Trump says US to levy 100% tariff on imported chips but some firms exempt

President Trump announced a plan to impose a 100% tariff on imported semiconductors, critically exempting companies manufacturing or committed to manufacturing in the United States. This initiative aims to accelerate domestic chip production, building on existing U.S. incentives, and is poised to benefit major players with U.S. investment plans (e.g., Apple, TSMC, Samsung) while potentially impacting countries without a U.S. manufacturing presence. The announcement, though not yet formalized, prompted positive market reactions for some Asian chipmakers with U.S. ties.

Analysis

The proposal to levy a 100% tariff on imported semiconductors introduces a significant potential catalyst for the reshoring of chip manufacturing to the United States, amplifying the effects of the 2022 CHIPS Act. The policy's key feature is its exemption for companies with existing or committed U.S. manufacturing, creating a clear bifurcation within the industry. This structure is poised to directly benefit large, well-capitalized firms such as Apple (AAPL), which announced a concurrent $100 billion domestic investment, and major chipmakers like TSMC (TSM), Samsung, and GlobalWafers, which have already established a U.S. presence. The immediate positive market reaction, with TSMC shares rising 4.4% and GlobalWafers jumping 10%, reflects investor confidence in these names. Conversely, the tariff threatens to be 'devastating' for export-centric semiconductor hubs like the Philippines and Malaysia, potentially eroding their competitiveness. While the announcement carries high market impact, its informal nature introduces considerable uncertainty, with key details on implementation and scope, particularly concerning chips embedded in finished devices from China, yet to be clarified.

Key Decisions for Investors

• Investors should consider overweighting semiconductor firms with established or planned U.S. manufacturing operations, such as TSMC, Nvidia, and Apple, as they are explicitly positioned to be exempt from the proposed 100% tariff.
• It is prudent to review and potentially reduce exposure to companies within the semiconductor supply chain that are heavily concentrated in nations like the Philippines and Malaysia, which lack U.S. manufacturing and face significant margin and market access risks.
• Closely monitor for a formal policy announcement, as the ultimate impact hinges on unclarified details, including the treatment of finished goods containing foreign chips and specific country-level agreements beyond what has been mentioned for South Korea, the EU, and Japan.