Trump Plans Chip Tariffs That Could Hit Servers & Laptops, Tech Industry Warns Of AI Setback

The Trump administration is poised to introduce tariffs on imported semiconductors that may extend to encompass finished devices like data center servers, laptops, and gaming consoles. This development has met with strong opposition from technology industry leaders, who contend that the tariffs could jeopardize America's pursuit of leading the global AI race.

Central to the proposed framework is a proposal by Commerce Secretary Howard Lutnick that would tie tariff exemptions to a company's investment in U.S.-based chip fabrication. Under this approach, companies would be permitted to import a limited volume of semiconductors without incurring duties, with the size of this allowance contingent upon their commitment to building domestic manufacturing capacity.

Reports indicate that Indian firm AM Intelligence has placed an order for 9,000 Nvidia Vera Rubin system chips for an AI factory in Hyderabad. Officials are reportedly considering tiered tariff rates and import caps that would differ based on the trading partner and the scale of their leading semiconductor manufacturers. There are also indications that the new tariffs might be rolled out in phases, although those involved in the discussions caution that the plan could still undergo significant modifications before it is finalized.

The proposal underscores a clash at the core of the administration's economic strategy, as it seeks to simultaneously bolster U.S. chip manufacturing while maintaining its leadership in AI technology. The tariff plan emerges at a critical juncture when major American tech companies are pouring hundreds of billions of dollars into expansive server infrastructure to accommodate surging demand for sophisticated chips.

Industry associations have cautioned that tariffs on imported components would markedly increase the cost of these projects, potentially leading companies to postpone or scale down their plans for data center expansions. Apple recently unveiled a new Mac Mini featuring the M6 chip, just days before the iPhone 18 Pro event. Jonathan McHale, who oversees digital policy at the Computer and Communications Industry Association, representing members such as Amazon, Google, and Meta, likened the current data center expansion to the construction of the transcontinental railroad.

He cautioned that heightened costs and reduced predictability could make such investments less justifiable. The White House defended the proposed plan, with a spokesperson, Kush Desai, emphasizing that reshoring semiconductor manufacturing remains a top priority for President Trump. Desai cited the hundreds of billions of dollars already invested in the sector and pledged to pursue further investment and economic relief for American citizens while safeguarding national security interests.