Trump Administration Weighs Steep Tariffs on Imported Semiconductors, Politico Reports

Politico report

Move under review despite tech industry opposition

Lutnick favors linking relief to US production

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

Citing eight people familiar with the matter, the political news outlet said the administration is reviewing the plan despite opposition from US industry.

President Donald Trump has vowed since last year to impose tariffs on semiconductors, but has not fully followed through. Instead, semiconductors were included in product-specific tariff categories, while chips and electronics such as laptops and mobile phones were excluded from country-specific tariffs. Apple iPhones made in China, for example, have largely entered the US without being affected by tariffs on China. In January, the Trump administration announced a 25% tariff on semiconductors, but the measure has functioned only as a narrow exception aimed at collecting what Politico described as a toll on Nvidia's exports to China.

Industry pushback has been the biggest reason semiconductor tariffs have been slow to materialize. Much of the opposition focused on concerns that the US could fall behind China in the artificial intelligence race. Politico reported that sentiment is now shifting. People familiar with the matter said officials are considering either a much broader set of products subject to the tariffs or a phased rollout.

US Commerce Secretary Howard Lutnick favors tying tariff relief for foreign companies to investment in US semiconductor manufacturing to spur domestic production, according to the report. Lutnick and others have previously floated exempting imports from tariffs up to the amount a company produces in the US. They have also said South Korean and Taiwanese companies could face 100% semiconductor tariffs if they do not invest in the US.

Criticism is mounting in the US that Trump's pledge to win the AI race clashes with his semiconductor tariff policy. Large tariffs would sharply raise the cost of building data centers in the US, critics say.

Even so, the administration is weighing steep semiconductor tariffs because the argument that they would create chip-manufacturing jobs could help win voter support, the report said.

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