Tech industry warns Trump's planned chip tariffs could undercut US AI push
Politico reports the Trump administration may impose broad new semiconductor tariffs within weeks or months, potentially covering data centers and chip-containing products. Industry groups warn this could slow the very AI buildout the administration says it wants to accelerate.
Citing about eight sources familiar with the plans, Politico reported that the Trump administration could announce sweeping new semiconductor tariffs in the coming weeks or months. One option under discussion would extend duties beyond chips themselves to many products built with them, including gaming consoles, servers, and even used or refurbished electronics.
The Computer and Communications Industry Association (CCIA) estimated in June that such an approach could cost the US economy about $90 billion annually in lost GDP and cause roughly 20 percent of planned data center projects through 2030 to be delayed or canceled. The group also warned tariffs could push data center investment outside the US, working against the administration's own goals.
A May letter to Treasury Secretary Scott Bessent, cosigned by about 20 trade groups, cautioned that tariffs could raise prices on everyday devices such as smartphones, laptops, tablets, and vehicles at a time when household budgets are already strained.
To shield AI firms, the administration is considering relief tied to foreign chipmakers, such as Taiwan Semiconductor Manufacturing Co., investing in US production — an approach reportedly favored by Commerce Secretary Howard Lutnick. Sources said Lutnick intends to pursue a system allowing a set volume of chips to enter duty-free, with that allowance scaled to how much a company pledges to produce domestically.
Critics argue the proposed duty-free volume would fall short even of what major cloud computing firms alone require, since domestic manufacturing capacity does not yet exist at the needed scale. Talks between industry representatives and the administration have reportedly turned more negative in recent weeks.
The CCIA has urged officials to exempt semiconductors used in AI servers, lower the anticipated 25 percent tariff rate to 10 percent, and avoid double-taxing both chips and the finished products containing them.
