Trump's Tariff Strategy: A Chip Off the Old Block

The Trump administration is contemplating new tariffs on foreign electronic devices, calculated by the number of chips they contain, to elevate domestic manufacturing efforts. According to informed sources, this plan has not been previously disclosed and remains subject to change.

The Commerce Department would levy tariffs equivalent to a percentage of the device's estimated chip content value. This move aligns with the administration's strategy to reduce reliance on foreign imports for semiconductor products essential for national and economic security, according to White House spokesperson Kush Desai.

The proposed measures could inflate consumer prices as the cost of both imported and domestically-produced items may rise due to tariffs on critical manufacturing inputs, noted Michael Strain of the American Enterprise Institute. Concerns loom about product exemptions and specific tariff rates, while the administration evaluates a dollar-for-dollar exemption for companies investing significantly in U.S. production.

(With inputs from agencies.)