TSMC and Trump Agreement: Potential “Chip Tariffs” on Taiwan; Electronics Using TSMC Chips Could Face Up to 100% Tariffs

Despite TSMC’s recent pact with the Trump administration, concerns about potential “Taiwan chip tariffs”persist. Reports suggest that tariffs may be extended not only to the chips produced in Taiwan but also to the electronic devices that utilize these semiconductors.

TSMC’s US Expansion: Tariff Concerns Remain Unresolved

It appears that the deal reached between TSMC and the Trump administration does not fully alleviate the threat of tariffs. As indicated by sources reported by WIRED, there is speculation that President Trump could consider imposing new tariffs specifically on products that incorporate Taiwanese chips, rather than just taxing the chip imports themselves. This could result in significant price increases for consumer electronics—estimates suggest that the costs could soar by as much as 100%, posing serious challenges for the consumer market.

But the deal has not ended deliberations inside the Trump administration about potentially imposing tariffs as high as 100 percent on TSMC and other Taiwanese chipmakers, according to a person familiar with the matter. One version of the plan, the person says, would involve placing import duties not just on Taiwanese chips themselves but also on electronic devices that contain them, such as Apple iPhones.

– WIRED

The recent agreement between TSMC and the Trump administration includes a historic investment of up to $165 billion, underlining the establishment of new manufacturing facilities in Arizona, along with advanced packaging centers and a dedicated research and development facility. This marks the largest single foreign investment in the United States to date. The announcement, made at the White House with TSMC CEO C. C.Wei by Trump’s side, emphasizes the U. S.commitment to boosting domestic chip production, even if it involves tough measures.

If the Trump administration chooses to implement tariffs on devices that utilize TSMC chips, the repercussions could extend across the tech industry, leading to drastic price hikes for everyday consumer products. This approach appears logical, as the majority of imports consist of finished products that employ TSMC’s semiconductors rather than the microchips themselves. However, this initiative raises alarm for consumers and could severely disrupt the technology sector.

While the situation remains fluid, it is clear that dealings with the Trump administration may become increasingly complicated for TSMC and similar companies. With tariffs already affecting trade with nations like Mexico, Canada, and China, it is conceivable that Taiwan may soon find itself in a similar predicament. This concern is heightened by Trump’s previous claims that Taiwan’s practices amount to technology theft from the United States.

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