With less than two weeks to go in office as US President, Donald Trump has announced high tariffs on goods imported from Mexico, Canada, China and Colombia. All under the pretext of increasing the use of domestically produced products. Now Trump has announced that he will also impose tariffs on chips, semiconductors and pharmaceuticals imported from abroad.
This is seen as another effort by him to disrupt the Chinese semiconductor industry which currently produces the majority of legacy chips used in the automotive and electronics sectors. Although his target is China, other manufacturers such as TSMC which still produces chips in Taiwan and Intel in Malaysia will also be hit by these tariffs.
According to Trump, if companies want to avoid tariffs, they need to build factories in the United States. Trump also criticized Joe Biden's CHIPS Act which provided funds to semiconductor companies to build factories in the United States. On the contrary, Trump added that the real incentive is to impose tariffs between 25% and 100% if they refuse to move manufacturing to the United States.
TSMC has already begun manufacturing some of its chips in the United States for Apple. Intel, a recipient of $7.86 billion in CHIPS Act funds, has plans to build factories in Arizona, New Mexico, Ohio, and Oregon.