A major policy shift may be on the horizon for the tech world. US President Trump recently hinted that he will soon be setting new tariffs on foreign chips and semiconductors, and the proposed rates could reach as high as 200% or even 300%. This potential move puts the entire tech industry on edge, but some of the biggest players might have a way to avoid the hit.

Trump’s potential 300% chip tariff

The president has been clear about his goal. He wants to pressure global companies to build manufacturing plants in the United States. His proposed strategy is a multi-step approach. First, the tariffs would start at a lower rate, which gives companies a window to commit to domestic construction. After a set period, the rate would then “ramp up” to the massive 300% number. It’s a classic carrot-and-stick approach to try and drive investment. Trump even mentioned that new factories, including “AI factories,” are already popping up across the country to “beat the tariffs.”

A pass for companies investing in the US?

But here’s where things get interesting. Analysts believe that some companies may be able to dodge these tariffs entirely. This could be the case for tech giants like Nvidia and AMD that don’t manufacture their own chips. They rely on partners like TSMC (Taiwan Semiconductor Manufacturing Company). Because TSMC has already made a substantial investment in building new factories in Arizona, experts suggest the company could be granted an exemption.

If TSMC is exempt, it could potentially mean that all of its customers, including major US companies, would also be spared from the tariffs. This would be regardless of where their chips are made. However, there’s still a lot of uncertainty. Analysts have pointed out that what constitutes a “substantial investment” is subjective. Today, it’s unclear whether the reprieve would just apply to chips made in the US or to all of TSMC’s products.

Meanwhile, the economic winds are already shifting. Wholesale inflation has risen, which economists have linked to the early stages of these trade policies. They also expect to see more data points showing up in the Consumer Price Index soon. While these duties have brought in billions in revenue for the government, a portion of that is already showing up in the form of higher prices for consumers.

The legal system is also weighing in, as multiple challenges to the tariffs are pending in federal courts. For now, the entire tech world is watching and waiting to see what happens next. The coming weeks will be crucial as we find out how the tariffs will be implemented. Also to know which companies will be left paying the price.
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Source: ndroidheadlines.com