Donald Trump announced on Wednesday that his administration would impose a 100 percent tariff on imported computer chips and semiconductors, in a move that could significantly raise the prices of electronics, automobiles, household appliances, and other technology-driven goods in the US.
Speaking from his office on August 6, Trump 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.”
The move comes just hours after the White House slapped an additional 25 percent tariff on Indian imports in retaliation for New Delhi's continued purchases of Russian oil. That brought total tariffs on Indian goods entering the US to 50 percent.
The proposed levy is expected to have wide-ranging implications across global supply chains. During the Covid-19 pandemic, chip shortages had led to soaring automobile prices and contributed to broader inflationary pressures. Analysts warn that the latest tariff could revive similar risks, particularly as global demand for semiconductors continues to surge.
According to the World Semiconductor Trade Statistics organisation, global chip sales rose 19.6 percent in the 12 months to June.
Trump’s tariff threat marks a sharp departure from current US strategies to revive domestic chip manufacturing, which have focused on subsidies and incentives. Instead, the administration is now opting for a more aggressive trade stance — effectively using punitive tariffs to force companies to shift production to American soil.
The move reflects a calculated gamble: that higher import costs will compel tech and electronics firms to invest in local manufacturing, even if it means higher prices for consumers and tighter corporate margins.
Industry experts say the impact could be particularly acute for mobile phones, TVs, refrigerators, and electric vehicles, where chip inputs are critical.
