In a major move aimed at reshaping the global semiconductor supply chain, U.S. President Donald Trump has announced a 100% tariff on all imported computer chips. The policy is designed to reduce America’s reliance on foreign-made semiconductors and support domestic manufacturing, but experts warn it could also lead to higher costs for electronics, automobiles, and other technology-driven products.
U.S.-Made Chips Will Be Exempt
Trump clarified that semiconductors produced within the United States will not be affected by the new tariff. He referred to the global chip shortage during the COVID-19 pandemic, which had caused auto prices to surge and contributed to inflation, as a key reason behind this decision.
Companies like Nvidia and Intel, which operate chip manufacturing facilities in the U.S., are expected to be exempt from the tariff. However, both companies have yet to officially respond to the policy announcement.
Apple’s Global Supply Chain in Focus
Although Apple is an American company, nearly 90% of its iPhones are assembled in China. The new tariff may put pressure on Apple and similar tech companies to shift more of their manufacturing back to the U.S. Tim Cook, who has met with Trump several times in the past, reaffirmed Apple’s long-term plan to boost domestic production during the meeting.
Apple to Begin Mass Production of New iPhones in India Despite U.S. Tariff Concerns
Apple suppliers are moving ahead with plans to mass-produce the upcoming iPhone in India, expecting the device to be excluded from the recently announced 50% U.S. tariffs on Indian imports. According to Nikkei Asia, production is set to begin within weeks, even as policy uncertainty remains. The move is part of Apple’s broader strategy to reduce its reliance on China amid rising geopolitical tensions.
Despite the risk of changing tariff rules, Apple has been steadily increasing its manufacturing footprint in India and Southeast Asia. In fact, Apple reported in May that a majority of iPhones sold in the U.S. during Q2 were made in India. The company’s long-term plan appears focused on building a more resilient and diversified supply chain.
Global Reactions Mixed
Reactions from the international community have been varied. South Korea’s trade envoy, Yeo Han-koo, confirmed that major Korean chipmakers Samsung Electronics and SK Hynix will not be subject to the new tariffs. He cited favorable terms under the U.S.-South Korea trade agreement that secure these exemptions.
Similarly, Taiwanese authorities have confirmed that TSMC, the world’s largest contract chip manufacturer, will also be exempt from the 100% tariff.
However, not all countries were as fortunate. The Philippines Semiconductor and Electronics Industries warned that the U.S. policy could have a severe impact. The group noted that over 70% of the Philippines’ exports consist of semiconductor products, and the tariff could be “devastating” for its economy.
What This Means for Consumers
While the policy aims to bring long-term benefits through more secure and local supply chains, the immediate effect could be higher consumer prices on gadgets, electric vehicles, and household electronics that rely on imported chips.
Analysts expect the policy to spark further negotiations between the U.S. and chip-exporting nations, while U.S.-based manufacturers may see increased demand and investment opportunities.
Looking Ahead
As the global semiconductor industry adapts to these sweeping changes, all eyes will be on how multinational tech companies respond to the U.S. push for domestic chip production. With Apple’s $600 billion commitment leading the charge, the future of high-tech manufacturing in the U.S. appears poised for significant transformation.
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