Source: Channel News Asia
Date: 7th August 2025

Tariffs aim to boost domestic chip production while exempting firms with U.S. operations, raising global trade concerns.

The United States has announced plans to impose a 100% tariff on semiconductor imports from companies that do not manufacture or plan to manufacture chips within the U.S.

The tariff, which would not apply to firms with active or committed U.S.-based operations, is intended to strengthen domestic production and reduce dependency on foreign supply chains. Companies failing to meet their manufacturing pledges may face retroactive duties. While not yet a formal policy announcement, the remarks reflect growing trade protectionism in the high-tech sector.

The move is likely to significantly impact semiconductor exporters across Asia. Countries like the Philippines, Singapore, and Malaysia, where chip exports play a critical role in national economies, have raised concerns about the potential fallout.

Singapore, for instance, has warned that such tariffs could further strain its economy and negatively impact jobs and growth. Malaysia has also sought clarification from the U.S. government, stressing the importance of negotiating exemption terms early to preserve its competitiveness in the global market.

Meanwhile, companies with existing or planned U.S. facilities, including major chipmakers from South Korea, Taiwan, and Japan, are expected to be exempt. These nations have secured more favorable trade terms with the U.S., either through direct investment or negotiated agreements, often receiving a baseline tariff rate of 15%.

The policy underscores the advantage held by large, well-funded firms capable of building in the U.S., while intensifying pressure on smaller exporters and countries without manufacturing footprints in America.