As Donald Trump’s reciprocal tariff against most countries in the world came into effect on 7th August, the US President announced that he will be imposing 100% tariff on imports of semiconductors. However, he announced an exception, it will not be applicable to companies that have committed to manufacture in the USA.
“We’re going to be putting a very large tariff on chips and semiconductors,” Trump said in the Oval Office on Wednesday. He said, “So in other words, we’ll be putting a tariff of approximately 100% on chips and semiconductors. But if you’re building in the United States of America, there’s no charge.”
Trump said that there will be no impact on companies like Apple, which have committed to start manufacturing semiconductors locally. However, he warned against companies enjoying tariff exemption by promising local production but not fulfilling the commitment.
“If, for some reason, you say you’re building and you don’t build, then we go back and we add it up, it accumulates, and we charge you at a later date, you have to pay, and that’s a guarantee,” Donald Trump said.
This comes a day after the president said that the tariff on pharmaceutical products will be as high as 250%, adding that it will be raised gradually. Trump said that he will initially impose a “small tariff” on pharmaceuticals, but then in a year to a year and a half “maximum,” he will raise that rate to 150% and then 250%.
Semiconductors and Pharmaceuticals are not covered under the current reciprocal tariff regime, as they come under Section 232 of trade exemption. This provision allows the US president to impose tariffs or quotas on imports if they are found to threaten national security. Trump administration is currently reviewing whether to impose additional tariff on these products.
