Trump promises significant semiconductor import taxes imminently

In a recent development, U.S. President Donald Trump announced plans to impose a "fairly substantial tariff" on semiconductors imported into the country. This decision, which could potentially impact the tech industry, is part of the trade pact negotiated between the U.S. and Japan.

The tariff on semiconductors, as yet, does not specify a timetable or details. However, it is worth noting that Trump previously threatened a 100-percent levy on semiconductors and this latest announcement seems to be a realization of that threat. The tariff on chips and semiconductors remains approximately 100% unless they are manufactured in the United States, as stated by Trump.

The new tariff on semiconductors could potentially cause volatility in Asian chipmaker shares, primarily affecting companies outside the USA that produce chips abroad. Notable examples include the Taiwanese chip giant TSMC and South Korean companies Samsung Electronics and SK Hynix. Unless these companies commit to producing chips in the USA or have already announced investments in US chip production, they are likely to be affected by the new tariff.

In a separate announcement, Trump signed an order to lower tariffs on Japanese autos. The tariff on Japanese autos will be reduced from 27.5% to 15%. Unlike the tariff on semiconductors, the new tariff on Japanese autos will take effect, but the timeline for other goods is not specified.

The U.S. and Japan agreed upon the tariff changes, but the exact timetable for implementation is not specified. Tokyo's tariff envoy visited Washington to press Trump to sign the document for the tariff changes. Trump made this announcement at a White House dinner with tech industry executives.

It's important to note that no information has been provided regarding any exceptions for semiconductors from firms that invest in the United States. The U.S. and China are in a high-stakes race to develop high-end semiconductors used for artificial intelligence systems. The new tariff on semiconductors has the potential to be significant, though Trump did not specify the exact percentage.

Trump's announcement of the tariff on semiconductors was made in August 2021. The tariff on many other goods will also be capped at 15% according to the executive order. The new tariff on Japanese autos and the potential tariff on semiconductors are likely to have wide-ranging implications for the global tech and automotive industries.