chip Photo:VCG

US President Donald Trump said on Wednesday that he would impose a tariff of about 100 percent on semiconductor imports, although he would exempt companies that move production back to the US, according to a Bloomberg report on Thursday. Chinese analysts said that this policy risks fragmenting global supply chains and increasing overall manufacturing costs.

"We'll be putting a tariff of approximately 100 percent on chips and semiconductors," Trump said in the Oval Office while meeting with Apple CEO Tim Cook. "But if you're building in the US, there's no charge," the Associated Press reported on Thursday.

The announcement came more than three months after Trump temporarily exempted most electronics from his administration's nation-specific reciprocal tariffs, which are set to increase for many trading partners on Thursday, according to the Bloomberg report.

"The Trump administration has attempted to bring high-end manufacturing back to the US, aligning with the 'job reshoring' narrative, by planning to impose 100 percent tariffs on chip imports, which may pressure some major companies to comply," Zhang Xiaorong, director of the Beijing-based Cutting-Edge Technology Research Institute, told the Global Times on Thursday. 

Bloomberg also reported that Trump announced a fresh $100 billion investment plan with Cook, which will include a new manufacturing program to bring more of Apple's production to the US.

Apple had previously pledged to spend $500 billion in the US over the next four years. The Thursday announcement will bring Apple's cumulative commitment to $600 billion, Bloomberg reported.

However, NBC News reported that "Apple said Wednesday that it would expand its planned investment in the US as it faces pressure from Trump to shift its supply chain to American soil."

Reuters also reported that despite political pressure, analysts widely agree that building iPhones in the US remains unrealistic due to labor costs and the complexity of the global supply chain.

Apart from Apple, TSMC is also "exempted" from Trump's 100 percent chip tariff, the AFP News Agency reported on Thursday.

In March, TSMC announced that it intended to expand its investment in the US to $165 billion to power the future of artificial intelligence (AI).

The US tariff policy essentially prioritizes "short-term political gains at the expense of long-term economic efficiency," said Zhang.
This approach risks fragmenting global supply chains, increasing overall manufacturing costs, which are ultimately borne by consumers and small businesses, and may delay progress in critical technologies such as AI and green energy, Zhang noted.

On April 13, China's Ministry of Commerce (MOFCOM) urged the US to take a significant step in correcting its mistakes and completely cancel the wrong practice of "reciprocal tariffs."

The comments were made after the US on April 12 released a memorandum exempting computers, smartphones, semiconductor manufacturing equipment, integrated circuits and other products from "reciprocal tariffs". 

China's position on China-US economic and trade relations is consistent. There is no winner in a trade war, and there is no way out for protectionism, a MOFCOM spokesperson said. 

"We urge the US to listen to the rational voices of the international community and domestic parties, take a significant step in correcting its mistakes, completely cancel the wrong practice of 'reciprocal tariffs,' and return to the right path of mutual respect and resolving differences through equal dialogue, the spokesperson said.

Global Times