President Trump is continuing to threaten Tariffs, this time targeting TSMC via Tariffs on chips made in Taiwan.
TSMC is the world’s leading semiconductor manufacturer. The company makes chips for all of Apple’s products, as well for AMD, Nvidia, Intel, and more. The company has a significant technological lead over rivals, making it the go-to option for companies needing the most advanced chips on the market.
“In the very near future, we’re going to be placing tariffs on foreign production of computer chips, semiconductors and pharmaceuticals to return production of these essential goods to the United States,” Trump said in a speech to House Republicans at the Trump National Doral Gulf Club in Miami.
“They left us and went to Taiwan, which is about 98% of the chip business, by the way, and we want them to come back,” Trump said, speaking of companies like Apple and Nvidia, which rely on TSMC for chip production.
Trump went on to say that companies would build factories in the US without receiving billions in AID, referencing the US CHIPS Act.
“And we don’t want to give them billions of dollars like this ridiculous program that Biden has given everybody billions of dollars. They already have billions of dollars,” Trump continued. “They’ve got nothing but money Joe. They didn’t need money. They needed an incentive. And the incentive is gonna be they’re not gonna wanna pay a 25, 50 or even a 100 % tax.”
“They’re gonna build their factory with their own money,” Trump added. “We don’t have to give them money. They’re going to come in because it’s good for them to come in. They’re giving the money, they don’t even know what they’re going to do with it.”
The Bigger Issue
While tariffs could certainly play a roll in forcing TSMC and other chip manufacturers to open more plants in the US, or even push companies to use Intel’s foundries instead of TSMC, leveling tariffs against Taiwanese chipmakers ignores a larger issue.
Detroit is not the automotive capital of the world just because Ford, GM, and Chrysler’s manufacturing facilities are there. The truth of the matter is that there is an entire industry built up around the companies, providing the myriad of support and supplementary services and products needed to manufacture automobiles.
The same is true with the computer industry. The actual semiconductors are just one part of the picture. The reality is that there is an entire industry built up in China, India, and Vietnam supporting the manufacture of computers, smartphones, tablets, and more.
While forcing companies to build more US-based semiconductor factories is certainly a step toward revitalizing American semiconductor production, it will not by itself result Apple, HP, Dell, or any other electronics company suddenly making their products in the US. The US simply doesn’t have the infrastructure in place to support domestic computer, smartphone, and tablet production.
As a result, it remains unclear what the ultimate end-goal is: A revitalization of US semiconductor production, and semiconductor production alone, or the first step toward a complete rebuilding of the entire infrastructure needed for domestic computer production.
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