Trump’s chip tariff threat leads to pushback from the automotive industry to technology

A potential collection of up to 25% has been announced by unified rivals such as Tesla Inc., General Motors Co. and Ford Motor Co. We have gathered industry lobbies for the Crypto Council for Innovation for National Marine Manufacturers Association. Even Taiwan and the People’s Republic of China are finding common causes along with predictable parts of the high-tech sector, such as chip makers and wireless providers.

The reason is that chips are now almost everything. Refrigerators and microwaves, tire pressure sensors and navigation systems, electronic bidets and sonar equipment, and of course smartphones and computers. Tariffs are threatening to jack up supply lines and consumer costs.

“There is a big discrepancy between the amount of chips used in this country in the various products and the amount of supply created here,” Joanne Feeney, partner and portfolio manager at Advisors Capital Management, said in an interview. “Taxing these imports simply increases costs. That’s not good for consumers.”

The right case is the Marine Association, warning that more than 1,300 manufacturers who are expensive to use for essentials such as propulsion technology, engines and GPS systems are feeling the impact.

“These systems are not an option luxury, they are fundamental to safety, functionality and performance,” the association states. “Many components have no equivalent to the US and are available only from highly concentrated overseas suppliers.”

The boat sector concern was one of the comments from 154 stakeholders submitted to a Commerce Department review of whether to slap the tariff on chips as part of Trump’s campaign to redraw global supply lines and boost domestic manufacturing. While predictable technology sources, including Chipmakers Taiwan Semiconductor Manufacturing Co. and Intel Corp., have shown weight, feedback has also landed from a wide range of sectors, along with trading partners such as Japan and Brazil.

Companies, trade groups and individuals who commented on the Chips investigation have largely shown support for the president’s vision to deepen US manufacturing bases and expand the American workforce. However, most people expressed concern about potential outcomes and urged them to create as much targeted challenges as possible.

In summary, filing points to anxiety in a variety of industries about the economic fallout from targeting chips. Trump has cited the plan so far by various companies to invest in the US, including the Taiwan-based TSMC’s decision to dispel many of these concerns and increase its commitment to building plants near Phoenix.

White House spokesman Kush Desai said Trump remains committed to repurposing manufacturing, which is critical to US national security. “While the Commerce Department is completing its investigation of Section 232, the administration is expanding its domestic critical mineral production, reduced regulations and promoted growth policies,” Desai said in a statement. The Commerce Department did not respond to requests for comment.

In its submission, TSMC highlighted plans for six advanced semiconductor fabs and two packaging facilities as part of its $165 billion investment in Arizona. However, the company warned that import taxes would make these projects difficult to deliver on schedule and slow efforts to expand domestic production of chips for 5G wireless, artificial intelligence and autonomous driving.

“Additional tariffs or other restrictive measures against semiconductors could reduce profitability for large US companies by limiting sourcing options, increasing production costs and reducing product demand,” wrote a subsidiary of TSMC’s Arizona.

In its submission, Tesla cited its relationship with Asia, Europe and Africa to encourage coordination between government and industry to minimize uncertainty that could disrupt supply chains. “These partnerships allow us to focus on increasing US domination in advanced manufacturing,” the company writes. “Affecting these inputs with inadequate availability in the country will put a strain on resources at key moments in the global artificial intelligence race.”

Chipmaker Intel warned that trading partners can take measures to exclude American products. Intel is trying to reverse long-standing struggles by spending more than $100 billion to expand domestic manufacturing, and the company has called for people not to spare American-made wafers and chips made overseas using American technology.

The general concern that TSMC, Intel and others are aired by others in the semiconductor industry centers around the risk that chip-making equipment produced by foreign suppliers who hold ASML will collide with import taxes. The world’s only provider of most advanced chip-making gear, ASML’s single extreme ultraviolet lithography machine, based in the Netherlands, could cost nearly $400 million. Adding tariffs will significantly increase the cost of equipping new US facilities.

ASML submitted feedback to the Commercial Department, but the application was marked “business confidential” and was not available for public review. In its comments, Intel urged such machines to be exempt from them, noting that “the main cost drivers for semiconductor fabs, which account for two-thirds of total construction costs, are equipment and machinery.”

Feeney said it would be extremely difficult to replace semiconductors produced overseas with domestic products.

“It takes years to create an industrial infrastructure to make it even more possible to create semiconductor manufacturing facilities,” she said. “When you’re trying to build an AI infrastructure for your data centers, the last thing you want to do is to place a considerable tariff on the most important inputs to these data centers.”

The US major trading partner, already stabbed by Trump’s so-called mutual tariffs, opposed the idea of ​​targeting chips after seeing steel and aluminum imports hit with iron. Taiwan, which produces almost 90% of the world’s most advanced semiconductors, is home to American chip designers Nvidia Corp. and Advanced Micro Devices Inc.

The tariffs on island semiconductors or related products “will seriously undermine Taiwan’s ability to meet the demands of the US semiconductor industry in a timely manner,” the Taiwanese government said in its application. “This will increase costs for US companies, raise the prices of their final products, reduce profitability and revenue, and ultimately weaken the ability of US companies to invest in R&D and innovation.”