Trump Threatens 100% Tariff on Computer Chips Unless Companies Manufacture in U.S.
WASHINGTON (AP) — President Donald Trump announced Wednesday he will impose a 100% tariff on imported computer chips, unless companies manufacture them in the United States—raising concerns over the potential impact on electronics, vehicles, appliances, and other products reliant on semiconductors.
“We’ll be putting a tariff of approximately 100% on chips and semiconductors,” Trump said during an Oval Office meeting with Apple CEO Tim Cook. “But if you’re building in the United States of America, there’s no charge.”
The announcement comes three months after Trump temporarily exempted most electronics from steep tariffs under his administration. This new policy aims to push companies toward domestic chip manufacturing by dramatically increasing the cost of imported semiconductors.
U.S.-Made Chips Will Be Exempt
Trump clarified that the tariffs would not apply to chips made within the United States. His administration is betting that steep import taxes will pressure global tech firms to shift production stateside—despite risks of higher prices for consumers and lower margins for companies.
During the COVID-19 pandemic, a global chip shortage drove up vehicle prices and contributed to surging inflation. The administration sees domestic production as a way to avoid future supply chain vulnerabilities.
Tech Giants Commit Trillions to U.S. Manufacturing
Major tech firms have already responded to Trump’s push. Since his return to the White House in January, Big Tech companies have pledged over $1.5 trillion in U.S. investments. Apple alone has increased its total commitment to $600 billion, adding another $100 billion in new promises since February.
The market reacted positively to the news. Apple shares surged 5% during regular trading Wednesday and climbed another 3% in after-hours trading as Trump confirmed that some tech companies would be spared the new tariffs, with Cook standing beside him in the Oval Office.
Chip Stocks Rise on U.S. Commitments
Other chipmakers also saw gains:
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Nvidia rose in extended trading, building on a staggering $1 trillion market cap gain under Trump’s second term.
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Intel, despite recent struggles, also saw its stock price climb after the announcement.
Both companies have been making major investments in U.S.-based chip facilities, though neither responded to media inquiries. The Semiconductor Industry Association, the chip sector’s main trade group, also declined to comment.
Demand for Chips Soars Globally
Global demand for semiconductors continues to rise. According to the World Semiconductor Trade Statistics organization, chip sales increased 19.6% year-over-year through June.
Trump’s tariff threat marks a major departure from the Biden-era strategy of using government subsidies to boost chip manufacturing. The CHIPS and Science Act, signed into law in 2022, earmarked over $50 billion in support for U.S. chip production, research, and workforce training.
Trump, by contrast, has rejected subsidy-heavy approaches, opting instead to leverage tariffs as a direct pressure tool.
While Biden’s plan offered incentives, Trump’s plan imposes consequences.