This week, alongside talks of imposing tariffs on all goods imported from Canada and Mexico, Trump announced plans to introduce duties of up to 100% on silicon chips coming into the United States.
There are claims that this could raise the prices of every product Apple manufactures since their chips are produced in Taiwan, but this is likely not the case…
Proposed Tariffs on Imported Chips
The Register reports that Trump has threatened to set tariffs as high as 100%.
“In the very near future, we are going to implement tariffs on foreign production of computer chips, semiconductors, and pharmaceuticals to bring back the production of these critical goods to the United States,” the president stated during the House Republican Issues Conference.
“The incentive will be that they won’t want to pay a 25, 50, or even 100 percent tax,” he continued.
A tariff of 100% would effectively double the cost of chips imported by U.S. companies for use in domestically made electronics, resulting in increased prices for consumers.
Unlikely Impact on Apple Devices
Some analysts propose that since all Apple devices utilize processors produced in Taiwan, alongside various other chips primarily made in China, these tariffs would adversely affect Apple.
However, chips manufactured by TSMC in Taiwan are typically sent to countries like China, India, and Vietnam for assembly into devices, which are then imported into the U.S.
Applying chip tariffs across all devices containing chips would likely impact a vast range of products, including everything from smartwatches to washing machines and vehicles.
This scenario differs significantly from the tariffs enacted during Trump’s previous presidency when various product taxes affected Apple significantly. In that case, Apple successfully petitioned for most of its devices to be exempt after outlining the negative economic implications for the U.S.
Trump has often mischaracterized tariffs as taxes imposed on foreign companies that export goods to the U.S. In reality, these tariffs are applied at the point of entry on imported goods, and it is American companies and consumers who ultimately bear the cost.
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