Trump Says He Will Impose 100% Tariff on Imported Computer Chips but Spares Companies Investing in the US

President Donald Trump has announced plans to impose a 100% tariff on computer chips, potentially leading to increased costs for electronics, automobiles, home appliances, and other essential products that rely on these processors in today’s digital world.

“We’ll be putting a tariff of approximately 100% on chips and semiconductors,” Trump said in the Oval Office while meeting with Apple CEO Tim Cook on Wednesday. “But if you’re building in the United States of America, there’s no charge.” The announcement comes more than three months after Trump had temporarily exempted most electronic products from his administration’s harsh tariffs and on a day Apple said it will manufacture microchips in the US.

Trump Makes Things Expensive

The Republican president said that the import tax would not be applicable to companies producing computer chips within the United States. During the Covid-19 pandemic, a chip shortage led to rising car prices and played a role in driving inflation higher.

Investors appeared to view the possible tariff exemptions as a positive sign for Apple and other leading tech firms that have been heavily investing in expanding chip and component manufacturing in the U.S.

Since Trump’s return to the White House in January, major tech companies have collectively pledged around $1.5 trillion in U.S. investments.

That total includes a $600 billion pledge from Apple, which increased its earlier February commitment by an additional $100 billion.

The key question now is whether the deal negotiated between Apple CEO Tim Cook and Trump will be sufficient to shield the millions of iPhones manufactured in China and India from the tariffs already enacted by the administration—and whether it will ease the pressure on Apple to hike prices on the new models set to launch next month.

Apple Rallies After Trump Announcement

Wall Street appears optimistic. Apple’s stock jumped 5% during regular trading on Wednesday and climbed another 3% in after-hours trading, following Trump’s announcement that some tech firms would be exempt from the new tariffs, with Cook appearing alongside him.

Shares of AI chipmaker Nvidia, which has also recently made large-scale investments in the U.S., saw a modest uptick in after-hours trading, further contributing to the company’s $1 trillion increase in market value since the beginning of Trump’s second term.

Even Intel, the iconic chipmaker that has faced recent challenges, saw its stock rise in extended trading.

So far, the Semiconductor Industry Association—the leading trade group for the chip sector—has declined to comment on Trump’s latest round of tariffs.

Global demand for semiconductors continues to surge, with sales up 19.6% year over year in June, according to data from the World Semiconductor Trade Statistics organization.

However, it remains unclear how many chips, or which countries of origin, will be affected by the new import tax.