Trump Administration Weighs Steep Semiconductor Tariffs With Phased Rollout Possible

The Trump administration is considering imposing steep tariffs on imported semiconductors, Politico reported on August 27.

Politico, citing eight people familiar with the matter, reported that the administration is reviewing the plan despite opposition from US industry.

President Donald Trump has pledged since last year to impose semiconductor tariffs, but he has not fully followed through. Instead, while semiconductors were included in product-specific tariffs, chips and electronics such as laptops and mobile phones were excluded from country-specific tariffs. That has allowed Apple iPhones made in China to enter the US with little impact from tariffs on Chinese goods. In January, the Trump administration announced a 25% tariff on semiconductors, but the measure has functioned only as an exceptional tool tied to levies on Nvidia exports to China.

The main reason semiconductor tariffs have moved slowly has been industry resistance. Critics have argued that such tariffs could leave the US behind China in the race for artificial intelligence. Politico reported that sentiment is now shifting. People familiar with the discussions said officials are considering either a broad expansion of the products subject to tariffs or a phased introduction of the duties.

Howard Lutnick, the US commerce secretary, favors linking tariff relief for foreign companies to investment in US semiconductor manufacturing to spur domestic production. Lutnick and others have previously referred to a framework that would exempt imports from tariffs up to the amount produced in the US. He has also said South Korean and Taiwanese companies would face 100% semiconductor tariffs if they do not invest in the US. On Taiwan, home to TSMC, Lutnick has repeatedly said the US should account for at least 50% of semiconductor production and has stressed his determination to bring Taiwan's chip industry to the US.

In the US, criticism is mounting that Trump's pledge to win the AI race conflicts with his semiconductor tariff policy. Opponents say sweeping tariffs would significantly raise the cost of building data centers in the US.

Even so, the administration is still reviewing steep semiconductor tariffs, in what is seen as a political calculation that promises of job creation through chip tariffs may resonate more with voters than data-center construction, which is drawing growing opposition.

Lee Sang-eun, Washington correspondent, Hankyung.com, selee@hankyung.com