US President Donald Trump announced plans to impose a 100 percent tariff on imported semiconductors during a White House event with Apple CEO Tim Cook on August 6.

The tariffs will target tens of billions of dollars’ worth of chips.

Companies manufacturing semiconductors in the US may be exempt, though it is unclear if this applies only to domestic production or also to imported chips from US-based firms.

The White House said the tariffs will be phased and nuanced to encourage domestic chip manufacturing while minimizing supply chain disruptions.

The US imported over US$60 billion in semiconductors in 2024, mainly from Asia.

Top suppliers include Taiwan, Malaysia, Vietnam, Thailand, China, South Korea, Japan, and the EU.

The EU secured a 15 percent tariff under a recent trade deal. South Korea and Japan appear to have won similar commitments, though not yet confirmed.

🔗 Source: Politico

🧠 Food for thought

1️⃣ Semiconductor tariff strategy follows Reagan’s 1980s playbook against Japan

Trump’s announcement echoes President Reagan’s approach when the U.S. faced similar competitive pressures from Japan in the semiconductor industry.

In 1987, Reagan imposed tariffs on $300 million worth of Japanese semiconductor imports, stating, “We cannot allow it to be jeopardized by unfair trading practices” due to national security concerns 1.

The Reagan-era strategy initially raised chip prices, benefiting U.S. manufacturers but harming companies that relied on semiconductors 2.

However, that historical precedent shows mixed results. While tariffs provided short-term protection, U.S. companies shifted focus from innovation to lobbying for protectionist measures, with Intel’s chairman spending significant time in Washington instead of on research and development 2.

The current policy mirrors Reagan’s approach by framing semiconductor imports as a national security issue through Commerce Secretary Lutnick’s Section 232 investigation, the same type of trade authority Reagan used 2.

2️⃣ Tariff timing creates tension with massive domestic semiconductor expansion