Trump Announces Plans for Semiconductor and Chip Tariffs

Semiconductor Industry Faces New Uncertainty with Potential Tariffs

The semiconductor sector is experiencing continued volatility, marked by a significant new development.

During an appearance on CNBC’s Squawk Box, former President Donald Trump indicated that his administration is preparing to unveil tariffs on semiconductors and chips within the coming week. The precise details concerning these potential tariffs, however, have not yet been disclosed.

Potential Impact on U.S. Companies

The imposition of such tariffs could significantly disrupt operations for U.S.-based hardware and AI companies.

Prior to the enactment of the U.S. CHIPs and Science Act in 2022 – which allocated $52 billion in subsidies to stimulate domestic chip production – the United States accounted for approximately 10% of global chip manufacturing.

Despite this relatively small domestic manufacturing capacity, over half of the world’s semiconductor companies maintain their headquarters within the U.S.

Progress and Challenges in Domestic Manufacturing

Since the CHIPs Act’s passage, some advancements have been realized in bolstering domestic chip production. Both Intel and Taiwan Semiconductor Manufacturing Company (TSMC) have been recipients of funding through the Act.

Furthermore, TSMC has pledged to invest “at least” $100 billion over the next four years in establishing chip manufacturing facilities within the United States.

However, the establishment of these facilities is a time-consuming process. Intel recently announced a further delay in the construction of its Ohio chip manufacturing plant, underscoring the difficulties inherent in rapidly expanding production capabilities.

AI Chip Export Restrictions

This tariff announcement coincides with ongoing industry anticipation regarding the administration’s forthcoming decision on restrictions concerning the export of AI chips. These regulations govern which nations are permitted to procure advanced semiconductors utilized in AI systems.

The Trump administration officially revoked the Biden administration’s AI chip export rules in May. These previous rules had implemented a country-specific, tiered system for restricting chip exports based on national security considerations.

Subsequently, the Trump administration released its AI Action Plan in July, emphasizing the necessity of implementing chip export restrictions for the U.S., though lacking specific details regarding their implementation.

Current Debate on Export Rules

Reports from Semafor, citing sources within the industry, suggest that the Trump administration is currently deliberating whether to proceed with its plan to rescind and replace Biden’s AI export rules.

For a comprehensive overview of the semiconductor industry’s dynamic year, a regularly updated timeline of market news since the beginning of 2025 has been compiled.