Trump: "Semiconductor tariffs to be announced next week… High rates if not produced in the US"

Korea Economic Daily

Summary

"President Trump stated that he will formalize the imposition of tariffs on semiconductors starting next week."
"He emphasized that in order to encourage domestic production in the United States, an initially low tariff rate will be applied, and after a certain period, a high tariff will be imposed."
"He claimed that this tariff policy is resulting in hundreds of factories, including those in automobiles and artificial intelligence (AI), moving into the United States."

Tariffs initially low, set to rise significantly after a period

Claims that "AI and car factories, etc., are flowing into the United States"

Donald Trump, President of the United States, has formalized the plan to impose tariffs on semiconductors sometime next week. To encourage domestic production within the United States, a lower initial tariff rate will be applied, but after a certain period, the rates will be significantly increased.

President Trump told reporters on Air Force One, en route to Alaska for the US-Russia summit with Vladimir Putin, that "the semiconductor tariffs will be decided at some point next week," adding, "the tariff rates have not been finalized yet." Earlier, he mentioned he would set tariffs on steel and semiconductors next week and the week after.

Currently, steel imports already face a 50% tariff. Both steel and semiconductors are subject to 'item-specific tariffs' rather than reciprocal tariffs, imposed under Section 232 of the Trade Expansion Act. This provision allows the President to impose tariffs or other import restrictions if the import of certain items is deemed to threaten the national security of the United States. The US Department of Commerce is already investigating the impact of semiconductor imports on national security, and Secretary Howard Lutnick announced late last month that "tariff announcements could be made within two weeks."

President Trump explained the purpose of the tariffs: "The initial rate will be set low, to give companies the opportunity to come in and build factories (in the United States)," stressing that "after a certain period, the tariffs will become very high, and if production is not done domestically, high tariffs will be imposed."

He also argued that as a result of this tariff policy, "hundreds of factories, including those for automobiles and artificial intelligence (AI), are coming into the United States." He added, "Putin did not care about former President Biden's economy, but he is interested in the Trump economy," noting that "Putin has brought many economic advisors and, if progress is made in the summit, economic issues could be discussed."

Reporter Hyein Lee hey@hankyung.com