President Donald Trump said his administration will impose tariffs on semiconductor imports from companies that do not move production to the US.

He did not specify the timing or rate of the tariffs but called them “fairly substantial.”

Companies investing in US-based manufacturing will be exempt from the tariffs.

Trump has used tariffs to influence trade negotiations and push companies to build in the US.

Apple, TSMC, Samsung Electronics, and SK Hynix have all announced major US manufacturing investments, making them less likely to be affected.

Trump has frequently used tariffs to pressure companies and governments, though many of his trade levies face legal challenges in US courts.

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🔗 Source: Reuters

🧠 Food for thought

Implications, context, and why it matters.

Trump’s tariff strategy echoes a failed 1980s approach that backfired on U.S. competitiveness

The current semiconductor tariff plan mirrors the 1986 U.S.-Japan Semiconductor Agreement, which aimed to limit Japanese chip exports to protect American manufacturers2. That earlier agreement led to higher prices for American computer manufacturers and ultimately harmed their competitiveness rather than helping domestic chip production2. U.S. semiconductor market share actually declined from 60% in the 1970s to 35% by 1989 despite the protectionist measures, demonstrating how tariffs failed to restore American dominance2. The decline has continued, with the U.S. share of global semiconductor production dropping to around 12% today, down from 60% in the 1970s3. Historical evidence suggests that tariffs created a “government-enforced cartel” that increased costs for consumers and manufacturers while failing to address underlying competitiveness issues2.

The tariff exemption structure creates clear winners and losers based on existing manufacturing commitments

Companies like TSMC, Samsung Electronics, and SK Hynix have already announced investments in U.S. chip manufacturing, positioning them to avoid the proposed 100% tariffs1. Apple recently raised its U.S. investment commitment to $600 billion over four years, with CEO Tim Cook specifically mentioned by Trump as being “in pretty good shape” regarding the tariffs1. The exemption criteria reward companies that made U.S. manufacturing bets before the tariff announcement, while penalizing those that maintained offshore-only operations4. Smaller manufacturers and companies without existing U.S. operations face significant disadvantages, as they cannot quickly establish domestic production to qualify for exemptions4. This structure effectively accelerates the ongoing shift toward U.S. semiconductor production, but primarily benefits large firms with resources to make substantial domestic investments5. ……