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Trump’s Pressure Boosts TSMC’s Semiconductor Investments in the U.S.
Former President Trump revealed at a recent event that Taiwan Semiconductor Manufacturing Company (TSMC) has committed an additional $100 billion towards semiconductor production in the United States. This announcement follows Trump’s threats of imposing tariffs, potentially as high as 100%, on TSMC if they did not establish manufacturing operations domestically. The chip manufacturer had already made prior commitments of $65 billion for U.S. chip production, along with receiving a substantial $6.6 billion subsidy under the current Biden administration, a move Trump has publicly criticized.
During the event with the Republican National Congressional Committee, Trump voiced opposition to Biden’s allocation of $6.6 billion in grants as part of the 2022 CHIPS and Science Act, aimed at bolstering semiconductor manufacturing in Phoenix. He emphasized that TSMC’s $65 billion investment was initiated before these subsidies were finalized.
In a notable development, Trump mentioned in March that TSMC’s additional investment of $100 billion resulted from his explicit warning about significant tariffs, stating, “If you don’t build your plant here, you are going to pay a big tax— 25, maybe 50, maybe 75, maybe 100%,” which he reiterated during the recent event.
TSMC, however, opted not to provide a comment to Fortune regarding Trump’s assertions.
Despite previously advocating for incentives to attract TSMC to the U.S., Trump has criticized such governmental subsidies since returning to the political arena. Recently, he sought to repeal the $52.7 billion CHIPS Act, which supports semiconductor manufacturing, facing opposition from some Republican senators who represent states benefiting from this funding.
“These chip companies are loaded. They give these companies billions of dollars to build a plant in the United States. They don’t build them in the US,” Trump stated during his address.
In another development, Trump announced a 90-day suspension of the steep tariffs he recently imposed, referred to as “Liberation Day” tariffs. This change replaces the previous structure with a 10% base tariff affecting all countries except China.
Originally, there was an exemption for semiconductors; however, the now-suspended tariffs included a 32% tax on Taiwan, which is a crucial hub for global semiconductor production. Yet, any semiconductors produced abroad and imported into the U.S. remain subject to tariffs associated with their country’s export status.
Trump has a history of employing threats of tariffs against various companies. For instance, he previously warned manufacturer John Deere of imposing 200% tariffs if they proceeded with plans to shift some operations from the Midwest to Mexico. During his first term, he similarly threatened General Motors , suggesting a reduction in federal subsidies in response to plant closures.
This article originally appeared on Fortune.com.
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