The tariffs would ensnare cutting-edge smartphone and PC-related chips for Apple, AMD and Nvidia if enacted. But Trump is betting his plan will bring more chip production to the US.
spoiler
President Trump is preparing to place tariffs beyond Chinese assembled electronics to computer chips made in Taiwan, warning the tariffs could reach as high as 100%.
“In particular, 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 Republicans on Monday.
“They left us and went to Taiwan,” he then said in an apparent reference to how many of the leading US tech companies have been sourcing their processors from Taiwan’s TSMC, a top semiconductor manufacturer. TSMC has established a factory in Arizona, but much of its chip production remains in Taiwan, where it’s been serving clients including Apple, Nvidia, Qualcomm and AMD, among others.
“We want them to come back,” Trump said before slamming the US’s CHIPS and Science Act, which his predecessor President Biden signed to invest over $52 billion in domestic chip manufacturing.
“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 said. “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. We don’t have to give them money,” Trump added, later claiming: “They’re giving the money, they don’t even know what they’re going to do with it.”
The recipients of the funding, such as Intel, might disagree. Last year, Intel received $7.9 billion from the CHIPS Act, which will go toward expanding its factories in Arizona, New Mexico, Oregon and Ohio, where the company is building a new chip manufacturing hub. Even so, Trump is betting his tariff threat will push more US tech companies into migrating their chip manufacturing to the US over Taiwan.
“The only way you’ll get out of this is to build your plant —if you want to stop paying the taxes or the tariffs— you’ll have to build your plant right here in America,” Trump added. “That’s what’s going to happen at record levels.”
Still, it takes years to build a chip factory, meaning any tariffs on Taiwanese-manufactured chips risk causing price hikes for numerous computer products, such as Nvidia graphics cards, Apple iPhones and AMD processors, which all come from TSMC factories. That said, a lot will depend on how US trade officials implement such a tariff policy. TSMC-made chips usually aren’t exported directly to the US, but sent to China and other Asian countries, where they’re then assembled into consumer electronics bound for the US.
I don’t want to live in the economic conditions this dude is gonna create, but God damn if his erratic and impulsive threats and decisions aren’t funny as hell.
Imagine being a US company, one day you’re massively profitable, the next China unveils that it made a product that all of your clients make for a fraction of the cost and it works way better and it’s open source. The day after that your own president says your products are getting a tariff as high as 100% when you ship them back home.
I’d love to hear what they’re saying in some of these corporate offices and board rooms today. Surely absolute panic.
Though credit where credit is due: if the US wants to maintain being a super power, they need to have the ability to manufacture goods at home. Historically, tariffs would keep manufacturing at home.
Can tariffs bring manufacturing back? Maybe. Over the long term I believe so, but in the short term (unless there are backdoor deals where oligarchs are taking a financial hit to start manufacturing back up) it will not work. It will however bring much suffering.
I think these tariffs are the beginning of the empire’s death throes. It feels like the American leaders are trying desperately to hold on to control, and Trump is willing to try something different, rather than just doing business as usual.
Regardless of what happens, take care of yourselves, friends, family, and community.
Can tariffs bring manufacturing back? Maybe. Over the long term I believe so, but in the short term (unless there are backdoor deals where oligarchs are taking a financial hit to start manufacturing back up) it will not work. It will however bring much suffering.
There’s no fucking way that financial markets are ever willing to take any kind of a hit on purpose. It’s like half the rules and regulations in the US are meant to protect big businesses from ever being at a disadvantage. This is a short-sighted political economy by definition. I can see long-term planning coming from China, but from the US? No way.
That’s why they need to be disciplined by the state. Both Germany and Italy created capabilities to take over operations of companies while leaving shareholders in place because the state was willing to guide operations. The equivalent in the USA could happen.
Could it? I don’t know if there’s political will for that at all in 2025… the only disciplining the US capitalist state seems willing to do is of workers, rather than the bourgeoisie. That applies, in fact, to most western governments nowadays, I reckon, which is a sad state of affairs.
It’s really question of the bourgeoisie using the state to discipline the class into protecting itself. I don’t know if we’re there yet, but it’s a phase we need to watch for
I got to wonder now though, if the government keeps going at this pace and if the degradation also starts to hit some of the enforcement, will smuggling see an increase, will black markets become a major thing?
Definitely will
I’d love to hear what they’re saying in some of these corporate offices and board rooms today
“What’s John Hinckley up to these days?”
“Is there a Luigi for Presidents?”
I just love how all the tech CEOs started licking Trump’s ass just to get completely shat on by his overinflated ego.
I’m sure he thinks he’s doing them a favor. O can’t do the cadence, but something about banning Chinese tech makes it so people will have to buy “American computers” probably. Completely incoherent.
I thought he just wanted to do something bombastic and one-up China to boost his own ego. I don’t think a narcissist like him even wastes a single second thinking about doing others a favor.
I would love to be a fruitfly in corporate meetings by Meta/AMD/Apple/Nvidia to watch the meltdown of upper executives today.
As much as I enjoy Trump collapsing the American empire by spitting into the hand of every country that feeds it, how could corporate interests look at all this and think “this is fine”?
Surely turning the nation’s back on trading partners can’t benefit US corpos in the long run whatsoever, but then again what do I know?
Yeah I kind of understand corpos and billionaires kissing the ring. I cant see them being happy about Trump fucking with the money though
Or maybe they know a weaker US and stronger China is good for them, and they’re speedrunning US collapse by
and letting Trump do his thing.These guys have wealth beyond imagine. If the value of everything in America becomes significantly less as a result of these economic policies, they’ll be able to pick up the peaces with the unimaginable amounts of money they all sit on.
They don’t sit on an unimaginable amount of money. They sit on an unimaginable amount of wealth. There’s a difference.
Cash in a bank account is only insured against loss up to 250K. You can open a bunch of bank accounts but you’re not keeping $600Bn in cash.
Land is subject to property taxes annually, it’s also very hard to reallocate in the face of natural disaster, and reallocating it has tax implications.
Securities, though, are taxed less, are more easily reallocated, and can scale infinitely. Their only risk is the stock market crashing out.
And all of it depends on the US dollar being worth something. They will be able to transfer a portion of their wealth into another foreign currency, but they will not be able to hold on to their big numbers, and that’s all that matters to them.
Land has inherent value whether the dollar does or not. But if a communist revolution were to come around and give all the land back… Well, so much for that.
It has inherent value but social upheaval can destroy its time exchange value. Just like at commercial real estate in Manhattan
Congrats to everyone who bought puts on NVDA yesterday.
“Noooo not the chips, don!”He also argued that government grants like the CHIPS Act are unnecessary and counterproductive and that companies should use their own resources to build fabs rather than rely on public funding.
Get their asses
To be a fly on the wall that minute someone whispered into his ear about Taiwanese chip manufacturing. You know he had never held the thought where any of our microchips come from, or even if he did, he’ll still be thinking “MICROCHIPS” instead of cpus, gous, etc. cause he harbors absolutely no curiosity for these things
All 2nd term Trump know is threaten war, tax chip and lie
Seems like a great way to lose Taiwan to China, which at least checks out with Trump’s isolationism, but surely is pissing off a lot of state and corporate ghouls
This is consistent with the One China policy. He is applying tarrifs to China.
Perhaps, but the US has not been in the business of acknowledging One China in the past
It’s a joke
I don’t come to Hexbear dot net for jokes
Sure it has. It acknowledges One China across the strait and One China on the mainland.
I underestimated trump. Wondering how long till some capitalist puts a hit out on him, purely to save the american empire. Like, hate the deportations and horrible transphobia, but I can appreciate his anti-imperialist economic policies.
Well, that’s NVIDIA fucked, since they get their chips from Taiwan.
I’m sure Intel will take up the slack… you know, the company that completely abandoned working on the leading node , and has a massive, mutli billion dollar judgement hanging over them from selling chips that they knew were shitty and busted. Of course they already got 8 billion or so from Biden to improve production a few years ago, and did fuck all with it.
did they get any money from CHIPS? Many of the recipients suggested the money hadnt actually landed as of a few months ago.
Is Trump genuinely trying to speedrun the collapse of the American Empire?
I’m not particularly well-versed in macroeconomics and all that, but I feel extra ignorant right now. What in the name of everloving fuck is this supposed to achieve?
I like to think I can usually understand the reasoning behind this kind of economic decision enough to either agree or disagree with it and kind of contemplate what might be its results, but I’m really at a loss here.
They saw what happened to sanctioned Russia and thought they could do it to themselves
Raising tariffs to incentivize domestic production helps create jobs at the expense of corporate profit. From a Nationalist perspective, it’s a good thing.
Now, there’s a lot of ways Trump could fuck this up of course, and worst being a spiraling cost of chips because of an unrestrained monopoly or oligopoly of tariff-free chip production in the U.S. - like we see with EV manufacturers in the U.S. refusing to build affordable economy EVs because it’s simply more profitable if they only make luxury vehicles while the tariffs protect the market from cheap foreign EVs.
This also erodes trust in America’s support for free markets - free markets benefit nations with economic dominance, and the fact that America is being forced to rely on tariffs is evidence that American economic dominance is crumbling.
Raising tariffs to incentivize domestic production helps create jobs at the expense of corporate profit. From a Nationalist perspective, it’s a good thing.
The thing is, that assumes there is any domestic production at all which is not the case. I mean, what does he expect to happen? Intel will suddenly roll up their sleeves and fill the gap by actually making microchips in the US? First off, I don’t think they even have the industrial capability to do that, and even if Trump approves some kind of stimulus package to have them build up that capability, they’ll just use the money to do stock buybacks and pay out dividends. It’s just not gonna happen without some enforcing some major accountability on the industry’s part, which is simply not gonna happen lol
There are a few advanced fabs at various stages of completion in Arizona, but yea it’s not looking so good.
Raising tariffs to incentivize domestic production helps create jobs at the expense of corporate profit. From a Nationalist perspective, it’s a good thing.
Not when companies that have immense amounts of capital can just freely move that capital around and keep producing at a small fraction of the cost of production in the US. They’ll never go back to the US, so the question is where the demand will come from to fill the hole the US is leaving; China has been angling to massively increase domestic consumption so I think that’s probably another gift to China in that end.
Increase demand for chips before tariffs go into effect then just never enact the sanctions?
That’s the only way I can see this making sense. This has got to be a bluff, otherwise it’s total nonsense, the way I understand it
the lib refrain is ramping up: “Trump is a puppet of foreign adversaries”. He works for Russia! He works for China! He works for both! This is Voldemoard Potins master KGB plan of Stalin! like holy fuck, is it just impossible to grasp that a bunch of burger fascists are just really fucking stupid without doing the “what are we, a buncha asians”?
Literally what the fuck. He has absolutely no idea of anything going on. This move on its own will make the USA a global pariah. I mean I say that every week but holy shit whyyyyyy. NOONE IS GOING TO DO BUSINESS WITH YOU NOW.
I might hate America but I also hate incompitence.
WHAT DOES THIS ACCOMPLISH???
IS THIS ALL A
MEASURING CONTEST TO YOUSorry for yelling
I might hate America but I also hate incompitence.
I feel this so hard. Like, to some extent I even try to judge these people on their own metrics, like what are you trying to achieve and will this do it, and so often their decisions are baffling even from that view.
They’re evil, for sure, but they’re also incredibly stupid and incompetent
I hope this brings a swift death to the American empireAlso, lol, lmao, even. These people don’t even know how imperialism works
Fucking lmao if he does it and it’s not just hot air.
