New US tariffs on semiconductors coming ‘over the next week’, Donald Trump says

The Trump administration has indicated it will develop a new suite of tariffs on the semiconductor industry, separate to the “reciprocal” tariffs already announced for most American trading partners.

Commonly known as chips, semiconductors are the foundation for most electronic devices.

On Friday, local time, the government issued a tariff exemption for a range of electronics exported to the United States. The notice, published by US Customs and Border Protection, applied to items such as smartphones, computers, hard-drives, flat-panels, some chips and the machines used to make them.

The exemption means tech products arriving from China, which is currently subject to a 145 per cent tariff, and other nations, which are facing a 10 per cent baseline tariff amid a 90-day pause on the levies initially announced on “Liberation Day”, would have no tariffs imposed on them.

But on Sunday, US President Donald Trump said the exclusion of smartphones and computers from his reciprocal tariffs would be short-lived, and that they would be instead be classified under a forthcoming category of tariffs specific to the semiconductor sector.

“The tariffs will be in place in the not too distant future,” he told reporters aboard Air Force One.

Asked what the rate for semiconductors would be, he said: “I’m going to be announcing it over the next week”, adding that there would be flexibility for some companies.

Separately, in a social media post on Sunday, Mr Trump said his government would open an investigation examining the trade of semiconductors in the context of their national security implications.

Those electronics “are just moving to a different Tariff ‘bucket’,” he wrote.

“We are taking a look at Semiconductors and the WHOLE ELECTRONIC SUPPLY CHAIN in the upcoming National Security Tariff Investigations.”

Other White House officials also downplayed the significance of the exemption announced on Friday, with Commerce Secretary Howard Lutnick telling US media those goods were to be included in the semiconductor tariffs “coming in probably a month or two”.

“All those products are going to come under semiconductors, and they’re going to have a special focus type of tariff to make sure that those products get reshored,” Mr Lutnick said. 

“We need to have semiconductors, we need to have chips, and we need to have flat panels — we need to have these things made in America. We can’t be reliant on South-East Asia for all of the things that operate for us.”

Sector-specific semiconductor levies would follow the Trump administration’s similar measures for the steel, aluminium and automobile industries announced in recent weeks.

Big Tech in turmoil

Washington’s approach to tech imports, and what it hopes to achieve by distinguishing them into a new national security tariff regime, remains unclear. 

The ensuing turmoil has battered the stocks of tech’s “Magnificent Seven” — Apple, Microsoft, Nvidia, Amazon, Tesla, Google parent Alphabet and Facebook parent Meta Platforms.

Wedbush analyst Dan Ives said on Sunday the White House “is dizzying for the industry and investors and creating massive uncertainty and chaos for companies trying to plan their supply chain, inventory, and demand”.

Mr Trump’s broader so-called reciprocal tariffs have been framed as measures to boost domestic manufacturing and employment, as well as address US trade deficits.

The confusion around electronics tariffs is the latest of several turnarounds his trade policy has undergone. After announcing sweeping levies on virtually every country in the world on April 3, less than 14 hours after they took effect on April 9, Mr Trump announced a 90-day “pause”, reducing the higher-rate tariffs to 10 per cent for every trading partner but China.

It sparked a tit-for-tat with Beijing, with Mr Trump progressively increasing the levy on Chinese imports into the US from 84 per cent to 125 per cent. That was in addition to the 20 per cent tariff already imposed in February over China’s alleged role in fentanyl supply chains.

China has imposed a retaliatory tariff of 125 per cent on American exports.

The Chinese commerce ministry on Sunday welcomed the tariff exemption for electronics as a small step towards de-escalating trade tensions between the two countries, but called on the US to completely cancel the rest of the tariffs.

Sparing tech goods from being tariffed could help keep the prices down for phones and other consumer products that are not usually made in the US. 

It was expected to benefit big tech companies such as Apple and Samsung, and chip makers such as Nvidia.

But with the Silicon Valley’s supply chain heavily concentrated in China, India and other overseas markets, building new plants to move manufacturing into the US would cost billions of dollars and take several years.

Samsung, which mainly produces in Vietnam and South Korea, was given funding last year to build factories in Texas as part of the Biden government’s efforts to bring more chip-making onshore.

In 2024, Vietnam, Thailand, Malaysia, India, and Cambodia were the largest exporters of semiconductor devices to the US.

Mr Trump said he would get into more specifics on exemptions on Monday.

ABC/wires