President Donald Trump on Wednesday declared plans to impose a 100% tariff on imported semiconductors, a move that could reshape the global tech supply chain while providing exemptions for companies manufacturing in the United States.
"We'll be putting a tariff on of approximately 100% on chips and semiconductors," Trump said during a meeting in the Oval Office with Apple CEO Tim Cook. "But if you're building in the United States of America, there's no charge."
The announcement coincided with Apple's commitment to invest an additional $100 billion in U.S. manufacturing over the next four years. That builds on the iPhone maker's earlier $500 billion pledge, bringing its total U.S. investment to $600 billion. "If, for some reason, you say you're building and you don't build, then we go back and we add it up, it accumulates, and we charge you at a later date, you have to pay, and that's a guarantee," Trump added.
While not yet a formal rule, the statement sent shockwaves through global markets. Industry leaders and government officials scrambled to assess the fallout, with many looking to clarify whether their countries' firms would be hit by the new levy. Trump's administration is expected to formalize the measure next week, coinciding with broader tariffs of 10% to 50% on a range of foreign goods.
South Korea's top trade envoy, Yeo Han-koo, confirmed that Samsung Electronics and SK Hynix would not be subject to the new tariff under an existing U.S.-Korea trade agreement. Likewise, Taiwan's National Development Council Minister Liu Chin-ching said Taiwan Semiconductor Manufacturing Co. (TSMC) would be exempt, citing its existing U.S. operations and partnerships with domestic firms such as Nvidia.
"Large, cash-rich companies that can afford to build in America will be the ones to benefit the most. It's survival of the biggest," said Brian Jacobsen, chief economist at Annex Wealth Management.
Dan Lachica, president of the Semiconductor & Electronics Industries in the Philippines Foundation, said the new policy would be "devastating" for his country, where semiconductors account for roughly 70% of exports. Malaysia's trade minister, Tengku Zafrul Aziz, warned that his country "will risk losing a major market in the United States if its products become less competitive as a result of the imposition of these tariffs."
The European Union secured a flat 15% tariff rate for most exports, including chips, while Japan reported it would not face worse rates than its peers. However, firms in China, particularly those linked to SMIC and Huawei, are unlikely to receive exemptions.
TSMC and Samsung shares climbed 4.4% and 2% respectively on Thursday following news of their exemptions. Taiwan-based GlobalWafers, which operates a plant in Texas, jumped 10% and stated it had proactively "implemented cost reduction strategies" to maintain competitiveness.
While the Biden administration previously advanced chip manufacturing via incentives through the CHIPS and Science Act, Trump's strategy marks a sharp turn toward coercive economic policy. The 2022 law offered $52.7 billion in subsidies and tax credits, which successfully attracted five major chipmakers to establish plants in the U.S.
