Trump's tariffs target tech: Boosting US chip production
President Donald Trump announced the introduction of tariffs on semiconductors from abroad, mainly from Taiwan, to encourage companies to move production to the USA. Trump also stated that the success of the Chinese AI model, which caused dramatic declines on the stock market, is a positive event.
- In the very near future, we intend to impose tariffs on foreign production of computer chips, semiconductors, and pharmaceutical products so that the production of these essential goods returns to the United States, said Trump in a speech at a gathering of Republican congressmen at his golf resort in Doral, near Miami.
Trump announces new tariffs
Donald Trump criticized his predecessor's approach, which offered subsidies to companies to encourage them to build semiconductor factories in the USA. This approach benefited, among others, the world's largest semiconductor manufacturer, Taiwanese TSMC. TSMC is set to start producing its first advanced chips in Arizona in the first half of this year, and construction of the second factory is planned for 2027 or 2028.
Trump stated that 98 percent of computer chips are produced in Taiwan, and argued that subsidies are not needed to move production, but rather incentives in the form of tariffs. Introducing tariffs could lead to an increase in electronics prices in the USA.
Trump also referred to the new Chinese AI model DeepSeek, which was reportedly developed at a fraction of the cost of its American competitors, yet matches them in quality. According to him, it is "positive" because it shows that spending so much money on AI development is unnecessary.
Success of the Chinese giant and problems in the USA
DeepSeek's success contributed on Monday to significant declines in the stock market valuations of tech companies, including NVIDIA, the producer of advanced processors used in AI. The company's shares fell by 17 percent—almost 810 billion CAD—which was the largest one-day drop in market value in Wall Street history.
The launch of DeepSeek AI, a Chinese company, should be a warning signal for our industry that we must focus on competing to win – emphasized Trump.
The new president also spoke about the future of TikTok, claiming that numerous interested parties are lining up to purchase the Chinese app. Contrary to his previous statements on the matter, Trump suggested that he would not allow the platform to remain in Chinese hands. Previously, Trump proposed that TikTok be a joint venture with 50 percent US ownership.
