Trump Announces 100% Tariff on Imported Semiconductors
However, companies such as TSMC and Apple, due to their investments in the United States, benefit from exemptions. Yet, the global supply chain still faces the challenge of reorganization.
(Background: Trump angrily criticized India’s purchase of Russian oil, threatening to “significantly raise tariffs”! India: Will take all measures to defend energy security)
(Additional context: Trump’s tariffs leave no room for negotiation! U.S. Trade Representative Katherine Tai: It has been confirmed that a reduction is impossible.)
On the 7th, U.S. President Trump announced a significant policy in the Oval Office, declaring a 100% tariff on all imported semiconductor products unless companies have established production in the United States; otherwise, they will be shut out. This “America First” strategy immediately ignited global attention in the tech and financial markets. Since TSMC has already set up a factory in Arizona, it would logically be excluded from Trump’s exemption list.
Trump stated:
“We will impose approximately 100% tariffs on chips and semiconductors. However, if you build a factory in the U.S., you will not be taxed. Even if you have not yet started mass production, as long as you are in the construction phase and creating a substantial number of jobs, you will not be taxed.”
TSMC: Early Planning Results in Zero Tariff
In recent years, TSMC has invested $165 billion in Arizona, planning to build six wafer fabs, two advanced packaging plants, and one R&D center. The first 4-nanometer factory began production at the end of last year, and the second 3-nanometer factory has also been completed, with plans to introduce 2-nanometer and A16 processes in the future.
Following the announcement, TSMC’s ADR rebounded sharply after hours, continuing to rise after the market opened today (7th), increasing by 4.89% to $1180 before the deadline, highlighting the market’s belief that TSMC can consolidate its competitiveness under exempt status.
However, establishing factories in the U.S. still faces significant challenges such as high labor, utilities, and cultural costs. Balancing Taiwan’s R&D core with U.S. production capacity will test TSMC’s long-term strategy. Furthermore, details regarding the specifics of the tariffs on Taiwanese semiconductors under Section 232 have yet to be released. Will the tariffs apply to chips or end devices? How will the country of origin for product exports be defined? If the final assembly country is not the U.S., will it have an impact? After Trump’s remarks, it remains to be seen how the regulations will be defined in written form.
Extended Reading: Taiwan’s Collective Anxiety over Semiconductor Tariffs: What is the U.S. “Section 232”?
Core of Trump’s Policy: Forcing Capacity to Return
Trump emphasized that high tariffs are the fastest means to bring manufacturing back to the U.S., aiming to pull the entire semiconductor industry chain back to domestic soil, increasing employment and supply chain resilience. During the press conference, Trump also announced a commitment from Apple CEO Tim Cook for an additional $100 billion investment, bringing Apple’s total investment in the U.S. to $600 billion.
Trump stated that as long as Apple has committed to moving its phone production line back to the U.S., even if it is still under construction and has not yet begun production, it will not be subject to the 100% semiconductor tariff. This means that Apple has also obtained exemption from semiconductor taxes through its substantial investment commitment.
Long-term Impact: Trade Measures Driving Industrial Restructuring
On a deeper level, Trump’s tariff measures are not merely a trade friction but rather an economic tool to achieve geopolitical goals: promoting the return of manufacturing. However, this move could raise operational costs, ultimately passing on to consumers and increasing inflationary pressures. Therefore, the Trump administration must be cautious not to create unintended consequences.
In a broader sense, multinational companies’ future investment decisions will inevitably become more complex, needing to simultaneously weigh production efficiency, subsidy programs, and policy risks. While TSMC is among the first beneficiaries, maintaining technological leadership and cost advantages amidst accelerated competition among nations will require continuous adjustments.
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