How does this development compare to recent tariff actions against other major semiconductor manufacturers? | TSM (Aug 06, 2025) | Candlesense
TSM

How does this development compare to recent tariff actions against other major semiconductor manufacturers?

Comparison of the proposed 100 % “tariff‑if‑not‑built‑in‑the‑U.S.” policy with recent tariff and trade‑restriction actions aimed at other major semiconductor manufacturers

Policy / Action Target Tariff / Restriction Level Rationale Key Differences vs. Trump’s 100 % tariff
Trump’s 100 % tariff on imported chips (announced 6 Aug 2025) All foreign‑made semiconductors and chips unless the producer has a manufacturing footprint in the United States (e.g., a fab or assembly line) 100 % ad‑valorem tariff – effectively doubles the cost of any chip that does not meet the “built‑in‑U.S.” condition. “America‑first” manufacturing push; penalise off‑shoring; protect domestic supply chains and national‑security‑sensitive technologies. • Breadth – applies to all* foreign‑origin chips, not a single company or country.
• Severity – a full‑percentage tariff (100 %) is unprecedented; most prior actions were partial duties, export‑license restrictions, or black‑list measures.
• Conditionality – the only exemption is tied to physical presence in the U.S., not to product type, end‑use, or specific market.
U.S. Export‑Control / Entity‑List actions on **SMIC (China) – 2023‑2024** China’s Semiconductor Manufacturing International Corp. (SMIC) Licensing‑required export ban on U.S.‑origin equipment and a 25 % additional duty on certain high‑performance chips destined for SMIC (via Section 301‑based “China‑targeted” tariffs). Limit China’s ability to close its advanced‑node gap; protect U.S. IP and national‑security concerns. • Company‑specific – only SMIC was targeted; other foreign fabs were untouched.
• Tariff level – 25 % (or lower) on a narrow set of high‑performance products, not a blanket 100 % duty.
• Mechanism – export‑license denial rather than import‑tariff.
EU anti‑subsidy investigation & provisional duties on **TSMC (Taiwan) – 2024** Taiwan Semiconductor Manufacturing Co. (TSMC) projects in Europe (e.g., 28 nm and 22 nm fabs) Provisional anti‑subsidy duty of 12 % on TSMC‑produced chips imported into the EU, pending full investigation. Prevent “distorted competition” from foreign subsidies; protect EU chip‑makers. • Geographically limited – only EU imports, not global trade.
• Duty rate – modest 12 % vs. Trump’s 100 % proposal.
• Targeted at a single firm (TSMC) rather than all foreign suppliers.
U.S. Section 301 “China‑targeted” tariffs on **Huawei‑related chips – 2022‑2023** Huawei’s handset and networking chips (mostly sourced from third‑party foundries) Up‑to‑25 % additional duty on high‑performance chips (e.g., 7 nm‑5 nm) destined for Huawei’s supply chain. Counter Huawei’s role in China’s 5G rollout; protect U.S. security. • Product‑specific – only high‑performance nodes, not all chips.
• Country‑focused – only Huawei‑related shipments, not a blanket “foreign‑origin” rule.
Japan’s “Strategic Materials” export‑control on **ASML (Netherlands) – 2023** ASML’s EUV lithography machines (critical for advanced nodes) No‑tariff but a licence‑restriction on re‑export of EUV tools to China, effectively limiting Chinese access to cutting‑edge fabs. Safeguard the “most advanced” lithography tech from strategic rivals. • Technology‑specific – only EUV equipment, not the chips themselves.
• No import duty – the restriction is on export, not on the cost of imported chips.

What makes Trump’s proposal distinct?

  1. Universal, not selective – Prior actions have been targeted (e.g., SMIC, TSMC, Huawei) or technology‑specific (EUV tools, high‑performance nodes). Trump’s 100 % tariff would apply to every foreign‑origin semiconductor that does not have a U.S. manufacturing presence, regardless of the country of origin, the node, or the end‑use.

  2. Scale of the tariff – A 100 % ad‑valorem duty is effectively a doubling of the landed cost of the chip. The most severe previous tariffs in the sector have hovered around 25 % (U.S. China‑targeted duties) or 12 % (EU anti‑subsidy provisional duties). No prior policy has imposed a duty that equals the full value of the product.

  3. Conditional exemption based on “building in the United States” – The only way a foreign company can avoid the tariff is by establishing a U.S. fab, assembly line, or packaging facility. This is a structural, supply‑chain‑shaping condition rather than a simple blacklist or a licensing requirement. It incentivizes foreign fabs to relocate or expand in the U.S., a step beyond the “restrict‑access” approach of earlier measures.

  4. Policy instrument – import tariff vs. export control – Most earlier actions (SMIC, Huawei, ASML) used export‑control or entity‑list mechanisms that block the sale of U.S.‑origin equipment or high‑performance chips to a target. Trump’s move is an import‑tariff that penalizes the arrival of the product into the U.S. market, shifting the burden from the exporter to the importer and ultimately to the downstream device maker.

Potential implications (relative to past actions)

Aspect Past actions Trump’s 100 % tariff
Supply‑chain impact Targeted bans caused localized disruptions (e.g., SMIC’s inability to source advanced lithography). A blanket 100 % duty could force all downstream OEMs (smart‑phone, automotive, data‑center makers) to either source from U.S.‑based fabs or absorb a doubling of cost – likely prompting a rapid acceleration of on‑shoring projects, but also risking capacity shortfalls in the short term.
Cost transmission 25 % duties were often absorbed partially by manufacturers or passed on as modest price hikes. A 100 % duty is hard to absorb; many OEMs will likely pass the full cost to end‑users, inflating device prices and potentially eroding U.S. competitiveness in high‑value markets.
Geopolitical signaling Actions were country‑or‑company specific (China, Taiwan, Huawei) and framed as national‑security or fair‑competition measures. The 100 % tariff is a broad “America‑first” stance that treats any non‑U.S.‑based production as “foreign” regardless of geopolitical alignment, signaling a fundamental shift from selective containment to a global manufacturing‑re‑allocation policy.
Legal / WTO considerations Targeted duties (e.g., Section 301) have been defended under existing trade‑remedy statutes; anti‑subsidy measures have been co‑ordinated with the EU. A 100 % ad‑valorem tariff on all foreign chips could be challenged at the WTO as a discriminatory measure unless the “U.S.‑built” exemption is deemed a legitimate, non‑discriminatory rule of origin. Past actions have been more defensible because they were narrowly tailored.
Industry response Companies like TSMC and Samsung have expanded U.S. capacity (e.g., TSMC’s Arizona fab) in response to earlier incentives, but still maintain major overseas production. The binary “built‑in‑U.S.” condition creates a strong incentive for any fab‑owner (TSMC, Samsung, Intel, GlobalFoundries, even Chinese fabs) to open a U.S. line or risk a 100 % cost penalty. This could accelerate multinational joint‑venture projects in the U.S., but also raise capital‑allocation risk for firms that lack the ability or timeline to build U.S. capacity.

Bottom line

  • Past tariff and trade‑restriction actions have been targeted, moderate in magnitude, and often technology‑ or country‑specific (e.g., 25 % duties on Chinese SMIC, 12 % anti‑subsidy duties on TSMC in the EU, export‑license bans on Huawei).
  • Trump’s newly announced 100 % tariff is unprecedented in scope and severity: it is a universal import duty that applies to any semiconductor not physically produced in the United States, with the sole exemption being a U.S. manufacturing presence.
  • Consequently, this policy represents a qualitatively different lever—moving from selective containment to a broad, cost‑based “home‑grown” mandate—and is likely to have far‑reaching effects on global chip supply chains, pricing, and the strategic calculus of all major semiconductor manufacturers, far beyond the more limited impacts of earlier tariff actions.

Other Questions About This News

Are there any legal or regulatory hurdles that could delay the implementation of the 100% tariff? What are the longer‑term implications for TSM's global supply chain resilience and market positioning? Will TSM accelerate its investment in U.S. manufacturing facilities in response to the tariff, and how will that affect future capital expenditures? Will the tariff policy cause a shift in supply chains that could benefit or disadvantage TSM's U.S.-based operations? How might the market price of TSM react to heightened trade tensions and potential tariff escalations? How will a 100% tariff on imported semiconductors affect TSM's cost structure and margins? How might this policy influence the competitive dynamics between TSM and domestic U.S. chip producers? What hedge strategies can be employed to mitigate potential downside risk from the tariff announcement? What is the expected impact on TSM's revenue from reduced demand for imported chips in the United States?