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Trump plans to impose duties on steel and semiconductor chips

U.S. President Donald trump said on Friday that he will impose tariffs on imports of steel and semiconductor chips in the coming weeks.

President Trump first gave a glimpse of his phased plans for the new duties while he was speaking to reporters as he boarded Air Force One on his way to a meeting with Russian President Vladimir Putin in Alaska.

“I’ll be setting tariffs next week and the week after on steel and on, I would say, chips,” Trump said. The president did not provide any specific rates, but he did clarify that the initial tariff rates would start lower to give companies an opportunity to establish or expand manufacturing operations in the United States before higher rates take effect.

“I’m going to have a rate that is going to be lower at the beginning – that gives them a chance to come in and build – and very high after a certain period of time,” he said. The president expressed confidence that such a structure would encourage companies to choose domestic production over importing goods at elevated costs.

Trump’s semiconductor chip tariff strategy will be phased

Trump’s proposal to increase duties on chip imports is on brand with how he has handled perceived problems, including in pharmaceuticals, where steeply increased tariffs followed initially lower figures after a set period.

These new tariffs are part of the U.S. government’s ongoing efforts to strengthen domestic manufacturing and reduce reliance on foreign supply chains. Trump in February raised tariffs on steel and aluminum imports to 25%. He announced in May that the tariff would be doubled to 50% to provide additional support for U.S.-based manufacturers.

Regarding semiconductor chips, Trump said last week that a 100% tariff would be applied to imports. However, companies that commit to building manufacturing capacity within the United States would be exempt from the new duties.

Apple Inc. recently announced an additional $100B investment in its U.S. operations.

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