Trump’s planned 100% computer chip tariff sparks confusion among makers

President Donald Trump pauses while speaking during an announcement about Apple with Apple CEO Tim Cook in the Oval Office, Wednesday, Aug. 6, 2025, in Washington. (AP Photo/Alex Brandon)

AP — President Donald Trump’s ambiguous plans for 100-percent tariffs on computer chips that aren’t made in the US are stoking confusion among businesses and trading partners. This is boosting stocks for leading semiconductor companies while leaving smaller producers scrambling to understand the implications.

“We are still waiting for official guidance,” said Limor Fried, founder and engineer at Adafruit Industries, a small electronics maker in New York.

The chips that go into Adafruit’s products come through US sales and distribution companies. They also come directly from companies in the Philippines and Taiwan.

READ: Philippine semiconductor sector fears ‘devastating’ US tariffs

If those chips aren’t exempt from tariffs, “it would increase the costs that go into our designs as the semiconductors are the most expensive component in our assemblies,” Fried said. “For many of these tariffs, we often have to wait until we get a bill to know our exposure. And then we adjust our pricing to account for the increases.”

The US imports a relatively small number of chips. This is because most of the foreign-made chips in a device — from an iPhone to a car — were already assembled into a product, or part of a product, before it landed in the country.

“The real question everybody in the industry is asking is whether there will be a component tariff, where the chips in a device would require some sort of separate tariff calculation,” said Martin Chorzempa, a senior fellow at the Peterson Institute for International Economics.

Exemptions

Trump said Wednesday that companies that “made a commitment to build” in the US would be spared the import tax. This, even if they are not yet producing those chips in American factories.

“We’ll be putting a tariff of approximately 100 percent on chips and semiconductors,” Trump said in the Oval Office while meeting with Apple CEO Tim Cook. “But if you’re building in the United States of America, there’s no charge.”

Wall Street investors interpreted that as good news not just for US companies like Intel and Nvidia, but also for the biggest Asian chipmakers like Samsung and Taiwan Semiconductor Manufacturing Co. that have been working to build US factories.

However, it left greater uncertainty for smaller chipmakers in Europe and Asia that have little exposure to the artificial intelligence boom but still make semiconductors inserted into essential products like cars or washing machines.

German chipmaker Infineon Technologies, which supplies chips to the auto industry, said in an emailed statement Thursday that it “can’t speculate about potential semiconductor tariffs” and Trump’s announcement, “as no official documents have been published at this point.”

READ: Shape up for bigger share of chip trade, PH told

These producers “probably aren’t large enough to get on the map for an exemption and quite probably wouldn’t have the kind of excess capital and margins to be able to add investment at a large scale into the United States,” Chorzempa said.

It’s also not clear how the chip-specific tariffs would apply to trading partners that already made broader deals with Trump. Examples are agreements with the European Union, Japan and South Korea that tax most goods at 15 percent.

‘Eager to learn more’

A trade group, the Semiconductor Industry Association, said Thursday it was “eager to learn more” about the planned chip tariffs, “including the scope and structure of exemptions.”

The announcement came more than three months after Trump temporarily exempted most electronics from his administration’s most onerous tariffs.

During the COVID-19 pandemic, a shortage of computer chips increased the price of autos and contributed to higher inflation. Chorzempa said chip tariffs could again raise prices by hundreds of dollars per vehicle if the semiconductors inside a car are not exempt.

“There’s a chip that allows you to open and close the window,” Chorzempa said. “There’s a chip that is running the entertainment system. There is a chip that’s kind of running all the electronics. There are chips, especially in EVs, that are doing power management, all that kind of stuff.”