Trump is still considering tariffs for Taiwanese chips despite $ 100 billion TSMC deal

Second, tariffs can make foreign companies start producing chips in the United States if they become more expensive than doing it somewhere else. But the higher American labor costs and the lack of an advanced semiconductor supply chain means that it will take years, if not decades, and there is a small guarantee that such American advanceds will be profitable. Faced with US tariffs, this may have a bigger sense of Taiwanese companies like TSMC to simply move production to a third country instead of avoiding their payment.

But the Trump administration can choose to expand tariffs for all countries, effectively making US production in the only viable alternative. It can alternatively apply tariffs for all end -of -the -product that contain Taiwanese chips.

The latter idea would be a significant interruption of the semiconductor industry. A smartphone may have dozens of chips within a number of different features; The car can potentially have thousands. Inventing which of them has components from Taiwan, how much these components should be taxed and how difficult it can be found to be replaced would put a lot of weight for the end products.

Semiconductor companies are probably unprepared for such a scenario, especially since their products have been spared mainly by the rates in the past. “The industry around the world has never dealt with chip fares before,” says Taiwan-based semiconductor industry, which publishes public comments under the nickname HSU Mei-Hu. “It is theoretically possible, but almost impossible in practice.”

Policy will force companies like Apple to ask each of their suppliers for the cost of the many types of chips it uses just to determine the appropriate amount of tariffs to declare. “And after being announced, how do customs inspect it? If I just put any value, how would you know customs? “Says HSU.

Earlier, the Biden administration discussed the use of components for Chinese chip manufacturers to weaken the country’s semiconductor industry and to protect the US national security. But one of the main arguments against the idea was that it would be logistically difficult to implement, Miller says.

Miller says that this time component tariffs are certainly re -examined in Washington, but it would be even more challenging to apply them to the import of Taiwanese chips, as they play a much wider and more important role than Chinese chips. “If you have been concerned about the administrative complexity of component rates solely against China, you should be even more concerned about the administrative complexity of Taiwan,” he says.

The largest losers

TSMC is less than potential tariffs in the United States than other companies because of its unparalleled weight in the industry. Currently, TSMC is making approximately 90 percent of the most modern chips worldwide, and its production lines are currently operating with full capacity. If Trump raises tariffs and this forces TSMC to increase its prices, the company may lose some orders to competitors, but experts say this is not really a big concern.

But it will probably be difficult for TSMC customers to quickly find alternatives. Although companies such as Samsung and Intel have achieved a comparable know, to some extent in the production of high -end chips, it would be time -consuming, expensive and risky to move mature production processes from TSMC factories. So instead of going to another chip manufacturer, American companies like Apple and NVIDIA are likely to retain the TSMC products account and will ultimately deliver higher costs for their customers.