Trump Eyes Tariffs Tied to Chip Count in Foreign Devices

International Business News: Washington Maps Out Radical Tariff Strategy

The Trump administration is actively considering a sweeping new tariff scheme that would impose duties on imported electronics based on the number of chips each device contains. The aim is to pressure tech companies to shift manufacturing back to the U.S., tightening control over the supply chain for semiconductors.

A semiconductor fabrication plant, central to global electronics supply chains
Image Credit: AI-Generated

Under the proposal, the Commerce Department would levy a tariff rate calculated as a percentage of the estimated chip‐content value, rather than a flat duty on finished products. This nuanced approach, still under discussion, would allow the government to penalize complex devices—from smartphones to laptops—with higher tariffs if they contain more chips. In this International Business News report the idea is framed as part of a broader “reshoring” push to make the U.S. less dependent on foreign electronics.

Tariff Mechanics and Potential Exemptions

Preliminary figures under consideration include a 25 % tariff on chip‐heavy imports. Electronics from Japan or the European Union might face slightly lower rates of around 15 %, depending on negotiations. The proposal also contemplates a dollar-for-dollar exemption: companies could reduce or eliminate the tariff by ramping up U.S.–based manufacturing so that at least half of their production occurs domestically.

However, even items made within the U.S. may be affected: key inputs and components might themselves face new tariffs, raising costs across domestic supply chains. Some sources suggest the plan could exempt chip-manufacturing tools to avoid hampering new U.S. semiconductor facilities.

Risk of Inflation and Industry Fallout

Economists warn that such tariffs risk driving up consumer prices at a time of stubborn inflation. Analysts note that the cost of goods—from toothbrushes to smart appliances—could rise significantly under a system that penalizes chip density.

Consumer electronics companies, particularly major non-U.S. chipmakers like Taiwan Semiconductor Manufacturing Company and Samsung, are closely watching the developments. A tariff scheme tied to chip volumes could force supply chain restructuring or relocation decisions.

Implications for Global Tech and Asia

For Southeast Asia and Thailand in particular, a chip-based tariff regime by the U.S. could reshape regional supply chains. Companies might reconsider investment decisions or shift manufacturing priorities to avoid punitive duties. Thailand’s electronics export sector may face new pressures to adapt in design, sourcing, or assembly.

Global tech firms may respond by adjusting their product architectures—reducing chip counts or modularizing components to minimize tariff exposure. Some might accelerate moves toward onshore or nearshore manufacturing to sidestep punitive measures.

Such a move would also intensify trade tensions. Key trading partners may view the tariff scheme as discriminatory, potentially prompting retaliatory measures or legal challenges in global trade forums.

The proposed tariff scheme, if enacted, would mark one of the boldest trade actions against electronics in decades. The stakes are high: consumers could pay more, supply chains would shift, and global trade alliances may be tested in uncharted ways. It is a gamble that reaches beyond U.S. shores and could ripple through Asia’s tech ecosystem, including Thailand’s.

This unfolding debate will test the balance between industrial policy and market stability. That tension could define the next era of global electronics trade, making it a flashpoint for business leaders and governments alike.

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