How big a financial hit would Apple and its Taiwanese chip making partner TSMC take if and when U.S. President Donald Trump’s proposed tariffs take effect? The President says he will place import taxes on semiconductors and other specific imports in the near future.
Trump’s aim with the tariffs is to bring manufacturing back inside the United States. During a Monday speech at an Issues Conference at the Trump National Doral Resort in Miami, Florida, he spoke at length about tariffs.
As a C-Span video of the speech reveals, Trump first mentioned tariffs on vehicles imported from Mexico. He also discussed at length “tariffs on foreign production of computer chips, semiconductors,” and other items.
Trump said that it was a part of his bid to “return production of these goods to the United States.”
“They left us and went to Taiwan, which is about 90% of the chip business,” Trump said. “And we want them to come back,” likely referring to TSMC, the Taiwanese chip maker that Apple relies on for its chip production for its Macs, iPhones, iPads, and other devices.
Trump’s tariff approach is much different then his predecessor’s plan to return production to the U.S. President Biden’s “Chips and Science Act,” authorized approximately $280 billion in new funding to boost domestic research and manufacturing of semiconductors in the United States.
Apple chipmaking partner TSMC was awarded $6.6 billion by the U.S. Commerce Department April to build a new chip production plant in Arizona.
However, Trump doesn’t see funding like Biden’s as having the desired affect on U.S. production.
“They already have billions. They have nothing but money. They needed an incentive and it will be they will not want to pay a tax,” insisted Trump. “They will build a factory with their own money. They will come in because it’s good for them.”
Trump did not explain how much the tariffs could be on chip imports.
The Consumer Technology Association has said that Trump could impose 10% and 20% blanket tariffs, along with a 60% tariff against China. This could result in retail price increases of 10.9% for accessories, 46% for notebooks and tablets, and 26% for smartphones.
Apple would definitely take a financial hit from tariffs.