Trump hints at higher semiconductor tariffs. Companies could

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Dow Jones NewsAug 15, 4:07 PM UTC
MW Trump hints at higher semiconductor tariffs. Companies could dodge them by doing this.

By Robert Schroeder and Emily Bary

 

Trump suggested steep chip-industry tariffs are coming, but there could be breaks for companies that invest in the U.S. Specifics are still sparse.

 

President Donald Trump boards Air Force One on Friday at Joint Base Andrews, Md. He told reporters aboard the plane that he'll announce tariffs on semiconductors in the coming weeks.

 

Tariffs on semiconductors could be coming in the next two weeks, President Donald Trump said Friday, as he made his latest threat of levies against the industry. But a number of prominent U.S. chip companies may be able to dodge them.

 

Trump spoke to reporters aboard Air Force One en route to Alaska, where he is scheduled to meet with Russian President Vladimir Putin.

 

"I'll be setting tariffs next week and the week after, on steel and on, I would say, chips, chips and semiconductors," he said.

 

The U.S. has already imposed levies of 50% on steel and aluminum, so it's possible Trump misspoke.

 

But Trump's comments on semiconductors SMH came a little more than a week after his threat to slap 100% tariffs on those products, a statement he made at the White House on Aug. 6. Now he's saying the tariffs could be as high as 200% or 300%.

 

That number tracks with his recent threat to hit drug XPH imports with levies of 250%. But there's a catch for the chip industry, as Trump is saying that companies could avoid higher tariffs by building domestically.

 

Read: Why Nvidia and other chip stocks are shrugging off Trump's latest tariff threat

 

"I'm going to have a rate that is going to be lower at the beginning, then that gives them a chance to come in and build, and very high after a certain period of time," he said.

 

The PHLX Semiconductor Index SOX was off 1.9% in Friday morning action, though there are various potential contributors to that move, including disappointing guidance from chip-equipment maker Applied Materials Inc. (AMAT) after Thursday's close.

 

Among the index's biggest gainers are some domestic chip makers, such as Intel Corp. (INTC), which may separately end up the beneficiary of financial assistance from the Trump administration, as well as GlobalFoundries Inc. (GFS) and Texas Instruments Inc. (TXN)

 

Nvidia Corp. (NVDA) outsources production of chips to Taiwan Semiconductor Co. Ltd. (TSM), but analysts think Taiwan Semi might get an exemption, as the company has operations in Arizona as well as Taiwan.

 

The company is "likely exempt from Section 232 tariffs given its U.S. investment plans," Wolfe Research analyst Chris Caso wrote last week, meaning that companies like Nvidia and Advanced Micro Devices Inc. (AMD) could be spared via their work with Taiwan Semi. That potentially limits the risk for those companies, though Caso didn't think that Taiwan Semi's leading-edge chip customers would be at a relative advantage over one another since they'd all stand to benefit.

 

Bernstein's Stacy Rasgon added last week that there seemed to be various logistical questions, including whether Taiwan Semi would get a break for all its manufactured products, due to the fact that it's made a U.S. commitment, or whether the reprieve would just apply to output from Arizona. If the latter, he struggled to see why customers would choose to have their chips made in Arizona since untariffed chips out of Taiwan would be cheaper to produce.

 

Caso cautioned at the time that what constitutes a substantial investment in Trump's eyes "is obviously subjective, which makes for difficult analysis." Rasgon reacted similarly, saying that a "raw reading" of last week's comments "suggests companies 'committing to build' in the U.S. will bespared, but without further color it is hard to know exactly what this means."

 

-Robert Schroeder -Emily Bary

 

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08-15-25 1207ET

 
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