Trump Considers Tariffs Over Subsidies for Chip Manufacturing in the U.S.

Former President Donald Trump is advocating for tariffs instead of subsidies to encourage semiconductor companies to manufacture in the United States. He criticized the CHIPS Act, a $52.7 billion subsidy program, stating that it doesn't guarantee spending. Trump urged House Speaker Mike Johnson to repeal the act and use the funds to reduce national debt. Trump believes tariffs would pressure foreign companies to manufacture domestically. TSMC's plan to invest $100 billion in U.S. manufacturing, exceeding its initial pledge for three Arizona plants, supports this view. Trump suggests tariffs on Taiwan-made chips could reach 50 percent without such investments. Passed in 2022, the CHIPS Act allocates grants, tax credits, and loans to boost domestic semiconductor production. The Commerce Department has finalized over $33 billion in awards to companies like Intel, TSMC, Micron, and Samsung. Johnson, who voted against the CHIPS Act, initially considered repealing it but later suggested streamlining its purpose. Commerce Secretary Howard Lutnick supports the CHIPS Act's goal but wants careful review of the law, committing to enforce signed contracts.