U.S.
Trump says he’ll put tariffs on computer chips, semiconductors, pharmaceuticals
By
The Washington Post January 28, 2025
Gerrit De Vynck and Annabelle Timsit
The Washington Post January 28, 2025
President Donald Trump speaks to reporters as he departs the White House on Friday. (Jabin Botsford/The Washington Post)
President Donald Trump said he would soon impose new tariffs on computer chips, repeating a campaign promise that if enacted could have deep impacts on the global tech industry and the geopolitical battle over AI with China.
“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 of America,” Trump said Monday at a retreat of House Republicans at his Doral golf resort in Miami.
Trump said he wanted the manufacturers of semiconductors and chips — which are used in many high-end consumer electronics and sophisticated AI-powered technology and research — to open factories in the United States and would use the threat of high taxes and tariffs to force them to relocate.
“They’re not going to want to pay a 25, 50 or even 100 percent tax,” Trump said. “If you want to stop paying the taxes or the tariffs, you have to build your plant right here in America.”
Trump criticized the Biden administration’s policy of using taxpayer money to subsidize the construction of U.S. semiconductor manufacturing facilities as wasteful and claimed many of the companies that received subsidies didn’t need them and might use the money to expand overseas.
“We don’t have to give them money. They’re going to come in because it’s good for them to come in,” Trump said.
Last year, then-Commerce Secretary Gina Raimondo (D) called Trump’s pledge to replace chip grants with tariffs “reckless,” arguing that tariffs are not enough to boost U.S. semiconductor production.
Though the United States is the global leader in designing chips, the vast majority of chip production happens overseas, particularly in Taiwan, where the high-end computer chips necessary for training and running AI models are made.
“They left us, and they went to Taiwan,” Trump said Monday. “We want them to come back, and we don’t want to give them billions of dollars.”
Taiwan’s economy ministry said Tuesday in response to Trump’s announcement that U.S. and Taiwanese technology cooperation was “mutually beneficial,” in a statement to Reuters and Taiwanese media.
“Taiwan and the U.S. semiconductor and other technology industries are highly complementary to each other, especially the U.S.-designed, Taiwan-foundry model, which creates a win-win business model for Taiwan and U.S. industries,” the ministry said, adding that it “will continue to pay attention to U.S. policy going forward.”
It is not clear when Trump’s suggested plan of tariffs on foreign producers of chips and semiconductors might be implemented. The White House did not immediately respond to a request for comment early Tuesday.
Trump has threatened tariffs on at least a half-dozen countries since taking office.
Over the weekend, Trump put 25 percent tariffs on all Colombian imports after Colombia’s President Gustavo Petro said he had denied entry to U.S. “military planes” carrying Colombian migrants, stating that deportations should be carried out with “dignity and respect.” (The White House later said Petro backtracked and the tariffs would be held “in reserve.”) He has also threatened tariffs against China, Mexico, Canada, Russia and Denmark.
Trump’s embrace of tariffs as a political and economic tool has been cheered on by his supporters, although some experts have warned that tariffs could raise prices for consumers, or encourage countries to build workarounds to U.S. tariffs.
Trump also said Monday that the technical breakthroughs made by Chinese AI startup DeepSeek should spur U.S. companies to compete harder to maintain the United States’ lead in artificial intelligence technology.
DeepSeek’s AI tech has sent shock waves through Silicon Valley and Wall Street, after the company claimed that its AI chatbot that rivals the capability of OpenAI’s ChatGPT cost just $6 million to train, a fraction of what top U.S. AI companies use to develop their programs.
“The release of DeepSeek AI from a Chinese company should be a wake-up call for our industries that we need to be laser-focused on competing to win because we have the greatest scientists in the world,” Trump said.
DeepSeek’s apparent breakthrough in making much more efficient AI could be a positive because the tech is now also available to U.S. companies, he added.