President Trump has announced plans to impose tariffs on foreign-made computer chips, semiconductors, and pharmaceuticals, in particular those originating from Taiwan.
In a speech to House Republicans on January 27, Trump claimed the tariffs would incentivize tech companies to manufacture chips in the US instead of Taiwan.
Tariffs are paid by the importer, not the exporting nation.
"In the very near future, we are going to be placing tariffs on foreign production of computer chips, semiconductors, and pharmaceuticals to return production of these essential goods to the United States," Trump said during his speech.
“They left us and they went to Taiwan, which is about 98 percent of the chip business by the way, and we want them to come back. We don’t want to give them billions of dollars like this ridiculous program that Biden has – give everyone billions of dollars."
Taiwanese chip companies produce about 60 percent of the world's chips, but more than 90 percent of leading-edge chips, including Nvidia's data center GPUs.
“They already have billions of dollars," Trump continued. "They’ve got nothing but money, Joe [Biden]. They didn’t need money, they needed an incentive and the incentive is going to be that they’re not going to want to pay a 25, a 50, or even a 100 percent tax. They’re going to build their factory with their own money. We don’t have to give them money.”
He added: “They’re going to come in because it’s good for them to come in. They’re giving them money, they don’t even know what they’re going to do with it. I had people tell me we didn’t need money.”
On average, it takes around three to four years to build a new chip fab, but large projects like TSMC's Arizona fab have been hit by delays and worker shortages.
When approached by DCD regarding Trump's comments, TSMC said it was not able to comment at this time.
More than $32bn in CHIPS funding awarded during Biden presidency
According to the Semiconductor Industry Association (SIA), during his time in office, former President Biden announced around $32.5 billion in CHIPS and Science Act grant awards, and up to $5.5bn in loans to 32 companies across 48 projects in 23 states.
These projects include total investments of more than $380bn over two decades, with the majority to be invested by 2030. The projects are expected to create more than 145,000 new jobs – around 43,000 manufacturing jobs and 102,000 construction jobs.
Companies that have announced investments in the US after being a recipient of CHIPS Act funding include Amkor, Samsung, Texas Instruments, SK Hynix, TSMC, GlobalFoundries, Intel, Micron, and GlobalWafers.
Trump has previously made disparaging comments about the Taiwanese chip industry and criticized the CHIPS and Science Act, saying that the government should have levied tariffs on the semiconductor industry instead of handing out grants and loans to chip companies.
Speaking during an interview with Joe Rogan before the 2024 election, Trump said: "You know, Taiwan, they stole our chip business, okay?”
He added: “They want us to protect, and they want protection. They don't pay us money for the protection, you know. The mob makes you pay money, right? But with these countries that we protect, I got hundreds of billions of dollars from NATO countries that were never paying us."
Trump made similar comments in July 2024, saying that payment would be like protection money.
