SINGAPORE: US President Donald Trump has threatened tariffs of up to 100 per cent on US imports of semiconductors. In one other unprecedented transfer, Nvidia and AMD are actually required to present the US authorities 15 per cent of their revenues from chip gross sales to China.
These two selections goal the high-tech sector, which is essential for the US economic system but additionally central to many international locations as a consequence of its influence on progress and its function in advanced provide chains. The place will we go from right here?
Let’s take a step again and acknowledge that no tariff resolution is ultimate underneath the present administration. Beginning with preliminary tariffs on Canada, Mexico and China, adopted by the shock of Liberation Day, a pause and a sluggish succession of bilateral commerce offers, we discover ourselves with probably the most advanced tariff construction the US has had in many years. There will not be solely completely different charges by nation or items, but additionally a rising checklist of exemptions for particular person corporations.
To make issues worse, a few of these tariffs can simply change primarily based on the seemingly risky will of the US president. The current improve in tariffs on Brazilian and Indian imports, explicitly motivated by political causes, is an instance of what may occur to different international locations sooner or later.
On this context, US tariffs on the high-tech sector ought to be taken with a grain of salt. As of at the moment, they’re merely bulletins which have but to be absolutely carried out.
Moreover, exemptions have already been introduced for corporations that produce within the US or “plan to take action”. Following a gathering between Apple CEO Tim Cook dinner and President Trump, Apple was granted an exemption from the tariff on imported semiconductors.
Different corporations in Asia, corresponding to TSMC in Taiwan and Samsung in South Korea, consider that they need to be exempted as properly due to their presence or commitments within the US. Given current historical past, it might not be shocking if Trump requested further efforts or commitments from a few of these corporations in change for exemption from these tariffs.
