Trump is back at it talking about tariffs, and the plan is to charge extra on all chips that are not manufactured within national territory. He has been threatening it for months but now it is serious, there will be tariff hikes for all semiconductor makers that do not produce in our country. If companies want to keep selling without penalties, they have no choice but to make a move and bring their factories back home.
With this measure, Trump completely distances himself from Biden’s plan, which was about giving subsidies so companies would manufacture inside the country. Not him. Trump prefers to put pressure through economic punishment. And his message could not be clearer.
“In the very near future we are going to impose tariffs on foreign production of computer chips, semiconductors and pharmaceutical products to bring the manufacturing of these essential goods back to the U.S. […] They went to Taiwan; now we want them back. We do not want to give them billions of dollars in Biden’s ridiculous program. They already have billions of dollars”.
“The chips went to Taiwan… and now we want them back”
He had said the phrase more than once before, but now it makes more sense than ever. In Asia (especially in Taiwan and South Korea) most of the chips we use daily are manufactured. And our president does not like that at all. That is why, although he has not said how much the tariff will be, he has warned that it will be “substantial”.
Companies already building plants in the U.S. or those planning to return will be spared. The rest will have to pay.
And yes, this is also about Apple
The president had no problem saying out loud that “Tim Cook would be in very good shape if Apple manufactured chips here”. Yes, Cook was right there, and no, he does not make his chips in the country. So yes, this is about Apple, but also Nvidia, Intel, Qualcomm and company. Either they adapt, or their products will get more expensive.
If they ultimately have to move production to the United States, that means billions in investments, redesigning supply chains and, of course, raising prices…
Why do chips matter so much?
Because nothing works without them. They are in phones, computers, cars, artificial intelligence… everything. And controlling them means having power, that is what Trump wants, more power. That is why the U.S. wants to make its own and not depend on anyone. And that is why China is also fighting its own battles.
The problem is that making chips is neither cheap nor fast, moving all production to the U.S. could be extremely costly for companies, at least in the short term. So in the meantime, technology prices could skyrocket. All this in the middle of global inflation and with consumers already quite fed up…
From subsidy to punishment
Biden bet on offering $52 billion in subsidies through the CHIPS Act. Trump, on the other hand, is going the opposite way: if you do not manufacture here, you get a tariff. Two opposite ways of seeking the same goal: that the U.S. regain control of a strategic sector.
A move that could change everything
Tariffs on chips made outside the U.S. mark a before and after. It is not just an economic decision, it is a slam on the table that could completely reshape how, where and at what price the technology we use daily is manufactured.
The message has been sent. And now it is up to the tech companies to move. Because if they do not, what comes next is higher prices, tensions with Asia and an increasingly fractured market.