Tag: economy

“President Donald Trump is considering imposing a 100 percent tariff on semiconductors to incentivize chipmakers to invest in domestic manufacturing, a move that would make it harder to build out American chip fabrication.

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The Chamber of Commerce warns that a 1 percent increase in tariffs on chips and semiconductor manufacturing equipment will increase the construction costs of all announced domestic semiconductor fabrication plants (valued at $540 billion) by as much as $3.5 billion. A 100 percent rate increase, then, could increase construction costs for these projects by $350 billion. Moreover, “additional costs will reduce demand for end market products [and] reduce investments in semiconductor R&D,” diminishing American semiconductor dominance instead of enhancing it.

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Intel, “the only American company [that is] capable of producing leading-edge logic semiconductors,” warned that “Section 232 tariffs could increase U.S. manufacturing costs for essential materials and components.” The Semiconductor Industry Association, a trade association and lobbying group, said that “removing trade and other barriers to U.S. chips in overseas markets,” which account for 70 percent of revenue to the U.S. semiconductor industry, is key to making the expansion of domestic capacity economically viable. Right now, “the complete onshoring of all semiconductor supply chain elements is not feasible, much less in a short period of time,” because “supply chains have evolved over decades and cannot be rearranged overnight or even within a decade””

https://reason.com/2025/09/29/trumps-100-percent-chip-tariff-could-make-it-more-expensive-to-build-more-semiconductors-in-the-u-s/