ‘Semi’ by Trump Tariffs 

Annex 2 of Trump’s executive order lists numerous exemptions that have been given to semiconductors and integrated circuits in their raw form. It gives partial relief to these products. The real issue arises with the end products like smartphones, tablets, computers, and networking equipment that incorporate these semiconductors. These final tech gadgets face significant price hikes due to tariffs, thereby affecting sales volumes and profit margins. 

As Trump exempted these electric gadgets from tariffs for some time, the tech giant may look for a new strategy regarding semiconductor fabs. 

Notably, Taiwan Semiconductor Manufacturing Company (TSMC) is already working on developing semiconductor chip fabs in the USA, as the company is a major supplier of Apple.