What Did President Trump Propose About Semiconductor Tariffs?

In the summer of 2025, after his November 2024 re-election bid, President Donald Trump was all over the headlines for publicly threatening to place a 100% import tariff on semiconductor imports. According to reports by Reuters and Politico, the punishment would be applied to chips produced in countries not having any or significant U.S.-based facilities. This threat is one instrument amongst many in a series of developments aimed at persuading chip production to come home and lessen U.S. dependence on foreign supply chains.

However, Trump’s statement made an important qualification: companies building or who have built or are operating chip plants in the United States may be exempt from such tariffs. The provision is meant to encourage investment in American manufacturing while punishing the continuation of offshore production. 

Up until today, the tariff is still a proposal. No firm policy has been declared, no executive order issued, and no timeline communicated.

What This Could Mean for Global Brands

The prospective reach of this tariff proposal goes a good distance beyond the U.S. economy. Global brands dependent on semiconductor use, such as Apple, Samsung, BMW, and Sony, ostensibly face uncertainties with respect to SEMI supply costs and strategic planning issues.

They are used in semiconductors in phones, EVs, appliances, and cloud services. A 100% tariff on any imported chips shall redound greatly on raising manufacturing costs for those companies doing any kind of sourcing from Asia. Should these cost increases be enforced, there will be an odious increase in prices being levied on the consumers in the world markets.

Apple, for example, relies heavily on Taiwan’s TSMC for chip production. Although TSMC is investing in a fabrication plant in Arizona, it is not yet fully operational. If Trump’s tariff plan were enacted and TSMC’s output from Taiwan were not exempt, Apple would be forced to either absorb increased costs or adjust product pricing.

UK- and EU-based brands would also be affected if they rely on Asian components and sell products into the U.S. The potential financial impact may lead to contract renegotiations, altered sourcing strategies, or reduced margins.

The sort of industries to be most exposed during the trade restriction in question would be electric vehicle (EV) manufacturers, chiefly those selling to American customers. Chips lie at the heart of performance, safety, and control systems in EVs. An increase in chip prices might delay production or raise prices for buyers.

Though currently a term of art, uncertainty in the tariff alone may affect decision-making strategy across industries.

Who Might Be Affected and Who Might Benefit

The structure of the proposal—especially the exemption for companies with U.S. operations—could shift the competitive landscape.

Intel, Micron, GlobalFoundries, and Texas Instruments are actively building or expanding chip manufacturing within the U.S. These companies are well-positioned to benefit if the tariff becomes law.

Reuters reported that Trump warned companies not to offer empty promises. Only firms making real progress on domestic facilities would likely qualify for the exemption. Retroactive penalties were mentioned as a possibility, adding further pressure.

TSMC and Samsung have also invested billions into U.S. chip production. TSMC’s Arizona plant and Samsung’s Texas facility are significant undertakings, though it remains unclear whether all their global output would be exempt under any future rule.

Despite the threatening rhetoric, Business Insider noted that semiconductor stocks rose after the announcement. Investors appear to believe the policy may be negotiable or slow-moving, or that many companies will qualify for exemptions.

If implemented, the policy could reward companies already investing in the U.S. while challenging those with heavier dependence on offshore manufacturing.

What Are Other Countries Doing in Response?

Although the tariff has not been enacted, international governments are already responding to the U.S. push for chip self-sufficiency.

The European Union continues to expand its Chips Act, aiming to increase its global market share to 20% by 2030. STMicroelectronics and Infineon are scaling operations with public support.

Japan is funding its domestic semiconductor sector through partnerships and national subsidies. Rapidus, a new Japanese chip firm, is backed by the government and is building advanced fabrication capabilities.

South Korea is doubling down on long-term investment in Samsung and SK Hynix to maintain global leadership. These firms are central to both regional and global supply.

China is moving with urgency to chip independence, given the sanctions being imposed by the United States. SMIC focuses on scaling the production of simpler but essential chips for a variety of domestic industries. 

In the UK, compound semiconductor research and targeted investment initiatives slated for 2025 will promote research and small-scale production capabilities.

Even without immediate U.S. enforcement, these national strategies reflect a broader global shift toward localisation and technological independence.

Chip Production Landscape: Global Context

According to the Semiconductor Industry Association:

• East Asia accounts for over 70% of global chip production.
• Taiwan’s TSMC manufactures 92% of the world’s most advanced semiconductors.
• The United States produces around 12%.
• Europe contributes roughly 9%.

This distribution illustrates how concentrated global chip production remains in East Asia. Any policy threatening to limit access to those supply chains—whether through tariffs or trade restrictions—has wide-reaching implications.

Even with massive U.S. investment underway, scaling up chip production takes time. Most new fabs won’t be operational until 2026 or later.

Until then, brands heavily reliant on imported chips will remain vulnerable to policy changes and price fluctuations.

What Should Consumers and Industry Watch For?

For consumers, the key signals to monitor include:

• Announcements on pricing for smartphones, laptops, and appliances
• Delays in new tech product launches
• Changes in EV pricing and availability

For the industry:

• Track official updates from the U.S. government on tariff implementation
• Evaluate supplier exposure to non-U.S. chip production
• Watch how exemptions are defined and enforced, if at all

This proposed tariff has not yet taken effect. But the conversations it has triggered are shaping decisions in boardrooms and supply chains worldwide.