Trump Targets Chips With 100% Tariff, Sparks Global Market Jitters

Tech Sector Stocks Tumble as US President Promises Incentives for Domestic Production

In a significant shift in trade policy, President Donald Trump has announced his intention to impose a hefty 100 percent tariff on computer chips and semiconductors. This move, revealed during a meeting with Apple CEO Tim Cook, aims to revitalize domestic manufacturing by increasing the cost of imported components.

Taiwanese Chip Giant Exempt, But Markets React

Taiwan’s key chip manufacturer, TSMC, has reportedly secured an exemption from the new levy, a crucial development for the island nation’s export-driven economy. TSMC operates manufacturing facilities within the United States, potentially influencing its exemption status.

The announcement sent ripples through Asian stock markets, with companies heavily involved in chip production experiencing notable declines. Tokyo Electron, a supplier of manufacturing equipment, saw its stock price dip by 3.4 percent. Chipmaker Renesas followed with a 2.5 percent fall on the Tokyo Stock Exchange.

In South Korea, SK Hynix, a major player in memory chip manufacturing, experienced a 2.9 percent decrease in its stock value, reflecting broader concerns about the potential impact of increased trade barriers on the global technology supply chain.

Potential Price Hikes and Economic Ripple Effects

Beyond the direct impact on electronics, the proposed tariffs could lead to increased prices for a wide range of consumer goods. Cars, household appliances, and other everyday items that rely on integrated circuits may become more expensive for consumers.

The semiconductor industry has faced significant challenges in recent years, including shortages that contributed to inflation and higher vehicle prices during the COVID-19 pandemic. Global demand for these essential components has surged, with industry sales experiencing a nearly 20 percent increase year-over-year in June, according to Statista.

This tariff announcement marks a decisive pivot from encouragement to imposition in the drive to boost U.S. chip production. While **Trump**’s strategy relies on making imports costlier to spur domestic output, Congress previously allocated substantial funding. In 2022, under the Biden administration, a bipartisan proposal authorized up to $50 billion in incentives to attract private investment into the semiconductor industry.