Trump may tie tariffs on foreign electronics to number of chips
The Trump administration is eyeing the possibility to impose tariffs on foreign electronic devices based on the number of chips in them, three people familiar with the matter told Reuters.
Image by Florence Lo | Reuters
The Trump administration is eyeing the possibility to impose tariffs on foreign electronic devices based on the number of chips in them, three people familiar with the matter told Reuters.
It’s currently planned, although still subject to changes, that the Commerce Department would impose a tariff equal to a percentage of the estimated value of the product's chip content.
"America cannot be reliant on foreign imports for the semiconductor products that are essential for our national and economic security," White House spokesperson Kush Desai told Reuters.
"The Trump administration is implementing a nuanced, multifaceted approach to reshoring critical manufacturing back to the United States with tariffs, tax cuts, deregulation, and energy abundance."
If passed, new tariffs could drive up the cost of consumer goods and inflation, as even locally produced goods will likely increase in price due to tariffs on inputs required to make them.
The implementation of the tariffs will also show that the Trump administration is willing to target a wide range of consumer products, as it aims to ramp up local US manufacturing.
In February, Trump signed an executive order imposing 25% additional tariffs on the US trading partners Canada and Mexico, and 10% additional tariffs on goods from China. The move raised concerns that further escalation could be potentially detrimental to hardware prices, product availability, IT services, and vendors.
Up until now, the administration has already deployed various tariffs and announced new ones, such as 100% duties on branded drugs and 25% levies on heavy-duty trucks, due to take effect on October 1st.
Trump also announced plans to impose a tariff of about 100% on imports of semiconductors. Although the details are still not fully clear, some companies, such as those that move half their production to the US or manufacture in the US, may be exempt. At the same time, Trump required major US semiconductor manufacturers, Nvidia and Advanced Micro Devices, to give the US government 15% of revenue from sales to China of certain advanced computer chips.