US Administration Set to Introduce Strict Tariffs on Chips; Commerce Department Signals No Pushback on Future Semiconductor Regulations

The Trump administration is set to introduce “aggressive”tariffs on semiconductor imports this week, potentially leading to profound repercussions for the information technology sector.

Potential Impact of Proposed “100% Chip Tariff”on Taiwan

As the new US administration prioritizes domestic semiconductor manufacturing, President Trump has actively advocated for imposing chip tariffs to incentivize companies such as TSMC to relocate production to the United States. Notably, the US Commerce Department recently initiated an investigation aimed at assessing the potential impact of these tariffs on the technology industry, soliciting feedback from various local organizations. However, a public notice indicates that only ten responses have been received, suggesting a lack of opposition to the proposed tariffs.

We expect the announcement of chip tariffs by Wednesday, especially since the administration has revealed that semiconductors will be featured in upcoming policy decisions. President Trump has mentioned that tariffs could reach as high as 100% on imports from Taiwan, asserting that this would be a fitting response to what he characterizes as “theft”of US technology. The absence of opposition to the Commerce Department’s public inquiry may bolster the President’s position.

Additionally, the Commerce Department is exploring ways to enhance domestic chip production to meet market demands. It appears likely that the introduction of tariffs will coincide with initiatives aimed at strengthening the domestic semiconductor industry, potentially benefiting major players like Intel and TSMC. Indeed, TSMC has already committed over $100 billion in investments to the United States as part of a strategy to circumvent anticipated tariffs.

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The window for public comments is closing on May 7, further emphasizing the imminent introduction of these tariffs. A historical comparison reveals that during the timber tariff discussions, the Commerce Department collected over 300 responses, leading to a reevaluation of their policies. Public feedback in these forums is viewed as a barometer of consumer and industry sentiment, underlining its importance in shaping these significant policy decisions.

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