Trump pushes tariffs on Taiwan chips as Chinese AI rises
President Donald Trump announced the introduction of tariffs on semiconductors from overseas, mainly from Taiwan, to encourage companies to move production to the US. Trump also stated that the success of the Chinese AI model, which caused dramatic declines in the stock market, is a positive event.
"In the very near future, we intend to impose tariffs on foreign production of computer chips, semiconductors, and pharmaceutical products so that the production of these essential goods returns to the United States of America," said Trump during a speech at a gathering of Republican congressmen at his golf resort in Doral, near Miami.
Trump announces new tariffs
Donald Trump criticised his predecessor's approach, which offered subsidies to companies to encourage them to build semiconductor factories in the US. This approach benefited the world's largest semiconductor manufacturer, Taiwanese TSMC. TSMC is set to start producing its first advanced chips in Arizona in the first half of this year, while construction of a second factory is planned for 2027 or 2028.
Trump stated that 98 per cent of computer chips are produced in Taiwan, and that subsidies are not needed to move production, but rather incentives in the form of tariffs. Introducing tariffs could lead to an increase in electronics prices in the US.
Trump also referred to the new Chinese AI model DeepSeek, which was reportedly developed at a fraction of the cost of its American competitors, while matching them in quality. According to him, it is "positive" because it shows that it is not necessary to spend so much money on AI development.
Success of the Chinese giant and problems in the US
DeepSeek's success led to significant declines in the stock market valuations of tech companies, including the producer of advanced processors used in AI, the corporation NVIDIA. The company's shares fell by 17 per cent—almost 480 billion pounds—which was the largest one-day drop in market value in Wall Street's history.
The launch of DeepSeek AI, a Chinese company, should be a warning signal for our industry that we must focus on competing to win – emphasised Trump.
The president also spoke about the future of TikTok, claiming that a queue of interested parties is lining up to purchase the Chinese app. Contrary to his previous statements on the matter, Trump suggested that he would not allow the platform to remain in Chinese hands. Previously, Trump proposed that TikTok be a joint venture with 50 per cent US ownership.
