President Donald Trump on Wednesday affirmed his intention to slap a 100 percent tariff on semiconductors and other computer chips that are imported into the United States, though he promised to carve out exemptions for tech firms like Apple that have committed to increasing their investment in U.S.-based manufacturing and jobs.
The announcement was made during an Oval Office meeting at the White House attended by Apple Chief Executive Officer Tim Cook and others, during which Trump laid out his plan to increase prices for computers and other consumer electronic goods that use components manufactured overseas.
A wide range of electronics will be affected by the semiconductor tariff, given the hardware’s prominence in hundreds of consumer devices on the market today. Those electronics include:
- Air conditioners
- Air purifiers
- Alarm clocks
- Baby monitors
- Blood pressure monitors
- Cable and satellite TV set-top boxes
- Calculators
- Car stereo systems
- Clothes washers and dryers
- Dash cameras
- Digital cameras
- Dishwashers with smart features
- Drones
- e-Book readers, like the Amazon Kindle
- Electric scooters and bikes
- Fitness equipment, including treadmills and ellipticals
- Fitness trackers
- Game consoles
- GPS navigation devices
- Headphones
- Hearing aids
- Home assistants, including smart speakers
- Home audio equipment, including TV soundbars
- Home security cameras
- Induction stoves, ovens, ranges and other cooking appliances
- Laptops
- Modems and routers, used for Wi-Fi and computer networking
- Printers
- Radar detectors
- Smart doorbells
- Smart light bulbs
- Smart bathroom scales
- Smart televisions
- Smart thermometers
- Smart thermostats
- USB chargers
- Virtual reality headsets
- Wireless charging pads and bricks
Congress tried to spur more U.S. manufacturing of semiconductors and computer chips in the U.S. through the passage of the CHIPS & Science Act three years ago. The bipartisan effort provided $6.6 billion in federal grant money to the Taiwan Semiconductor Manufacturing Company (TSMC), one of the biggest producers of computer chips and related hardware, with the goal of furthering stateside production of critical components for computers and consumer electronic devices.
Overall, the CHIPS Act provided more than $50 billion in federal money to various companies with the goal of investing more in domestic manufacturing of computer components. Trump has been an outspoken critic of the law, arguing tariffs were a more-effective way to increase U.S.-based manufacturing. Earlier this year, he attempted to rally Congressional Republicans to unwind the CHIPS Act, though most Republican lawmakers said the effort wouldn’t change things since the grant money was already spent.
The threat of tariffs has already spurred some companies like Apple into making promises of further stateside investments. Apple and many of its peers have already committed to increasing domestic investments; the Wall Street Journal puts the dollar amount on these pledges at roughly $2 trillion, assuming they actually bear out.
Americans are among the world’s biggest buyers of consumer electronics, but that status could be seriously challenged by the reality that tariffs on computer components will lead to rising prices in the coming months.
Manufacturing experts say it is virtually impossible to build a device like Apple’s iPhone or Google’s smartwatches entirely in the U.S. today, given the diversity of the current supply chain, which relies on components made and shipped from various countries around the world.
During the first Trump administration, Apple managed to sidestep the threat of tariffs by promising to build one of its Mac computers at a manufacturing plant in Texas, using parts that were entirely sourced from the United States. That promise ultimately faded away because Apple was unable to source enough tiny screws needed for the computer, and redesigning the computer in a way that allowed it to be built without those screws would have added serious costs to the computer’s already-staggering $3,000 price tag.
