(Reuters) – U.S. President Donald Trump plans to impose tariffs on imported laptop chips, prescription drugs and metal, he mentioned on Monday, to push firms to fabricate extra in america.
The feedback mark the most recent in plenty of trade-related threats unleashed by Trump in latest days. He has already promised to slap 25% tariffs on imports from Canada and Mexico by Feb. 1 if the 2 nations do not meet calls for on border safety and different points.
By specializing in chips and prescription drugs, Trump may squeeze U.S. allies in Asia, together with Taiwan, South Korea and Japan.
WHAT’S BEING TARGETED FOR CHIPS?
Trump mentioned he plans to impose tariffs on imported laptop chips with out offering particulars.
Asia is the world’s largest chip manufacturing hub, producing greater than 80% of semiconductors bought globally, in keeping with the Asian Growth Financial institution.
Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest contract chipmaker, makes semiconductors for Nvidia, Apple and different U.S. purchasers. TSMC generated 70% of its income in 2024 from clients based mostly in North America.
Whereas it’s constructing a $65 billion manufacturing facility in Arizona, the majority of TSMC’s manufacturing stays in Taiwan, with exports to the U.S. theoretically topic to tariffs.
WHAT ABOUT OTHER CHIPS?
Asian producers additionally dominate the marketplace for reminiscence chips, with DRAM and NAND flash chips utilized in digital gadgets together with computer systems.
South Korea’s Samsung Electronics and SK Hynix collectively management round three quarters of the worldwide DRAM market.
The 2 firms, plus Japan’s Kioxia, which is managed by U.S. buyout agency Bain Capital, command an analogous market share in NAND flash.
Samsung is investing roughly $44 billion in chipmaking services in Texas with subsidies from the U.S. authorities.
WHAT ABOUT THE ECONOMIC HIT?
Chips are a serious supply of export income for South Korea and Taiwan, that means there’s much more at stake than simply the impression on producers themselves.
South Korea’s exports of semiconductors hit a file $141.9 billion in 2024, of which $10.28 billion was to the U.S., in keeping with information launched by the Ministry of Commerce, Business and Vitality earlier this month.
WHAT ABOUT OTHER CHIP SUPPLY CHAIN COMPANIES?
Japan is a serious provider of chipmaking gear and supplies, all of which, at the least for now, seem to have prevented direct point out by Trump. Main gear firms embody Tokyo Electron and Advantest.
WHAT ABOUT PHARMA?
Imposing tariffs on imported prescription drugs may weigh on Japan, residence of main drugmakers equivalent to Takeda, Astellas, Daiichi Sankyo and Eisai, which has been anticipating sturdy gross sales progress within the U.S. of its Alzheimer’s illness drug Leqembi.
