LOS ANGELES (AP) – Even as he vows to promote the US with artificial intelligence research, the threat of President Donald Trump changing federal contracts with shipmakers and slaps new tariffs in the semiconductor industry is technological You may put new speed bumps before the industry.
Since taking office, Trump has said he will place tariffs on foreign production of computer chips and semiconductors to bring chip manufacturing back to the US. Sweeping Biden administration law I also wanted that We will support domestic production.
But economic experts could slow or potentially harm Trump’s double-line approach to the administration’s goal of ensuring that the US remains competitive in researching artificial intelligence. It warns that there is.
Saikat Chaudhuri, a corporate growth and innovation expert at Haas School in Berkeley, California, surprised with Chips’ Trump’s Dedication of the Chips Act, as one of the biggest bottlenecks for AI advancement is chip production. It is called a must. Chaudhuri said most countries are trying to encourage chip production and chip imports at a favorable rate.
“We’ve seen what the shortage is doing, from AI to cars,” he said. “In the pandemic, cars were involved with fewer or less powerful chips to address supply constraints.”
The Biden administration helped law shepherds after supply disruptions that occurred after the start of the Covid-19 pandemic – when Lack of tips Factory assembly line stalled Fuel supply inflation – Threatened to plunge the US economy into a recession. When pushing for investment, lawmakers also said they were worried about China’s efforts to manage Taiwan. Over 90% of advanced computer chip production.
In this photo, released by the Taiwanese President’s Office, Taiwan’s President Rai Qingte said on Friday, February 14, 2025, after a security meeting on President Trump’s tariffs and US presidential tariffs on semiconductors at the Taipei presidential office. I will give a lecture at the press conference. (Taiwan President’s Office via AP)
In this photo, released by the Taiwanese President’s Office, Taiwan’s President Rai Qingte said on Friday, February 14, 2025, after a security meeting on President Trump’s tariffs and US presidential tariffs on semiconductors at the Taipei presidential office. I will give a lecture at the press conference. (Taiwan President’s Office via AP)
Like August 2024the Chips and Science Act, which provided $30 billion in support for 23 projects in 15 states, adding 115,000 manufacturing and construction jobs, according to the Commerce Department. That funding will help withdraw private capital, allowing the United States to produce 30% of the world’s most sophisticated computer chips.
The government has promised Tens of thousands of dollars Supporting Building US chips It reduces reliance and reductions on Asian suppliers, which Washington considers as a safety weakness. In August, the Commerce Department pledged to provide up to $6.6 billion. Taiwan Semiconductor Manufacturing Co. The facility can be expanded Already built in Arizona And we will ensure that the most advanced microchips are produced domestically for the first time.
But Trump says companies that enter into these contracts with the federal government, such as TSMC, believe they “didn’t need the money” to prioritize chipmaking in the US.
“They needed an incentive, and the incentive is that they wouldn’t want them to pay at 25, 50 or 100% tax,” Trump said.
TSMC held its first board meeting in the US last week. Trump has shown that if businesses want to avoid tariffs, they must build plants in the United States without government assistance. Taiwan has also sent two senior economic affairs officials to Washington to meet with the Trump administration as it could dodge the 100% tariffs Trump threatened to impose on chips.
If the Trump administration collects tariffs, Chaudhuri said one direct concern is that the prices of products using semiconductors and chips will increase.
“Whether it’s your smartphone, whether it’s your gaming device, whether it’s your smart fridge, perhaps a smart feature in your car – we use today I have a tip on it for anything I’m doing,” he said. “For consumers, it’s going to be quite painful. The manufacturers can’t absorb it.”
Even tech giants like Nvidia will ultimately feel the tariff pain, he said, despite their margins being high enough to absorb costs at the moment.
“They all will be negatively affected by this,” he said. Except in a country where I’m competitively jumping on the bandwagon and saying, ‘What do you know, we’re trying to introduce you to something like chips’, I can’t see anyone who will benefit from this. . ”
Brethouse, a professor of professional practice at Columbia Business School, said broad-based tariffs would be a shot at the feet of the US economy. It said tariffs will not only increase costs for businesses and households across the board, but will also significantly increase the costs of high-power chips from overseas, one of the most important inputs for the US AI sector.
“If you are exerting tariffs widely based on imports of AI and other computer technologies, you will be hamstring the industry vigorously if you block, abolish or threaten the Chips Act,” House said. Ta.
Such tariffs reduce the ability to create domestic chip building sectors and send signals for future investments, making policy outlook uncertain, he said. This will have a calm effect on new capital allocations to US industries, while making existing streams of imported chips more expensive.
“The leadership of the American technology industry has always been supported by maintaining openness to global markets and immigration and labor flows,” he said. “And shutting down that openness wasn’t a recipe for American success.”
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Associated Press writers Josh Bork and Diddy Tan contributed to the report.
