Key Points
- Trump proposes up to 100% tariffs on Taiwan-made semiconductors to encourage U.S. production.
- The plan targets U.S. tech companies such as Apple, AMD, and Nvidia, which rely on TSMC for chip manufacturing.
- Building advanced fabs in the U.S. takes 3–4 years and costs tens of billions of dollars. Short-term tariffs could raise prices for PCs, servers, and smartphones.
- Trump criticized government grants like the CHIPS Act, arguing companies should fund fabs independently.
U.S. President Donald Trump has announced plans to impose significant tariffs on Taiwan-made semiconductors, aiming to incentivize companies to relocate production to the United States. At a House Republicans conference, Trump criticized U.S. tech giants like Apple, AMD, Broadcom, Nvidia, and Qualcomm for relying on Taiwan Semiconductor Manufacturing Company (TSMC) for chip production. He argued that 25%, 50%, or even 100% tariffs would compel these companies to invest in domestic manufacturing facilities.
Trump’s proposal seeks to reduce U.S. reliance on Taiwan, which dominates global semiconductor production. However, building advanced semiconductor fabrication plants (fabs) in the U.S. is lengthy and costly, taking three to four years and requiring tens of billions of dollars. Even if TSMC were to start constructing a state-of-the-art fab in the U.S. today, it would not be operational until 2028–2029. In the short term, tariffs could increase prices for PCs, servers, and smartphones, potentially harming the U.S. economy.
The former president also dismissed government grants like the CHIPS Act, which provides funding to boost domestic chip production, as unnecessary. He argued that companies should use their resources to build fabs rather than rely on public funding. However, the high costs and long timelines associated with semiconductor manufacturing make such investments challenging without government support.
Trump’s tariff plan could leverage companies like Apple, AMD, Nvidia, and TSMC to expand their U.S. operations. TSMC has one small fab in the U.S. and is building two additional facilities. Still, chips produced in the U.S. are more expensive than those made in Taiwan, raising questions about the long-term viability of this strategy.
The proposed tariffs mark a significant shift in U.S. trade policy, emphasizing domestic production and reducing dependence on foreign manufacturing. However, the effectiveness of this approach remains uncertain. It could lead to immediate economic challenges, while the benefits of increased domestic production may take years to materialize.
