Trump Plans New Tariffs on Semiconductors amid Trade Policy Shift

Monday 14 April 2025 - 14:10

By: Zahouani Ilham

Trump Plans New Tariffs on Semiconductors amid Trade Policy Shift

In a significant shift in trade policy, U.S. President Donald Trump announced on Sunday that new tariff rates on imported semiconductor chips will be revealed in the coming week. While some flexibility may be granted to certain companies, the announcement signals that previous exemptions for smartphones and computers may soon end.

Speaking aboard Air Force One, Trump emphasized the need to simplify trade by encouraging domestic production of semiconductors and electronics. "We want to make our chips and semiconductors in our own country," he said, hinting that flexibility could be shown in specific cases, though he did not confirm whether smartphones would remain exempt.

Earlier, Trump launched a national security investigation targeting the semiconductor industry and the broader electronics supply chain. This move followed the White House’s recent decision to exclude select products, including laptops and smartphones, from the steep reciprocal tariffs on Chinese goods, sparking optimism in the tech sector.

However, Commerce Secretary Howard Lutnick made it clear that critical technologies from China including semiconductors will face new tariffs within two months. Lutnick revealed that these will be “special focus” duties targeting smartphones, computers, and pharmaceutical goods, separate from the broader reciprocal tariffs, which recently rose to 125%.

These shifting policies have created market instability. The S&P 500 has dropped over 10% since Trump took office, and recent volatility is being compared to the market turmoil of the COVID-19 pandemic. Investors and analysts have voiced concerns over inconsistent messaging and the potential economic fallout.

In response, China raised its own tariffs on U.S. imports to 125% and stated it was assessing the effect of the latest exclusions. Chinese officials stressed that the current conflict can only be resolved by the initiator implying Washington.

While investor Bill Ackman called for a 90-day pause on tariffs to ease disruptions, others like strategist Sven Henrich criticized the administration’s unpredictable approach. Senator Elizabeth Warren labeled the tariff strategy as chaotic and damaging.

Despite calls for clarity, White House officials reaffirmed their willingness to negotiate with allies but excluded China from active talks. Trade Representative Jamieson Greer expressed hope for reaching deals with several countries soon but confirmed no immediate plans for a direct conversation between Trump and Chinese President Xi Jinping.

Economists like Ray Dalio warned that the ongoing tariff battles could tip the U.S. into a recession, highlighting the high stakes of the administration’s evolving trade strategy.