US President Donald Trump said the tariff will not impact companies if they have already invested in US facilities.
United States President Donald Trump says he will impose a 100 percent tariff on foreign-made semiconductors, although exemptions will be made for companies that have invested in the US.
“We’ll be putting a tariff on of approximately 100 percent on chips and semiconductors, but if you’re building in the United States of America, there’s no charge, even though you’re building and you’re not producing yet,” Trump told reporters at the Oval Office on Wednesday evening.
The news came after a separate announcement that Apple would invest $600bn in the US, but it was not unexpected by US observers.
Trump told CNBC on Tuesday that he planned to unveil a new tariff on semiconductors “within the next week or so” without offering further details.
Details were also scant at the Oval Office about how and when the tariffs will go into effect, but Asia’s semiconductor powerhouses were quick to respond about the potential impact.
Taiwan, home of the world’s largest chipmaker TSMC, said that the company would be exempt from the tariff due to its existing investments in the US.
“Because Taiwan’s main exporter is TSMC, which has factories in the United States, TSMC is exempt,” National Development Council chief Liu Chin-ching told the Taiwanese legislature.
In March, TSMC – which counts Apple and Nvidia as clients – said it would increase its US investment to $165bn to expand chip making and research centres in Arizona.
South Korea was also quick to extinguish any concerns about its top chipmakers, Samsung and SK Hynix, which have also invested in facilities in Texas and Indiana.
Trade envoy Yeo Han-koo said South Korean companies would be exempt from the tariff and that Seoul already faced “favourable” tariffs after signing a trade deal with Washington earlier this year.
TSMC, Samsung and SK Hynix are just some of the foreign tech companies that have invested in the US since 2022, when then-President Joe Biden signed the bipartisan CHIPS Act offering billions of dollars in subsidies and tax credits to re-shore investment and manufacturing.
Less lucky is the Philippines, said Dan Lachica, president of Semiconductor and Electronics Industries in the Philippines Foundation.
He said the tariffs will be “devastating” because semiconductors make up 70 percent of the Philippines’ exports.
Trump’s latest round of blanket tariffs on US trade partners is due to go into effect on Thursday, but the White House has also targeted specific industries like steel, aluminium, automobiles and pharmaceuticals with separate tariffs.
