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Trump Proposes Tariffs on Foreign Technology and Pharmaceuticals
Former President Donald Trump has announced plans to impose tariffs on foreign-produced computer chips, semiconductors, and pharmaceuticals, specifically targeting regions such as Taiwan. His remarks were made during a speech at the House GOP Issues Conference held in Miami.
During his address, Trump expressed skepticism about the necessity of financial incentives to entice U.S. manufacturers to establish chip production facilities domestically. He indicated intentions to dismantle President Joe Biden’s subsidy program, which provides financial support to companies like Intel for building production plants in the U.S.
The implications of implementing these tariffs could be substantial. The Consumer Technology Association (CTA), a key advocacy group for the electronics sector, cautioned that such tariffs might cause significant price increases across various consumer electronics, potentially elevating the cost of game consoles to around $1,000.
“In the very near future, we’re going to be placing tariffs on foreign productions of computer chips, semiconductors, and pharmaceuticals to return production of these essential goods to the United States of America,” Trump declared. He pointed out that Taiwan currently dominates the chip manufacturing sector, contributing to 98% of the market.
Trump criticized the CHIP & Science Act, which authorized $52 billion in subsidies designed to promote domestic semiconductor manufacturing. Companies like Intel, TSMC, Coherent, and Analog Devices have benefited from this initiative under the Biden administration.
“Give everybody billions of dollars. They already have billions of dollars. They’ve got nothing but money, Joe. They didn’t need money,” Trump stated, advocating that the focus should be on creating disincentives through tariffs rather than providing financial giveaways.
I reached out to the Semiconductor Industry Association (SIA) to obtain their perspective but anticipate a negative response to Trump’s proposals.
In contrast to Trump’s tariff proposal, the SIA recently emphasized the potential of the Chips and Science Act in bolstering American manufacturing. They assert that the act has catalyzed substantial investment in the semiconductor sector and is key to driving job creation and economic growth.
According to the SIA, since the introduction of the Chips and Science Act, companies within the semiconductor industry have announced 90 new projects across 28 U.S. states, representing investments totaling hundreds of billions of dollars. These initiatives are expected to generate over 58,000 jobs in the semiconductor sector, along with additional employment opportunities throughout the broader U.S. economy.
A report by the SIA and Boston Consulting Group published last May projected that the United States is on track to triple its semiconductor manufacturing capacity by 2032. This increase is anticipated to be the most significant worldwide, with the U.S. poised to capture approximately 28% of global capital expenditures from 2024 to 2032.
The CTA also calculated that the proposed tariffs could elevate prices significantly, estimating a 46% rise in costs for laptops and tablets, a 40% increase for game consoles, and a 26% hike for smartphones.
Source
venturebeat.com