US President Donald Trump has announced plans to impose up to 100 percent tariffs on Taiwanese semiconductor imports to return ship production to American soil.
Speaking at the House Republican conference in Miami, Trump framed the tariffs as a method to encourage companies to relocate their production to the United States rather than relying on federal subsidies.
"They needed an incentive, and the incentive is going to be they're not going to want to pay a 25, 50, or even hundred percent tax," Trump stated. "They're going to build their factory with their own money."
Trump's comments continue his criticism of the Biden administration's CHIPs and Science Act, which offers subsidies to semiconductor companies to boost domestic production. Trump has proposed eliminating these subsidies with heavy tariffs, claiming that chip makers use federal assistance to establish operations outside the United States instead of strengthening the domestic supply chain.
Potential tariffs could significantly impact Taiwan's semiconductor industry, which produces more than 60% of the world's semiconductors and more than 90% of the most advanced chips required for AI and defense technology. Taiwan Semiconductor Manufacturing Company (TSMC), the world's largest contract chipmaker, has already spent $65 billion on US production, and Arizona plants are set to begin operations in the coming years.
Despite Trump's claims that these tariffs will bring production back home, analysts warn they may backfire. The Information Technology and Innovation Foundation cautions that such a move could increase costs for American consumers, strain relations with Taiwan, a key US ally, and force manufacturers to migrate to other nations rather than the US.
Taiwan's government has expressed worry, with Premier Cho Jung-tai calling an emergency meeting to explore countermeasures. "Taiwan's position in the global industrial chain is irreplaceable, and we will continue to maintain our advantage," he told reporters.
In addition to semiconductors, Trump hinted at broader tariffs on steel, aluminum, and copper to revive US manufacturing. While his land measures seek to strengthen domestic production, they risk upsetting global supply chains and escalating trade tensions.