Along with threatening to impose a tariff on all goods from Canada and Mexico, Trump said this week that he also plans to impose duties of up to 100% on silicon chips imported into the US.
Some are suggesting that this would affect the price of everything Apple makes, as its chips are made in Taiwan, but that’s almost certainly not the case …
Threatened tariffs on imported chips
The Register reports that Trump threatened to set the rate as high as 100%.
“In the very near future, we are going to be placing tariffs on foreign production of computer chips, semiconductors, and pharmaceuticals to return production of these essential goods to the United States of America,” the US president said while speaking during the House Republican Issues Conference.
“The incentive is going to be they’re not going to want to pay a 25, 50, or even a 100 percent tax,” he added.
A 100% tariff would double the cost of chips imported by US companies for use in American-made electronic products. Those increased costs would then be passed on to consumers in the form of higher prices.
Unlikely to affect Apple devices
Some are suggesting that because all Apple devices contain processors made in Taiwan, as well as a whole set of other chips mostly made in China, that the Cupertino company would be hit by these tariffs.
However, the chips made by TSMC in Taiwan are then sent to countries like China, India, and Vietnam for use in devices assembled there. Those whole devices are then imported into the US.
If chip tariffs were applied to every device containing chips, that would impact a massive swathe of products, ranging from smartwatches through washing machines to cars.
This is very different from the tariffs Trump imposed on a huge range of products in his previous presidency. These taxes would indeed have hit Apple products, but the company managed to have most of its devices excluded after writing to Trump to explain the damage that would be done to the US economy.
Trump has persistently misrepresented tariffs as a tax paid by foreign companies exporting goods to the US. The reality is that they are levied on imported goods at the point of entry, and paid by the American companies and consumers who import the products.
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