Trump Demands Chip Makers Match US Production with Imports or Face Brutal 100% Tariffs

Semiconductor giants face an ultimatum—ramp up American manufacturing or get slammed with devastating import taxes.

The Production Mandate

Washington draws a hard line in the silicon sand. Companies must balance offshore chip imports with equivalent US factory output. Fail to meet domestic production targets? Prepare for tariffs hitting triple digits.

The Tariff Threat

That 100% penalty isn't theoretical—it's the maximum allowable under the proposed framework. Global supply chains would face immediate disruption as trade wars escalate. Chip prices could spike across consumer electronics, automotive, and defense sectors.

The Geopolitical Calculus

This isn't just industrial policy—it's economic warfare with China's semiconductor ambitions. Forcing production stateside reshapes global tech dominance while conveniently creating election-year manufacturing jobs.

Wall Street's already pricing in the volatility—because nothing makes traders happier than artificial scarcity driving up chip stocks while actual innovation gets tariffed into oblivion.

Industry experts say making chips 1:1 domestically isn’t easy

John Belton manages money at Gabelli Funds and owns shares in GlobalFoundries, Intel, and other American chip makers. He said the rule requiring equal production and imports would be really hard to make work.

Belton said the rule would be tough to implement and would probably take many years. He thinks it might help companies that already have factories in the U.S.

When news about this possible policy came out, stock prices went up. GlobalFoundries is the world’s third-biggest contract chip maker, and its shares jumped 5%. Intel, which has been having money problems, also saw its stock go up 5%. These two companies are some of the few chip makers that already have big manufacturing operations in America.

GlobalFoundries has its main office in Malta, New York. The company plans to spend $16 billion on expanding its factories in New York and Vermont.

The government’s push doesn’t just target American companies

U.S. Trade Representative Jamieson Greer went to Southeast Asia to talk directly to chip makers there. He met with government ministers from the Association of Southeast Asian Nations in Kuala Lumpur.

Greer told Southeast Asian semiconductor companies they need to MOVE their production to the U.S. or face punitive tariffs. His trip happened while countries in the region were trying hard to get better access to American markets. This came after Washington put tariffs of 10% to 40% on many products from the region in August.

Greer said he knows Southeast Asia is important for making chips worldwide. But he explained that worries about national security are making the Trump administration consider adding more tariffs just for chips.

After meeting with Malaysia’s trade minister, Tengku Zafrul Aziz, Greer told reporters that they need to be careful about handling international trade. He said supply chains have to return to the United States.

Three weeks before Greer’s trip to Southeast Asia, President Trump had already warned companies about what was coming. He said his administration would put a tariff on semiconductors made by companies that don’t move their production to the U.S., and it would happen soon.

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