U.S. President Donald Trump announced that he plans on imposing tariffs on computer chips made in Taiwan, hoping that it would help increase chip production in America.
Trump announced his new plan at a House Republicans meeting in Florida on Monday, per Taiwan News.
“In particular, in the very near future, we’re 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,” said Trump, according to PCMag. “They left us and went to Taiwan.”
PCMag says his comments were referencing how U.S. tech companies have been sourcing their processors from Taiwan Semiconductor Manufacturing Company (TSMC), the largest contract chipmaker in the world.
“We want them to come back,” Trump continued, “And we don’t want to give them billions of dollars like this ridiculous program that Biden has given everybody billions of dollars. They already have billions of dollars, they’ve got nothing but money Joe. They didn’t need money. They needed an incentive. And the incentive is gonna be they’re not gonna wanna pay a 25, 50 or even a 100 % tax.”
While TSMC previously established a factory in Arizona, much of its chip production still occurs in Taiwan, with clients including companies like Apple, Nvidia, Qualcomm, AMD, and more.
Trump was critical of Biden’s decision to sign the CHIPS and Science Act, which invested over $52 billion in domestic chip manufacturing. According to PCMag, Intel received $7.9 billion in funding to construct factories in Arizona, New Mexico, and Oregon, and a new chip manufacturing hub in Ohio.
“They’re gonna build their factory with their own money. We don’t have to give them money, They’re giving the money, they don’t even know what they’re going to do with it.”
According to PCMag, Trump is hoping his tariff plans will force more American tech companies to move their chip production to the U.S. But building the factories can take years. The tariffs would drive up the price of products that use chips manufactured in Taiwan, like iPhones.
Taiwan’s economic ministry responded to Trump’s comments by saying, per Reuters, “Taiwan and the U.S. semiconductor and other technology industries are highly complementary to each other, especially the U.S.-designed, Taiwan-foundry model, which creates a win-win business model for Taiwan and U.S. industries.”
He added that the economic ministry “will continue to pay attention to U.S. policy going forward, and there will be close contact and cooperation between the two sides to ensure that Taiwan’s and U.S.’ industries and national interests can develop in a mutually beneficial way in the face of global challenges”
Earlier this month, Kuo Jyh-huei, the Taiwanese Economy minister, said that he expected the effects of any tariffs on semiconductors imposed by Trump to be small, considering their technological superiority.
In a separate statement, the Taiwanese presidential office responded by saying that they and the U.S. have “good mutual trust and a close relationship” regarding chips and technology-related cooperation, and also described the tariffs as a “win-win situation.”
Taiwan News mentions that a study conducted by MIT, Harvard, University of Zurich, and World Bay economists on tariffs in Trump’s first term reportedly discovered that they did not fill their indented purpose of bringing more jobs back to the U.S., and that the tariffs had zero impact on U.S. employment as a whole.
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