In an exclusive report published today, Reuters says that President Trump is considering “imposing tariffs on foreign electronic devices based on the number of chips in each one.” Here are the details.
Since the late-April round of “reciprocal tariffs,” Trump has threatened to impose several measures specifically aimed at curbing US companies’ reliance on foreign chip manufacturers.
During the early days of the tariff war with China, he excluded “smartphones, laptop computers, hard drives and computer processors and memory chips” from the levies, a measure Commerce Secretary Howard Lutnick said was temporary.
He claimed that a “special focus type of tariff” would soon be imposed on these products, but this never materialized. As time passed, several US officials, including Trump himself, floated different measures and tariff percentages.
Just last month, after Apple CEO Tim Cook handed Trump a golden tribute, the President said:
“We’ll be putting a tariff on of approximately 100% on chips and semiconductors. But if you’re building in the United States of America, there’s no charge even though you’re building and you’re not producing yet in terms of the big numbers of jobs and all of the things that you’re building. If you’re building, there will be no charge. So I just want everyone to know that and I didn’t even tell you that inside. We discussed the concept, but I didn’t. So it’s a big factor. So 100% tariff on all chips and semiconductors coming into the United States. But if you’ve made a commitment to build or if you’re in the process of building, as many are, there is no tariff.”
In the following weeks, the US would go on to take a 10% stake in Intel, but the 100% tariff also never materialized.
Fast-forward to this morning, the Wall Street Journal reported that the Trump administration was considering requiring domestic chip manufacturing to match imports “and would impose tariffs on those companies that don’t step up production.”
Reuters, meanwhile, just reported the tariff plan based on the number of chips inside foreign-made electronics:
According to the plan, which has not previously been reported and could change, the Commerce Department would impose a tariff equal to a percentage of the estimated value of the product’s chip content.
This new plan, as economist Michael Strain told Reuters, might increase prices even for domestically produced items, “thanks to new tariffs on key inputs needed to make those goods.”
9to5Mac’s take
As much as Trump has promised to keep Apple and other companies in the clear as long as they keep signaling domestic infrastructure investment, it is a tall order to blindly assume the rules won’t change.
Whatever tariff plan the administration finally settles on, will likely add or change the rules that have been floated in previous unconfirmed plans.
Given Tim Cook’s recent displays of obedience and submission, it is likely that Apple would get a favorable deal, if not an outright exemption. But as long as the government keeps floating different strategies, and its agenda keeps changing (e.g., Intel stake), there will be very few guarantees Apple will actually get its promised free pass.
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