From Yahoo Finance: 2025-04-01 05:54:00

On 24 March, President Trump announced a $5bn automotive plant investment in Louisiana, hinting at future tariffs. Two days later, he unveiled 25% global tariffs on all automotive imports as part of his strategy to re-shore manufacturing lost to globalisation.

Expect more tariff announcements on 2 April, dubbed Liberation Day by Trump, as the US shifts towards trade protectionism. The tech industry braces for impact, especially following Trump’s February hint at imposing a “25% or higher” tariff on all imported semiconductors.

Tech industry leaders warn that imposing tariffs on semiconductors could backfire for the US, harming its own supply chain. While some see it as a way to rebalance global trade, others fear it will raise costs for US consumers and distort global supply chains.

The dynamics of the global semiconductor supply chain have become complex and geopolitical. The US recently added over 50 Chinese tech companies to its export blacklist to curb China’s tech advancement, particularly in AI and semiconductor production.

The Biden-era US CHIPS ACT aimed to encourage foreign chip makers like Taiwan’s TSMC to invest in US chipmaking capacity. TSMC’s $65bn investment in US semiconductor fabs in Arizona is the largest foreign direct investment project in US history.

Repealing the CHIPS ACT weakens the argument for tariffs to boost US semiconductor production. The US Semiconductor Association warns that tariffs could raise costs for producing American semiconductors and critical technologies like AI.

As Liberation Day approaches, uncertainty looms over which countries and industries will face increased tariffs. Semiconductor companies like NXP and Arm are closely monitoring the situation, ready to adapt to potential impacts on their businesses.

Experts caution that Trump’s tariff threats may be a negotiation tactic rather than a concrete plan. The risk of market turmoil and disruption to the global semiconductor supply chain looms large if tariffs are implemented without careful consideration.

Read more: What would Trump tariffs on semiconductors mean for the tech industry?