Trump's Tariffs Vs. Tech: Could This Backfire On The US Economy?

As the U.S. battles to bring chip production home, will tariffs spark innovation—or simply cost more in the long run?

Semiconductors—those tiny chips inside your phone, laptop, car, and even pacemaker—have become the new battleground in global politics. With President Trump expected to impose sweeping new tariffs on imported semiconductors, the U.S. is drawing a hard line on tech dependence. But is America prepared for a chip-making revolution?

The arguments

National Security First

Trump and his team argue that relying on foreign chips, especially from geopolitical rivals like China, is a national security risk. Tariffs are meant to encourage U.S.-based production and reduce dependency.

Environmental and Economic Concerns

Critics warn that ramping up domestic manufacturing won’t be easy—or clean. Chip production is resource-heavy, and experts caution that tariffs could raise tech prices, slow innovation, and strain global supply chains.

Skilled Labour Shortage

Even with funding, the U.S. struggles to scale up chip-making due to a lack of skilled workers. TSMC had to fly in thousands of engineers from Taiwan to staff its U.S. factory—a red flag for self-sufficiency.

The facts

What are Semiconductors?

Also known as microchips or integrated circuits, semiconductors are small electronic components made from materials like silicon. They’re essential for enabling devices to process information using binary code. You’ll find them in everything from smartphones and laptops to wind turbines and medical implants.

Who Makes Them?

Taiwan leads the global semiconductor supply, with Taiwan Semiconductor Manufacturing Company (TSMC) alone providing over 50% of the world’s chips. South Korea’s Samsung is another major player. The U.S., UK, Europe, and China all rely heavily on these foreign suppliers.

Trump’s Tariff Plan

As part of his push for economic independence, Trump plans to introduce tariffs on imported semiconductors. The White House recently exempted smartphones and computers, but semiconductors might soon face duties as high as 125%, especially those sourced from China.

U.S. Strategy to Build at Home

Through the CHIPS Act, the U.S. has funnelled billions into domestic chip production. TSMC received $6.6 billion to build a plant in Arizona, though delays from skilled labor shortages have slowed progress.

Trump’s proposed tariffs mark a bold attempt to reshape the global tech landscape, but the road to semiconductor independence is steep. As the U.S. battles to bring chip production home, will tariffs spark innovation—or simply cost more in the long run?