President Donald Trump dropped a bombshell this week, announcing a 100% tariff on computer chips not made in the U.S. The move, unveiled during an August 6 Oval Office event alongside Apple CEO Tim Cook, aims to push chip production stateside. But for now, it’s sparking more questions than answers and could mean higher costs for everyday goods.
The tariff, which Trump says won’t apply to companies committed to U.S. manufacturing, targets a critical piece of the tech puzzle. Chips power everything from smartphones to cars, and the U.S. imports about $60 billion worth annually, per Census Bureau data. Experts warn this could hit consumers where it hurts. “If you look at industries that need chips, it’s almost everything,” said Zac Rogers, an associate professor at Colorado State University. “You probably have at least 100 chips involved in the things you’ve done today.”
Details are murky no start date or specific product codes have been confirmed. This lack of clarity leaves companies scrambling. Here’s what we know so far:
- Broad Impact: The tariff could raise prices for laptops, cars, appliances, and even medical devices.
- Exemptions: Firms building U.S. factories, like Samsung or Intel, may dodge the tax.
- Consumer Costs: Past chip shortages, like during COVID-19, drove up car prices and fueled inflation.
Smaller chipmakers, especially in Europe and Asia, face uncertainty, as many lack the resources to build U.S. plants. “It’s not deflationary, by any means,” said Jason Miller, a supply chain professor at Michigan State University. Automakers, already stung by other tariffs, could take a hit. General Motors reported $1 billion in tariff-related losses last quarter, and Stellantis projects $1.7 billion this year. For now, consumers might brace for pricier electronics or even shortages, as some firms may cut production. “It’s a thousand cuts,” said Ivan Drury of Edmunds, noting automakers may not absorb costs forever. The full impact? That’s still anyone’s guess.
