WASHINGTON (AP) — President Donald Trump said Wednesday that he will impose a 100% tariff on computer chips, likely raising the cost of electronics, autos, household appliances and other goods deemed essential for the digital age.
“We’ll be putting a tariff on of approximately 100% on chips and semiconductors,” Trump said in the Oval Office while meeting with Apple CEO Tim Cook. “But if you’re building in the United States of America, there’s no charge.”
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The Republican president said companies that make computer chips in the U.S. would be spared the import tax. During the COVID-19 pandemic, a shortage of computer chips increased the price of autos and contributed to an overall uptick in inflation.
Inquiries sent to chip makers Nvidia and Intel were not immediately answered.
Demand for computer chips has been climbing worldwide, with sales increasing 19.6% in the year-ended in June, according to the World Semiconductor Trade Statistics organization.
Trump’s tariff threats mark a significant break from existing plans to revive computer chip production in the United States. He is choosing an approach that favors the proverbial stick over carrots in order to incentivize more production. Essentially, the president is betting that higher chip costs would force most companies to open factories domestically, despite the risk that tariffs could squeeze corporate profits and push up prices for mobile phones, TVs and refrigerators.
By contrast, the bipartisan CHIPS and Science Act signed into law in 2022 by then-President Joe Biden provided more than $50 billion to support new computer chip plants, fund research and train workers for the industry. The mix of funding support, tax credits and other financial incentives were meant to draw in private investment, a strategy that Trump has vocally opposed.
