Chips won't taste good unless made in US

The Trump administration is considering imposing additional tariffs on foreign semiconductors, with the aim of encouraging more manufacturing to take place within the United States. Commerce Secretary Howard Lutnick revealed that these potential tariffs would be paired with relief measures for companies that invest in domestic production, a strategy previously employed by the administration in the pharmaceutical sector.

Lutnick explained that companies building in America would receive tariff relief, while those not investing in domestic manufacturing would face tariffs. This approach, he stated, is a sensible way to achieve the desired outcome and has proven effective.

The administration has already imposed 25% tariffs on certain advanced semiconductors following a Commerce Department investigation into trade practices. These levies could potentially extend to products containing chips, impacting imports of data center servers and consumer electronics. Critics have raised concerns that additional tariffs might make it more expensive to build data centers in the US.

However, Lutnick emphasized that targeted and thoughtful tariff policy could mitigate this issue, offering incentives for domestic fabrication while imposing tariffs on non-domestic manufacturers.

Lutnick highlighted the $1.2 trillion in commitments made by various companies to build semiconductors in the US, including Taiwan Semiconductor Manufacturing Co. Ltd. and Micron Technology Inc. These investments were partly spurred by the US-Taiwan trade pact signed earlier in the year, which pledged $500 billion in investments and credit guarantees to support high-tech manufacturing in the US.

Lutnick also mentioned that further investment pledges from Taiwan, amounting to $20 billion to $30 billion, would be announced the following week.