Trump’s chip tariff plan criticized by auto, tech sectors

The proposal by President Donald Trump to impose tariffs of up to 25% on imported semiconductors has received significant criticism from multiple industries.

Comments submitted to the Commerce Department reveal concerns from sectors including automotive, marine manufacturing, technology, and cryptocurrency.

The tariffs are intended to boost domestic production but have raised fears of supply chain disruptions and higher costs.

JoAnne Feeney, a portfolio manager at Advisors Capital Management, warned that these tariffs could lead to increased consumer prices.

Semiconductor companies like Taiwan Semiconductor Manufacturing Co. (TSMC) and Intel have expressed their opposition.

Foreign governments, including Taiwan, have voiced concerns that the tariffs could disrupt global supply chains.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ Global semiconductor interdependence creates expansive economic vulnerabilities

Tariffs on semiconductors would impact a vast range of industries because chips are now embedded in nearly every product sector, from marine equipment to home appliances.

Taiwan produces 18% of global semiconductors and dominates 92% of manufacturing capacity for complex logic chips, creating a critical dependency that affects multiple supply chains 1.

A disruption through tariffs could increase U.S. logic chip prices by 59%, directly impacting industries far beyond technology 1.

Economic analyses show a 25% semiconductor tariff could decrease U.S. GDP growth by 0.18% in the first year, accumulating to a $1.4 trillion loss over a decade 2.

The Semiconductor Industry Association has warned that tariffs could reduce U.S. IT spending growth from 5% to just 2.1%, potentially leading to cutbacks and job losses across sectors 3.

Even industries like boating have flagged concerns in public comments, noting that crucial systems for safety and navigation contain semiconductors with “no US equivalent” or only available from overseas suppliers.