U.S. President Announces Imminent Substantial Tariff on Semiconductors

The President of the United States recently announced during a dinner with technology leaders at the White House that a "substantial" tariff on semiconductors is imminent. The President did not provide specific details about the tariff but emphasized that companies investing in the U.S. or planning to build factories in the country could be exempt from these tariffs. The President highlighted that the tariff would be significant but not excessively high, and specifically mentioned that a prominent technology company, which has committed to investing 600 billion dollars in the U.S. over the next four years, would be in a favorable position. This announcement comes as several major semiconductor manufacturers, including those from South Korea, have already announced plans to build factories in the U.S. The President's remarks suggest a strategic move to encourage domestic semiconductor production, potentially mitigating the impact of the tariffs on companies that comply with the investment requirements. The timing of this announcement coincides with ongoing discussions about the global semiconductor supply chain and the need for increased domestic production capabilities. The President's comments indicate a focus on leveraging tariffs as a tool to incentivize investment in the U.S. semiconductor industry, which is crucial for technological advancements and national security. The implications of this policy could be far-reaching, affecting both domestic and international semiconductor manufacturers and potentially reshaping the global semiconductor market landscape.

During the dinner, the President used the terms "substantial" and "imminent" to describe the upcoming semiconductor tariff, sending a clear signal to the market. Although specific details such as the tax rate, effective date, or the range of products covered were not disclosed, the language itself could raise concerns about a new round of trade friction. The President revealed that discussions on the tariff had taken place with some of the technology company executives present. Notably, the President mentioned a prominent technology company, indicating that its CEO would be in a favorable position after the tariff is implemented. This suggests that companies with significant investments in the U.S. may be exempt from the tariff. In August, the President had previously announced plans to impose a 100% tariff on semiconductor products, with exemptions for companies that manufacture in the U.S. Following this announcement, the CEO of the prominent technology company and the President jointly announced a new 1000 billion dollar investment plan. This plan includes launching new manufacturing initiatives and collaborating with multiple U.S. companies to produce all iPhone and watch glass covers in the U.S. The President stated that the company would build the world's largest smart glass production line in the U.S. The President's remarks during the dinner serve as a further indication of the impending semiconductor tariff, highlighting the strategic importance of domestic semiconductor production for technological advancements and national security. The policy aims to incentivize investment in the U.S. semiconductor industry, which could have significant implications for both domestic and international manufacturers, potentially reshaping the global semiconductor market landscape.