The Trump administration is reportedly weighing a dual strategy for semiconductor imports: imposing broad tariffs while creating specific exemptions to protect prominent tech companies engaged in artificial intelligence. This approach aims to leverage Taiwan Semiconductor Manufacturing Company's (TSMC) investments in U.S. manufacturing to offer tariff relief, ensuring that American hyperscalers can continue their rapid expansion in AI infrastructure. The proposed policy seeks to balance economic protectionism with the needs of the burgeoning AI industry, although details are still being finalized.
Details of the Proposed Semiconductor Tariff Policy
In February 2026, the Trump administration began considering a new policy that would introduce extensive tariffs on imported semiconductors. Simultaneously, a framework for exemptions is being developed, specifically designed to benefit major U.S. technology corporations such as Amazon, Microsoft, and Alphabet's Google. These exemptions are reportedly contingent on the scale of investments made by Taiwan Semiconductor Manufacturing Company (TSMC) in manufacturing facilities within the United States. TSMC, a critical global chipmaker, has committed approximately $165 billion to expand its U.S. presence, a move aligned with Washington's broader objective to reduce its reliance on foreign chip production. Under a U.S.-Taiwan trade pact, Taiwanese entities establishing semiconductor fabrication plants in the U.S. would be granted tariff-free import access for chips, proportionate to their planned domestic capacity. These benefits could then be extended by TSMC to its American clientele. While these carve-outs offer a potential reprieve, officials indicate the plan remains fluid and will be carefully monitored to prevent it from becoming a mere 'giveaway' to TSMC, ensuring alignment with the administration's overarching tariff objectives. Neither TSMC, the Commerce Department, nor the White House has publicly commented on these reports. This initiative follows the Trump administration's January 2026 imposition of 25% tariffs on a select category of chips from companies like Advanced Micro Devices and Nvidia, particularly those re-exported to China. Currently, chips designated for domestic AI infrastructure have largely been excluded from these tariffs. Following these developments, Amazon's shares saw a slight increase of 0.077% in after-hours trading, Microsoft gained 0.49%, while Alphabet's Class A shares experienced a minor dip of 0.018% and Class C shares fell 0.083%.
This emerging policy highlights the intricate balance governments face in fostering domestic industry while supporting technological advancement. By linking tariff exemptions to onshore manufacturing investments, the Trump administration appears to be employing a strategic economic tool to both secure supply chains and bolster the rapidly growing artificial intelligence sector. This approach could set a precedent for future trade policies, emphasizing the importance of domestic production in critical technological areas. However, the success and impact of such a nuanced policy will heavily depend on its precise implementation and the willingness of all parties to collaborate effectively.