President Trump’s Radical Trade Policy Announcement on August 6, 2025
US to levy 100% tariff on imported chips—President Trump, on August 6th, 2025, unveiled a radical trade policy announcing a 100% tariff on imported chips and semiconductors from countries that either lack domestic production or do not actively support American manufacturing. This unprecedented move is expected to shake the global tech sector and could potentially restructure the entire semiconductor supply chain.
Breaking: US to levy 100% tariff on imported chips — Large Exceptions for Strategic Partners
In the Oval Office by the side of Apple CEO Tim Cook, Trump presented that companies that are built in or will see that happen here at home will be a pass on the punitive tariffs. Also at the same time Apple reported their large $600 billion which goes toward U.S. manufacturing a picture of how large scale corporations are setting out to play it safe in terms of that 500 billion investment.
In the historic White House meeting we saw Trump introduce a tariff of around 100% on chips and semiconductors which he announced. Also reported that should a company choose to build in the U.S.A. the President’s floor is clear they will not be taxed. As for those that do not stand by their manufacturing word with regard to the U.S. the President made it known that there will be retroactive penalties which he put in place as a very strong incentive for companies to invest at home.
Strategic Waivers for Large Players in the Tariff on Semiconductors Issue
Several large semiconductor players have won out with big investments in the US. Taiwan’s Semiconductor Manufacturing Company (TSMC) which is the world’s largest contract chipplayer got in via a $165 billion put in for Arizona based factories. Their huge investment which includes five state of the art fabrication plants also created thousands of high tech jobs and put the US on the map as a key semiconductor player.
Samsung Electronics and SK Hynix which have set up manufacturing in Texas and Indiana received a break. South Korea’s chief trade representative reported that these companies will not have to pay the 100% tariff on semiconductors they will instead pay preferential rates as a part of our current trade agreements.
Nvidia, the leader in AI chips, is to avoid passing on increased tariff costs thanks to their recent investments in American semiconductor production which is to the tune of hundreds of billions. Also they have the support of domestic manufacturers which includes TSMC’s Arizona plant that are strategic partners which in turn protect against import duties.
Global Electronics Supply Chain to Bear the Brunt
Industry experts report that we see the US put in a 100% tariff on imported chips which in turn will see large scale price increases in the consumer electronics, automotive, and industrial sectors. From research done by Consumer Technology Association we see that smart phones may go up 31% in price, laptops and tablets 34% more expensive and also that we are looking at 69% price increase for video game consoles.
Tariff structure which is to see the U.S. consumer’s purchase power reduced at the rate of $123 billion reports Trade Partnership Worldwide. Also report that electronics retailers are seeing large scale supply chain issues and inventory management problems as the new policy is put into play.
Philippines semiconductor industry players report that Trump’s tariff announcement is very damaging for their country which exports 70% of its output in semiconductors. Also in Malaysia reports that their electronics sector is at risk of great competition problems should products see large price increases in the U.S. market.
National Security Based Trade Action which is Unprecedented
Trump used Section 232 of the 1962 Trade Expansion Act as the basis for the semiconductor tariffs which he put forth due to what he said were national security issues related to foreign dependency in key tech fields. Also under review is Commerce Secretary Howard Lutnick’s ongoing study into the national security aspects of semiconductor import which is to supply the legal structure for these wide reaching trade actions.
The administration reports that we went from 40% of global semiconductor production in 1990 to only 12% today which they see as an unacceptable strategic deficit. The CHIPS and Science Act passed out $52.7 billion for domestic manufacture incentives that past[age] also the Trump administration’s tariff approach puts forward a more aggressive “stick” as opposed to “carrot” strategy.
Market’s Reaction Identifies Winners and Losers in Chip Tariff Game
Asian semiconductor play saw a mixed response to Trump’s announcement. TSMC saw its shares jump 4.4% on the news of an exemption, also Samsung Electronics which had been expected to do well out of the policy saw their shares go up 2%. In Japan, at first our equipment makers fell but then came back as investors’ recognized the growth in American manufacturing demand which these companies will benefit from.
Apple saw a 5% increase in their stock during regular trading which then went up a further 3% in after hours reports and that’s a reflection of the fact that investors are very positive about the company’s status. The tech leader’s strategy in large scale investment at home is playing out very well for them in this tariff environment which they are mostly withstanding.
Intel’s share price also went up in after hours trading which was despite the company’s recent issues what we saw instead was investor response to the prospect of greater foreign competition which didn’t play out. Also to Intel’s benefit is that it has strong manufacturing bases in the US which plays to its advantage in the new tariff environment.
Global Trade Allies Vying for Preferential Access
The European Union put in place a 15% uniform tariff which applied to most exports which included semiconductors, we see this as a move which gave large scale competitive advantage to non allied nations. Japan and South Korea secured almost identical benefits via bilateral agreements which in turn points to a coordinated effort to solidify strategic alliances and at the same time put pressure on adversaries.
China is at the brunt of the new policy which also sees analysts report that companies like SMIC and Huawei do not fall out of the purview of punitive tariffs. This focused approach is a element of larger geopolitical issues and is also a display of America’s intent to reduce tech dependence on what it deems strategic competitors.
Trump’s Aggressive Tariff Strategy and Future Trade Offensive
Trump’s tariff strategy is a large change from past administrations which focused on carrot based incentives toward a more aggressive approach which is put forth in an effort to bring about rapid supply chain restructure. The policy’s success will be based on if American consumers and businesses can handle higher costs at the same time domestic manufacturing capacity increases to meet demand.
Semiconductor tariff announcement is but the start of what is to be a larger trade offensive by Trump which includes also pharmaceutical products and other strategic sectors. As global supply chains adjust to this new reality the US putting a 100% tariff on imported chips will in all likelihood restructure international trade for years to come.
New Source: Reuters thefinancialexpress bloomberg cnbc tbsnews nytimes
