President Donald Trump is contemplating the imposition of a 25% tariff on all computer chips imported into the United States. Although no official announcement has been made, Trump indicated that the tariff is ’likely'

Background

During a discussion at his Mar-a-Lago club, Trump suggested that such tariffs could escalate ‘substantially higher’ over time. This move comes alongside his prior threats of tariffs that could reach 100% on chips manufactured in Taiwan.

“It’ll be 25% and higher, and it’ll go very substantially higher over a course of a year.” (Translation: It will be 25% and increase significantly over the year.)

The wider implications of these tariffs remain uncertain, as they could impact international trade relations, especially with semiconductor manufacturers in countries like Taiwan and China. Intel, for instance, has production facilities located in Israel and Ireland, raising questions about their exemption from potential tariffs.

Trump also mentioned giving companies ’time to come in,’ suggesting they could relocate their manufacturing processes to the U.S. to avoid tariffs.

With the phase-in time for such relocations being substantial, it’s unclear how feasible his timeline is, particularly regarding the speed of establishing new production facilities in the U.S.

Conclusion

As public discussion around this issue unfolds, it is still uncertain whether these policies will take effect, and how they will impact the broader tech industry.