The Trump administration is considering a new tariff plan that would target foreign electronic devices based on the number and value of semiconductor chips they contain, according to people familiar with the discussions. The proposal, which remains under review and subject to change, would have the Commerce Department impose tariffs as a percentage of a product’s estimated chip content.
White House spokesperson Kush Desai defended the initiative, stressing that the U.S. cannot remain dependent on foreign semiconductors, which are critical to both national security and economic stability. He noted that the administration is pursuing a broader reshoring strategy involving tariffs, tax cuts, deregulation, and energy expansion to encourage manufacturing in the United States.
If enacted, the policy would affect a wide range of consumer products—from everyday items like electric toothbrushes to high-value electronics such as laptops—raising concerns that it could increase consumer prices at a time of already elevated inflation. Michael Strain, an economist with the American Enterprise Institute, warned that the move would likely accelerate inflation, which currently sits above the Federal Reserve’s 2% target. Even U.S.-made goods could become costlier, as tariffs on imported components would drive up domestic production expenses.
Reports suggest the Commerce Department is weighing a 25% tariff on chip-related imports, with slightly lower rates, around 15%, for electronics from Japan and the European Union. Officials have also floated the idea of exemptions tied to U.S. manufacturing investments, but details remain unclear. While tools used to make chips may be exempt to avoid undermining domestic production, sources say the White House has expressed skepticism about too many carve-outs.
Major foreign chipmakers like Taiwan Semiconductor Manufacturing Co. (TSMC) and Samsung Electronics could be among the hardest hit, though companies manufacturing or committing to manufacture in the U.S. may qualify for exemptions.
With tariffs on pharmaceuticals and trucks already announced, this potential policy highlights Trump’s escalating trade agenda and its significant implications for global supply chains, consumer prices, and the semiconductor industry.