Trump is putting more pressure on foreign chipmakers with new threat of 300% tariffs

U.S. President Trump is planning on pushing even more tariffs on semiconductors to put more pressure on foreign firms to build in America. The figure is now said to have climbed from 100% last week to 300%, and is set to be put into effect in the coming weeks.

Trump’s threats are likely to force companies to move to the U.S. to avoid losing clientele to local firms

Talking to journalists aboard Air Force One, Trump stated that he is “going to have a rate that is going to be 200%, 300%.” Twice in two weeks now, the U.S. President has put uncertainty into the supply chain in what looks like a way to “force” faster decisions from the companies.

Last week’s tariff hike plans from the U.S. have already put chipmakers in a position to make a decision to either abandon clientele in the U.S. or to shift their production lines to American soil. Either way, large companies like TSMC, Apple, and NVIDIA have been exempt because of sufficient investment in the country.

In a bid to quickly build local manufacturing lines, the President seems confident that the “threat” of high tariffs will push companies to move to the U.S. Trump has also said that he plans on keeping rates low in the early stages, allowing chipmakers to come and build first.

We reported last week that the mere threat of 100% tariffs has made companies directly negotiate the best possible outcome, since the tariffs would be exempt for chipmakers building from within the U.S. The industry is in somewhat of a “wait and see” mode, and such statements give rise to a lot of volatility in the market.

Earlier today, semiconductor equipment maker Applied Materials’ stock fell 14% on the news of increasing tariff rates. Micron, which manufactures chip memory, also saw a 5% drop in share prices.