Trump targets TSMC with Taiwan chip tariffs

Feature Week: Trump on telecoms

The tariffs on semiconductors could reportedly reach as high as 100%

In a speech to fellow Republicans this week, newly reinstated US President Donald Trump said that the government would be targeting the Taiwanese semiconductor industry with major tariffs in a bid to boost the US chip ecosystem.

“In the very near future, we’re going to be placing tariffs on foreign production of computer chips, semiconductors and pharmaceuticals to return production of these essential goods to the United States,” said Trump in a speech on Monday. “They left us and went to Taiwan. We want them to come back.”

Trumps focus on helping build a domestic semiconductor manufacturing industry is one shared by the previous Biden administration. The Biden government’s approach centred around the $280 billion CHIPS Act, signed into law in 2022, which provides up to $50 billion in subsidies for chip companies operating on US soil.

This subsidy programme has seen sign significant success – companies including Intel, Samsung, Micro, and TSMC have all received billions in funding to help develop new facilities on US soil.

In TSMC’s case, this is in the form of a $12 billion semiconductor factor in Arizona, supporting by a $6.6 billion CHIPS Act subsidy won last year. Since then, the semiconductor giant has pledged to build two more facilities in Arizona, bringing the company’s total planned investment to around $65 billion.

TSMC’s first Arizona plant has reportedly already begun production, but its two additional sites – planned for 2028 and 2030 – could face delays due to supply chain issues and the US’s more complex regulatory processes.

Despite this progress, Trump has argued for years that the CHIPS Act is a waste of public funds, something he reiterate in his speech this week.

“We don’t want to give them billions of dollars like this ridiculous programme that Biden has given everybody billions of dollars. They already have billions of dollars,” he said. “They’ve got nothing but money Joe. They didn’t need money. They needed an incentive. And the incentive is gonna be they’re not gonna wanna pay a 25, 50 or even a 100 % tax.”

It’s worth noting of course, that the CHIPS Act is supporting US companies too; the programmes’ biggest winner is Intel, which has received $7.9 billion in subsidies for chip projects in Arizona, New Mexico, Oregon, and Ohio.

In response to Trump’s rhetoric, the Taiwanese government was quick to release a statement saying it will consider measures to help its domestic semiconductor industry in the face of US tariffs.

“In a day or two we will urgently look at whether we need to make more cooperative plans and future assistance programs for the industrial sector,” he added. “I would like to reassure our compatriots that Taiwan’s position in the world’s industrial chain is not to be ignored, and that we will continue to maintain such an advantage,” said Cho Jung-tai, the premier of Taiwan.

In a seemingly unrelated statement earlier this month, TSMC has notes that it will be unlikely to equip its Arizona plant with the most advanced chip technology ahead of its Taiwanese facilities. This suggests that the US tech industry’s reliance on Taiwan will remain significant for the next few years, even if TSMC’s US-based facilities open on schedule.

Rapidly building a domestic and largely self-sufficient domestic semiconductor industry is no easy task, and it remains to be seen whether the Biden subsidy-based approach or Trump’s treat of tariffs will prove more effective.

The US telecoms sector is changing dramatically in 2025. Join the industry in discussion live in Dallas, Texas, at Connected America 2025

Also in Feature Week:
Trump on telecoms: The story so far
Telecom policy objectives come into focus in Trump’s first days

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