Trump mulls a 300% tariff on chips — levies coming within two weeks as Section 232 investigation nears completion

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U.S. President Donald Trump plans to introduce steep new trade duties on steel, semiconductors, and possibly pharmaceuticals within the next two weeks. What could bewilder the high-tech industry is that Trump is mulling up to 300% tariffs on semiconductors, according to Bloomberg.

"I am going to have a rate that is going to be 200%, 300%," said Trump while talking to journalists onboard of the Air Force One, according to Bloomberg.

The threat would certainly make PC enthusiasts wonder whether they will have to pay $1,999 for Nvidia's top-end GeForce RTX 5090 as they do now, or nearly $6,000 if the proposal comes into effect. Buy, maybe not at all?

Trump's habit of announcing extreme tariff plans — like 200% – 300% duties on semiconductors — without actually putting them in place creates prolonged uncertainty that impacts the whole semiconductor supply chain.

For chipmakers, electronics brands, and AI companies, the lack of clear timelines or rules forces them to make contingency plans that may never be needed, tying up resources and slowing real investment. This kind of drawn-out “will he or won’t he” approach can push companies to make hasty shifts toward U.S. production, but it also risks leaving them exposed if the promised tariffs either change dramatically or never arrive.

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Anton Shilov is a contributing writer at Tom’s Hardware. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.

17 Comments Comment from the forums

hotaru251

Honestly...nobody likes a bully...I WISH big tech would just respond w/ "due to insane tariffs we are no longer taking US orders" as the nations need the product more than the producer needs the specific customer.
Reply
waltc3

Unless, of course, your chips are fabbed in the US, where the tariffs are $0. That's the whole idea...;) US chip manufacturing will become major in record time, I'll predict. The amount of new investment is huge.
Reply
DS426

waltc3 said:
Unless, of course, your chips are fabbed in the US, where the tariffs are $0. That's the whole idea...;) US chip manufacturing will become major in record time, I'll predict. The amount of new investment is huge.
It takes a long time and a lot of money to build advanced node fabs. Getting a few weeks notice isn't exactly conducive to re-onshoring manufacturing.
Reply
toffty

waltc3 said:
Unless, of course, your chips are fabbed in the US, where the tariffs are $0. That's the whole idea...;) US chip manufacturing will become major in record time, I'll predict. The amount of new investment is huge.
You may consider learning what it takes to create fabrication plants. Not to mention the materials that it takes to produce chips is a world-wide effort and cannot feasibly come from a single country with.

For this type of policy to work, the tarrifs would come into effect slowly over years if not decades.

Frankly, companies are likely to raise prices considerably and wait out Trump rather than spend the money and time to make the new plants. Easier to bribe politicians 😉
Reply
funguseater

It's all the supporting industries that dont exist that will really slow things down, even getting water to these new fabs is going to be something interesting
Reply
rm12

CPUs and other chips are the most complex objects ever made by humans, with an incredible high number of suppliers in the end-to-end supply chain. Only simple minds thinks this can be rebuild within one country in a few months. And if one country would be positioned the best, it might be China, which however still needs to get all raw materials within its borders. The magnet story is just one example about how long term China's planning is, where other countries' have not been up to the challenge, and still are not.
Reply
hotaru251

DS426 said:
It takes a long time and a lot of money to build advanced node fabs. Getting a few weeks notice isn't exactly conducive to re-onshoring manufacturing.
also fact that whoever takes office next could likely reverse them (as they see how it flipflops policies)

toffty said:
For this type of policy to work, the tarrifs would come into effect slowly over years of jot decades.
exactly. you give a half to full decade to let companies shift and let them build up to meeting your wants.
Also the amount of land, water, and power these need would not be sustainable if they all moved to USA.
Reply
jlake3

He's thrown out a lot of extreme numbers only for them to be short lived or walked back before implementation, and as others have pointed out, there's no way to on-shore any significant portion of America's semiconductor demand in the span of two weeks. And while a 200-300% tariff would be bad for consumer prices, for AI firms, it's even worse. Last I heard TSMC Arizona was producing some unspecified Ryzen 9000 chips (as well as things for Apple) and I believe Intel's 14th-gen can be made in tariff-free locations, but for Nvidia's datacenter products and AMD's Ryzen Instinct, there is no domestic substitution.

I feel the likely outcome is that tech companies make some hurried announcements involving billions of spending in the US over the next few years that are light on specifics, and the rate gets revised down.
Reply
blppt

waltc3 said:
That's the whole idea...;)
Not when the POTUS keeps flip flopping on tariffs all the time.

You want to reshore manufacturing? It has to be set up, consistently, over time.

Flip flopping and short-term strategies on tariffs only serve to force better trade deals. They cannot cause anything else.
Reply
bit_user

waltc3 said:
The amount of new investment is huge.
Just to add to what @DS426 said, another key point is that nobody is holding these companies to fulfill their promises. We'd do well to recall Foxconn's big plant in Wisconsin, announced during the President's first term. They would eventually abort that project, with few repercussions, if any.

That's exactly what I think is going to happen, again. Companies make big announcements, and it seems this is the main thing that counts. It's primarily a PR exercise, in other words. As long as the PR is good, the politics are good and that's what it's really all about.
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