Trump Administration Imposes Tariff on Advanced Semiconductor Products

New Tariff Policy Aims to Boost US Manufacturing

The Trump administration has introduced a 25% tariff on select advanced semiconductor products, including high-end AI chips from major manufacturers like Nvidia and AMD. This move, announced through a new national security directive signed on January 14, 2026, marks a significant step in the administration's efforts to strengthen domestic chip production and reduce reliance on foreign manufacturers.

Scope and Exemptions

The tariff specifically targets advanced AI chips while providing exemptions for certain categories. Chips imported for data center development, startup companies, non-data center consumer applications, and civilian industrial applications are excluded from the tariff. The US Commerce Secretary has been granted broad authority to implement additional exemptions as needed.

Background and Implications

This policy follows previous trade measures implemented by the Trump administration, including broad tariff announcements in September and investigations into drug and semiconductor imports in April 2025. The current tariff policy aims to address what the administration describes as significant economic and national security risks stemming from the US's heavy reliance on foreign chip production. Currently, the US manufactures only about 10% of its semiconductor needs domestically.

Industry Impact

Major US chip designers like Nvidia, AMD, and Intel, while affected, have significant global supply chains that may mitigate the immediate impact. Many of their products are manufactured overseas by companies like Taiwan Semiconductor Manufacturing Co (TSMC). The new tariff policy represents a complex balancing act between protecting domestic industry and maintaining global supply chain stability.