Trump plans 100% tariff on computer chips, unless companies build in US
[August 07, 2025] By
JOSH BOAK and MICHAEL LIEDTKE
WASHINGTON (AP) — President Donald Trump said Wednesday that he will
impose a 100% tariff on computer chips, raising the specter of higher
prices for electronics, autos, household appliances and other essential
products dependent on the processors powering the digital age.
“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. "But if you’re building in the United States of America,
there’s no charge."
The announcement came more than three months after Trump temporarily
exempted most electronics from his administration's most onerous
tariffs.
The Republican president said companies that make computer chips in the
U.S. would be spared the import tax. During the COVID-19 pandemic, a
shortage of computer chips increased the price of autos and contributed
to higher inflation.
Investors seemed to interpret the potential tariff exemptions as a
positive for Apple and other major tech companies that have been making
huge financial commitments to manufacture more chips and other
components in the U.S..
Big Tech already has made collective commitments to invest about $1.5
trillion in the U.S. since Trump moved back into the White House in
January. That figure includes a $600 billion promise from Apple after
the iPhone maker boosted its commitment by tacking another $100 billion
on to a previous commitment made in February.
Now the question is whether the deal brokered between Cook and Trump
will be enough to insulate the millions of iPhones made in China and
India from the tariffs that the administration has already imposed and
reduce the pressure on the company to raise prices on the new models
expected to be unveiled next month.
Wall Street certainly seems to think so. After Apple's stock price
gained 5% in Wednesday regular trading sessions, the shares rose by
another 3% in extended trading after Trump announced some tech companies
won't be hit with the latest tariffs while Cook stood alongside him.
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President Donald Trump makes an announcement about Apple in the Oval
Office, Wednesday, Aug. 6, 2025, in Washington. (AP Photo/Alex
Brandon)
 The shares of AI chipmaker Nvidia,
which also has recently made big commitments to the U.S., rose
slightly in extended trading to add to the $1 trillion gain in
market value the Silicon Valley company has made since the start of
Trump's second administration.
The stock price of computer chip pioneer Intel, which has fallen on
hard times, also climbed in extended trading.
Inquiries sent to chip makers Nvidia and Intel were not immediately
answered. The chip industry's main trade group, the Semiconductor
Industry Association, declined to comment on Trump's latest tariffs.
Demand for computer chips has been climbing worldwide, with sales
increasing 19.6% in the year-ended in June, according to the World
Semiconductor Trade Statistics organization.
Trump's tariff threats mark a significant break from existing plans
to revive computer chip production in the U.S. that were drawn up
during the administration of President Joe Biden.
Since taking over from Biden, Trump has been deploying tariffs to
incentivize more domestic production. Essentially, the president is
betting that the threat of dramatically higher chip costs would
force most companies to open factories domestically, despite the
risk that tariffs could squeeze corporate profits and push up prices
for mobile phones, TVs and refrigerators.
By contrast, the bipartisan CHIPS and Science Act that Biden signed
into law in 2022 provided more than $50 billion to support new
computer chip plants, fund research and train workers for the
industry. The mix of funding support, tax credits and other
financial incentives were meant to draw in private investment, a
strategy that Trump has vocally opposed.
—
Liedtke reported from San Ramon, California.
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