Trump Administration Weighs Steep Tariffs on Imported Semiconductors

Politico Reports

Move Advances Despite Tech Industry Opposition

Lutnick Said to Favor Incentives for US Production

The Trump administration is considering imposing steep tariffs on imported semiconductors, Politico reported on Aug. 27.

Citing eight people familiar with the matter, Politico said the administration is reviewing the move despite opposition from US industry.

President Donald Trump has promised since last year to impose semiconductor tariffs, but has not fully followed through. Instead, semiconductors were included in product-specific tariffs, while chips and electronics such as laptops and mobile phones were excluded from country-specific tariffs. That has allowed Apple iPhones made in China to enter the US with little impact from tariffs on Chinese goods. In January, the Trump administration announced a 25% tariff on semiconductors, but in practice it has served only as a narrow exception aimed at collecting what amounts to a levy on Nvidia exports to China.

The main reason semiconductor tariffs have advanced slowly has been industry pushback. Critics have argued the policy could leave the US behind China in the race for artificial intelligence. Politico said that sentiment is changing. People familiar with the discussions said officials are considering either a much broader set of products or a phased rollout.

Howard Lutnick, the US commerce secretary, is said to favor linking tariff relief for foreign companies to investment in US semiconductor manufacturing to spur domestic production. Lutnick and others have previously floated exempting imports from tariffs in proportion to a company's US output. They have also said South Korean and Taiwanese companies could face semiconductor tariffs of 100% if they do not invest in the US.

In the US, critics say Trump's pledge to win the AI race conflicts with his semiconductor tariff policy. Large tariffs would sharply increase the cost of building data centers in the country, they argue.

Even so, the administration is reviewing steep semiconductor tariffs because it sees chip-industry job creation as politically advantageous.

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