Donald Trump called for tariffs on foreign computer chips, semiconductors, and pharmaceuticals from places like Taiwan in the near future.
In the speech at the House GOP Issues Conference in Miami, Trump said that manufacturers also don’t need an incentive to build their chip factories in the U.S. He suggested he would remove Joe Biden’s program of paying subsidies to chip makers like Intel to build in the U.S.
The impact of such tariffs could be huge. The Consumer Technology Association, the lobbying group for the U.S. electronics industry, warned that tariffs could take the cost of game consoles from the hundreds of dollars to $1,000.
“In the very near future, we’re going to be placing tariffs on foreign productions of computer chips, semiconductors and pharmaceuticals to return production of these essential goods to the United States of America,” Trump said. “They left us and they went to Taiwan, which is about 98% of the chip business, by the way. And we want them to come back and we won’t to give them billions of dollars like this ridiculous program that Biden has.”
The bipartisan-supported Chips & Science Act earmarked $52 billion in subsidies to enable companies to build factories in the U.S. Intel, TSMC, Coherent and Analog Devices were among the companies receiving grants from the Biden administration.
” Give everybody billions of dollars. They already have billions of dollars. They’ve got nothing but money Joe. They didn’t need money,” Trump said. “They needed an incentive. And the incentive is going to be they are not going to want to pay a 25, 50 or even 100% tax. They are going to build the factory with their own money. We don’t have to give them money. They are going to come in because it’s good for them to come in. You give them money and they don’t know what to do with it.”
I’ve asked the Semiconductor Industry Association, the chip industry’s lobbying group, for comment but I suspect they won’t like it.
Thanks to incentives rather than tariffs, the SIA said this month that the Chips and Science Act is on track to strengthen American manufacturing, create jobs, boost economic growth, and promote national security. The act’s manufacturing incentives have sparked substantial announced investments in the U.S., the group said.
“In fact, companies in the semiconductor ecosystem have announced 90 new projects across 28 U.S. states—totaling hundreds of billions of dollars in private investments—since the Chips and Science Act was introduced. These announced projects will create more than 58,000 jobs in the semiconductor ecosystem and support hundreds of thousands of additional U.S. jobs throughout the U.S. economy.
An SIA-Boston Consulting Group report released last May projected the United States will triple its domestic semiconductor manufacturing capacity from 2022—when the act was enacted—to 2032. The projected 203% growth is the largest projected percent increase in the world over that time. The report also projected America will capture over one-quarter (28%) of total global capital expenditures from 2024 to 2032.
The CTA said during CES that the proposed tariffs could increase prices on laptops and tablets by 46%, game consoles by 40%, and smartphones by 26%.
Update: 1/29/25: Meanwhile, the Semiconductor Industry Association (SIA) released statement from SIA President and CEO John Neuffer commending the introduction in the U.S. House of Representatives of the bipartisan Semiconductor Technology Advancement and Research (STAR) Act.
The STAR Act extends the duration of the Advanced Manufacturing Investment Credit (AMIC)—a 25% tax credit for chip production—and expands eligibility of the credit to include investments in semiconductor design, the research-intensive mapping of a chip’s intricate circuitry and functionality. Reps. Blake Moore (R-UT), Suzan DelBene (D-WA), Michael McCaul (R-TX), Doris Matsui (D-CA), John Moolenaar (R-MI), and Raja Krishnamoorthi (D-IL) led eight other House members in introducing the legislation. A similar version of the legislation was introduced in the House last year.
“U.S. leadership in semiconductor research, design, and manufacturing is critical to America’s economy, technology leadership, and national security,” Neuffer said. “The CHIPS Act’s investment tax credit has been hugely successful in strengthening America’s semiconductor ecosystem, spurring substantial private investment and helping to put the U.S. on track to more than triple domestic chip manufacturing capacity by 2032, the largest percentage increase in the world. By extending the duration of the credit, the STAR Act would build on this momentum by promoting further growth in chip manufacturing here in the United States.”
He added, “By expanding coverage of the credit to include chip design, the STAR Act would ensure the U.S. secures the economic, national security, and first-mover advantages of being the global leader in semiconductor technology. At a time when global competitors are making historic investments in their own chip ecosystems, we urge Congress to pass the STAR Act to help America win the chip race, enhance our economic and national security, and reinforce U.S. semiconductor leadership for years to come.”
