AI industry says Trump plans to tax chips in the “single dumbest way imaginable”

The Trump administration is reportedly preparing to introduce extensive new tariffs on semiconductor imports, sparking widespread anxiety across the technology sector.

The proposed duties could target not only individual microchips but also finished electronics that rely on them, including data center servers, smartphones, and gaming consoles. Under a framework favored by Commerce Secretary Howard Lutnick, the government may tie tariff exemptions to foreign tech companies investing heavily in domestic manufacturing facilities. Proponents of the policy argue this approach is necessary to force the reshoring of vital technology supply chains back to American soil.\n\nHowever, industry representatives and trade groups warn that these sweeping taxes will severely hinder American technological progress, particularly in the rapidly growing artificial intelligence sector. They point out that domestic chip factories require years to build, meaning companies must continue importing hardware in the interim or face crippling infrastructure delays. Lobbyists argue that double-taxing these components will drive up consumer device prices, lead to billions of dollars in economic losses, and force data center developments to relocate overseas. Despite frequent meetings to lobby for carve-outs, industry insiders fear that the administration is unlikely to grant the requested exemptions.