Trump slaps 25% tariffs on semiconductors
President Donald Trump has announced plans to impose even more tariffs, this time targeting the automotive, semiconductor, and pharmaceutical industries. The 25% tariff would join imposed tariffs on China (10%) and 25% tariffs on any steel and aluminum imports.
Speaking at Mar-a-Lago, Trump indicated that he’d raise the rates even further. He claims that he wants to give “them a little bit of a chance”.
Experts have warned that this could have the opposite effect that the Trump administration desires. Part of the White House’s plan for excessive tariffs is to build up American infrastructure.
However, this still requires imports, which some Trump supporters are now discovering means that American businesses will need to pay the fee. With more tariffs, the costs of products within these industries will surge.
Pharmaceuticals would have a wider impact on the world, as the US imported well over $176 billion in 2024. Ireland, Germany, Switzerland, India, and China all contributed 49.4% of imports into the US last year. With heavy tariffs incoming, US-based companies might be deterred, resulting in price increases and a potential lack of medications on hand.
Expect high prices on tech as semiconductor industry hit with Trump tariff
In particular, these planned tariffs on semiconductors could spell disaster for the tech industry. Semiconductors are almost entirely outsourced to Asia, including Taiwan, where TSMC is located.
TSMC is one of the largest fabricators of chips and semiconductors in the world, with dozens of American companies relying on it to produce parts. These include Nvidia, AMD, and Apple.
Arizona-based plants were planned in 2020, during Trump’s first term, but have yet to materialize. Intel, which produces its chips in the US, is struggling to see the results needed to keep up. Reports from last year pointed to the company potentially shedding this side of the business entirely.
The semiconductor tariffs would also affect South Korean-based Samsung and SK Hynix, which both produce modules for RAM and storage.
Meanwhile, automotive businesses are expecting cars to see a price surge of a few thousand dollars. Data from sales in 2024 found that almost half of bought vehicles were imported outside of the US.
Featured image: White House Flickr, StockCake
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