(Reuters) – U.S. President Donald Trump plans to impose tariffs on imported computer chips, pharmaceuticals and steel, he said on Monday, to push firms to fabricate more in america.
The comments mark the most recent in numerous trade-related threats unleashed by Trump in recent days. He has already promised to slap 25% tariffs on imports from Canada and Mexico by Feb. 1 if the 2 countries don’t meet demands on border security and other issues.
By specializing in chips and pharmaceuticals, Trump could squeeze U.S. allies in Asia, including Taiwan, South Korea and Japan.
WHAT’S BEING TARGETED FOR CHIPS?
Trump said he plans to impose tariffs on imported computer chips without providing details.
Asia is the world’s biggest chip manufacturing hub, producing greater than 80% of semiconductors sold globally, based on the Asian Development Bank.
Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest contract chipmaker, makes semiconductors for Nvidia, Apple and other U.S. clients. TSMC generated 70% of its revenue in 2024 from customers based in North America.
While it’s constructing a $65 billion manufacturing facility in Arizona, the majority of TSMC’s production stays in Taiwan, with exports to the U.S. theoretically subject to tariffs.
WHAT ABOUT OTHER CHIPS?
Asian producers also dominate the marketplace for memory chips, with DRAM and NAND flash chips utilized in electronic devices including computers.
South Korea’s Samsung Electronics and SK Hynix together control around three quarters of the worldwide DRAM market.
The 2 firms, plus Japan’s Kioxia, which is controlled by U.S. buyout firm Bain Capital, command an identical market share in NAND flash.
Samsung is investing roughly $44 billion in chipmaking facilities in Texas with subsidies from the U.S. government.
WHAT ABOUT THE ECONOMIC HIT?
Chips are a serious source of export revenue for South Korea and Taiwan, meaning there’s quite a bit more at stake than simply the impact on manufacturers themselves.
South Korea’s exports of semiconductors hit a record $141.9 billion in 2024, of which $10.28 billion was to the U.S., based on data released by the Ministry of Trade, Industry and Energy earlier this month.
WHAT ABOUT OTHER CHIP SUPPLY CHAIN COMPANIES?
Japan is a serious supplier of chipmaking equipment and materials, all of which, a minimum of for now, appear to have avoided direct mention by Trump. Major equipment firms include Tokyo Electron and Advantest.
WHAT ABOUT PHARMA?
Imposing tariffs on imported pharmaceuticals could weigh on Japan, home of major drugmakers reminiscent of Takeda, Astellas, Daiichi Sankyo and Eisai, which has been expecting strong sales growth within the U.S. of its Alzheimer’s disease drug Leqembi.