It is no secret that US President Donald Trump wants to bring manufacturing back to America. Right now, many US tech companies rely on manufacturing outside the US, such as in China, Taiwan, India, Vietnam, and Brazil, just to name a few. Now, it looks like Trump is threatening chipmakers with hefty tariffs if they don’t invest in America.
Trump threatens chipmakers with hefty tariffs
Speaking to reporters, Trump was quoted as saying, “Yeah, I have discussed it with the people here. Chips and semiconductors – we will be putting tariffs on companies that aren’t coming in. We will be putting a tariff very shortly.”
He also said, “We will be putting a very substantial tariff, not that high, but fairly substantial tariff with the understanding that if they come into the country, if they are coming in, building, planning to come in, there will not be a tariff.”
Interestingly enough, it looks like Apple is once again back in Trump’s good graces. The President’s remarks were made ahead of a dinner with the CEOs of major tech firms. He specifically mentioned Apple’s CEO, Tim Cook. “Like, I would say (Apple CEO) Tim Cook would be in pretty good shape.”
This is because Apple recently made a pledge to invest $100 billion in the US economy over the next few years. Cook also personally hand-delivered a gift to Trump. A gold and glass statue that was entirely made in the US. Prior to this, Apple appeared to be on the verge of falling out with Trump after the company suggested bringing iPhone manufacturing to the US would not be a feasible endeavor.
Massive import taxes for semiconductors
We already know that Trump is threatening some pretty high taxes for semiconductors imported into the US. Back in August, Trump placed a 100% tariff on chips imported into the US. However, there is a loophole. As long as companies have pledge their commitment to investing in the US by building more facilities, they could escape these tariffs, even if they are not currently manufacturing stateside.
This is why companies like Samsung and TSMC are increasing their investments in America. It is also why the US government is looking to prop up American companies like Intel to ensure they remain competitive amongst foreign companies.
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