President Donald Trump said on Wednesday that he imposes a 100% duty on computer chips and raises the spectrum of higher prices for electronics, cars, household appliances and other important products dependent on processors that operate the digital age.
“We put a duty of about 100% on chips and semiconductors,” Trump said in the oval office while meeting with Apple CEO Tim Cook. “But if you build in the United States of America, there is no charge.”
The message came more than three months after Trump temporarily exempted the most electronics for his administration’s most troublesome tariffs.
The Republican president said that companies manufacturing computer chips in the United States would be spared the import tax. During the Covid-19 pandemic, a lack of computer chips increased the price of cars and contributed to higher inflation.
Investors seemed to interpret the potential duty exemptions as a positive for Apple and other major tech companies that have made huge financial obligations to produce more chips and other components of the United States.
Big Tech has already made collective obligations to invest about $ 1.5 trillion in the United States since Trump moved back to the White House in January. This figure includes a $ 600 billion promise from Apple after iPhone Maker increased its commitment by tackling another $ 100 billion to a previous commitment made in February.
Now the question is whether the agreement that has been broken between Cook and Trump will be enough to isolate the millions of iPhones made in China and India from the tariffs that the administration has already imposed and reduces the pressure on the company to raise the prices of the new models expected to be revealed next month.
Wall Street certainly seems to believe it. After Apple’s share price rose 5% on Wednesday regular trade sessions, the shares rose by another 3% in extended trade after Trump announced that some tech companies will not be hit with the latest tariffs while Cook was standing with him.
The shares in AI chipmaker Nvidia, which have also recently made major obligations to the United States, rose slightly in expanded trade to add to a billion gain of $ 1 trillion in market value made by Silicon Valley Company since the start of Trump’s second administration.
The share price of computer chip pioneer Intel, who has fallen at hard times, also climbed in expanded trade.
Inquiries sent to chipp producers NVIDIA and Intel were not immediately answered. The Chip Industry’s most important trading group, Semiconductor Industry Association, refused to comment on Trump’s latest tariffs.
Demand for computer chips has been climbing worldwide, with sales increasing 19.6% in the year in June, according to World Semiconductor Trade Statistics Organization.
Trump’s customs threats mark a significant break from existing plans to revive computer chip production in the United States, which was prepared under the administration of President Joe Biden.
Since its acquisition from Biden, Trump has implemented tariffs to incentive more domestic production. Essentially, the president will bet that the threat of dramatically higher chip costs would force most companies to open factories domestically, despite the risk of duties pushing the company’s profits and pushing prices up for mobile phones, TVs and refrigerators.
In contrast, the Bipartisan Chips and Science Act, which Biden signed in the law of 2022, provided more than $ 50 billion to support new computer chip systems, finance research and educate workers for the industry. The mix of funding support, tax credits and other financial incentives was intended to draw in private investments, a strategy that Trump has grown opposite.
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Liedtke reported from San Ramon, California.